Bailed-out Wells Fargo books Vegas casino junket
Posted February 3, 2009 2:58 p.m. EST
Updated February 3, 2009 6:11 p.m. EST
WASHINGTON — Wells Fargo & Co., which received $25 billion in taxpayer bailout money, is planning a series of corporate junkets to Las Vegas casinos this month.
Wells Fargo, once among the nation's top writers of subprime mortgages, has booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas beginning Friday, said Wynn spokeswoman Michelle Loosbrock. The hotels will host the annual conference for company's top mortgage officers.
The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 employees and guests.
"I was amazed with just how lavish it was," said Debra Rickard, a former Wells Fargo mortgage employee from Colorado who attended the events regularly until she left the company in 2004. "We stayed in top hotels, the entertainment was just unbelievable, and there were awards – you got plaques or trophies."
Wells Fargo completed its purchase of Wachovia at the end of December in a $12.7 billion deal. The company issued this statement Tuesday about its travel plans:
"Key to our company's success is our ability to balance the needs of our nation, customers, shareholders and team members. We have a long-standing, deeply-rooted tradition of recognizing top performers who make homeownership achievable and sustainable for customers across the country. In 2008 alone, we produced $230 billion in mortgage loans.
This year, we have the unique opportunity to bring together our Wells Fargo and new Wachovia mortgage consultants to focus on continuing to do all we can for U.S. homeowners."
The combination of Wells Fargo and Wachovia creates one of the nation's largest banks with more than $1.42 trillion in assets and nearly $800 million in deposits. The deal helps expand Wells Fargo's footprint, especially along the East Coast.
While the nation's recession has led other banks to cancel employee recognition outings, Wells Fargo has not.
"Recognition events are still part of our culture," spokeswoman Melissa Murray said. "It's really important that our team members are still valued and recognized."
Corporate retreats have attracted criticism since the bank bailout last fall. Congress scolded insurance giant American International Group Inc. for spending $440,000 on spa treatments for executives just days after the company took $85 billion from taxpayers. AIG has since canceled all such outings.
The weekend of Feb. 25, Wells Fargo's insurance division is hosting a 40-person team for a two-day meeting at the Mandalay Bay Hotel in Las Vegas, according to the Las Vegas Convention and Visitors Authority.
Murray did not immediately have details about the size or cost of the events or what was planned.
Capitol Hill reacted quickly to the news.
"Let's get this straight: These guys are going to Vegas to roll the dice on the taxpayer dime?" said Rep. Shelley Moore Capito, a West Virginia Republican who sits on the House Financial Services Committee. "They're tone deaf. It's outrageous.
In previous years, top loan officers were treated to performances by Cher, Jay Leno and Huey Lewis. One year, the company provided fortune tellers and offered camel rides, Rickard said. Every night when employees returned to their rooms, there was a new gift on their pillows, she said.
Wells Fargo Chairman Richard Kovacevich has traditionally greeted every employee personally when they arrived.
Rooms at the Wynn and the Encore are consistently among the most expensive in Las Vegas. The $2.3 billion Encore opened in December. Its decor includes a 27-foot Asian dragon made from 90,000 Swarovski crystals and artwork by Colombian artist Fernando Botero. One of the restaurants features Frank Sinatra's 1953 Oscar.
Both properties have high-end retail stores, including Manolo Blahnik at Wynn and Chanel at Encore.
Morgan Stanley, another $25 billion bailout recipient, had been planning to send its top employees to a hotel in Monte Carlo this April. A Morgan Stanley travel agent said that the trip, along with a similar event in the Bahamas, was still on as of Tuesday afternoon. But company spokesman Jim Wiggins said employees were told Monday that the events were canceled. He said the travel agent was incorrect.
Bank of America, which recently purchased mortgage giant Countrywide and Wall Street financial house Merrill Lynch, said it has canceled all employee incentive trips.
"Given the current economic and business environment – and to further align our interests with those of our shareholders – we are making some difficult decisions to reduce or eliminate programs that do not directly impact our ability to serve our clients, customers and communities," Bank of America spokeswoman Kelly Sapp said in an e-mail.