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UPDATE 1-Wells Fargo cancels Las Vegas events
February 4, 2009 / 1:57 AM / 9 years ago

UPDATE 1-Wells Fargo cancels Las Vegas events

(Updates with company statement on cancellation)

By Jonathan Stempel

NEW YORK, Feb 3 (Reuters) - Wells Fargo & Co (WFC.N), which received $25 billion from the government’s bank bailout program four months ago, said it had canceled employee events in Las Vegas after a report saying it had booked expensive hotels.

The move came after the Associated Press said the bank had booked 12 nights at the Wynn Las Vegas (WYNN.O) and the Encore Las Vegas, two of that city’s more upscale hotels, as part of a conference for top mortgage officials.

Wells Fargo had also been planning a 3-day meeting starting on Feb. 25 for 40 insurance employees at another high-end hotel, the Mandalay Bay Resort & Casino, according to the Las Vegas Convention and Visitors Authority’s website.

The bank issued a statement saying it had canceled events, although it was not immediately clear when these were planned for. Wells Fargo was immediately available for comment.

“We had scaled back the mortgage event, but in light of the current environment, we have now decided to cancel this event as well. We do not plan to have any other recognition events this year,” it said in a statement.

The bank, however, defended such events as part of its culture, and said the Associated Press report was misleading.

“The event is not a ‘junket’ for executives but a four-day business meeting and recognition event for hard-working team members who made homeownership achievable and sustainable for borrowers across the nation,” it said.

San Francisco-based Wells Fargo has long rewarded thousands of employees a year with fetes in such places as Disney World in Florida and in Hawaii.

Chairman Dick Kovacevich has greeted workers individually at many of these events, and has been known to entertain them in costume, often dressed as celebrities such as U2’s Bono or the Rolling Stones’ Mick Jagger.

Despite losing $2.55 billion in the fourth quarter, its first quarterly loss since 2001, Wells Fargo has fared better than many large rivals in navigating the global credit crisis and a souring U.S. economy.

But there has been a drumbeat of criticism from politicians and shareholders who say lenders that receive taxpayer money from the Troubled Asset Relief Program should not squander cash.

The insurer American International Group Inc (AIG.N), which got $40 billion of TARP money, scrapped some events after lawmakers railed against its spending $440,000 for a retreat at a California spa and resort.

Meanwhile, Citigroup Inc (C.N), which took $45 billion of TARP money, last week decided not to take delivery of a new corporate jet, and faces growing pressure to end a $400 million sponsorship of a new park for the New York Mets baseball team.

Wells Fargo roughly doubled in size a month ago when it bought troubled lender Wachovia Corp for about $12.7 billion.

Shares of Wells Fargo closed Tuesday down 70 cents, or 3.6 percent, at $18.53 on the New York Stock Exchange. They have fallen 37 percent this year. (Reporting by Jonathan Stempel; Additional reporting by Ritsuko Ando; Editing by Leslie Gevirtz, Gary Hill)

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