Wells Fargo & Co. is likely on the hook for hefty cancellation fees after abruptly scrapping its upcoming retreats to Las Vegas casinos.
The company, which received $25 billion in taxpayer bailout money and recently announced a $2.3 billion loss for the last quarter of 2008, had booked 12 nights at two of the most expensive hotels in Las Vegas for events that included a luxurious four-day employee sales conference.
But after lawmakers and investigators admonished the company, Wells Fargo scrapped the trip Tuesday night.
“Typically there would be some sort of cancellation clause in the contract,” said Jeremy Handel, a spokesman for the Las Vegas Convention and Visitors Authority.
That often means losing a big deposit or paying a cancellation penalty, he said.
Wells Fargo suggested that canceling the event would cost about as much as holding it.
“Late last year, we canceled recognition events for 2009 except those where the financial commitment was so great that no meaningful savings would occur by canceling these events,” the company said in a statement.
A spokeswoman for Wynn Las Vegas, which along with its sister hotel, Encore Las Vegas, was scheduled to host the retreat, would not comment on the arrangement it had with Wells Fargo.
Previous all-expense-paid trips for Wells Fargo have included helicopter rides, wine tastings, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 of the company’s top employees and guests. Cher, Jay Leno and Huey Lewis also have performed.
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.
Even lawmakers who helped craft the bailout have been frustrated that some bank executives were taking big bonuses and scheduling junkets. Sen. Charles Schumer, D-N.Y., said banks “have to understand they live in a new world and the old ways of doing business aren’t acceptable.”
House Financial Services Committee Chairman Barney Frank, D-Mass., said banks were acting “stupid” and making it harder for lawmakers to defend them.
“People really hate you,” he said, imploring banks to do everything possible to avoid offending people. “And they’re starting to hate us just for hanging out with you.”
