Magazine

When Northern Trust sponsored a PGA golf tournament in February, members of Congress and the media went a little crazy. The bank — which had received some $1.6 billion of the $700 billion the government has pledged to the Troubled Assets Relief Program (TARP) — paid to fly employees and clients to Los Angeles, and then feted them with lavish dinners and entertainment by the likes of Chicago and Sheryl Crow. Another year — say, 2007, when the firm took over sponsorship of the tournament — the splash and pizzazz might not have seemed so obscene. But as a bank stakeholder, theoretically, one gets to call at least some of the shots, which is why the government – and, by extension, the public – has taken on such issues as bonuses, dividends, executive compensation and now, corporate sponsorship.

Northern Trust is hardly the only TARP bank that sponsors high- and lowprofile, for- and nonprofit events. Indeed, the bulk of the financial firms receiving aid from the government (532 and counting, according to ProPublica) sponsor events, stadiums, arts organizations and community initiatives. (Full disclosure: Next American City receives such funding.) But what had seemed like a win-win deal for banks and local institutions has now come under public scrutiny— potentially leaving cities in the lurch. At least one institution, Johnson Bank, which has branches in Arizona and Wisconsin, turned down TARP money precisely because it does not want to answer to the government regarding its sponsorships and community outreach.