Wells Fargo & Co. abruptly canceled Tuesday a pricey Las Vegas casino junket for employees after a torrent of criticism that it was misusing $25 billion in taxpayer bailout money.
The company initially defended the trip after The Associated Press reported it had booked 12 nights beginning Friday at the Wynn Las Vegas and the Encore Las Vegas. But within hours, investigators and lawmakers on Capitol Hill had scorned the bank, and the company canceled.
The conference is a Wells Fargo tradition. Previous all-expense-paid trips have included helicopter rides, wine tasting, 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.
"In light of the current environment, we have now decided to cancel this event as well," the company said Tuesday night in a news release that also said the it had never planned to use taxpayer bailout money for the trip.
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.
Because of the bailout and the recession, other banks have canceled employee outings, including Morgan Stanley, which informed employees Monday that an appreciation trip to Monte Carlo was off.
Wells Fargo, however, had not. And initially, the company indicated it had no plans to cancel.
"Recognition events are still part of our culture," spokeswoman Melissa Murray said Tuesday afternoon. "It's really important that our team members are still valued and recognized."
In previous years, top Wells Fargo loan officers were treated to performances by Cher, Jay Leno and Huey Lewis. One year, the company provided fortune tellers and offered camel rides, said Debra Rickard, a former Wells Fargo mortgage employee from Colorado who attended the events regularly until she left the company in 2004.
Every night when employees returned to their rooms, there was a new gift on their pillows, she said.
"I was amazed with just how lavish it was," Rickard said. "We stayed in top hotels, the entertainment was just unbelievable, and there were awards — you got plaques or trophies."
Kevin Waetke, another spokesman for Wells Fargo, said the Las Vegas trip provided a "unique opportunity" for Wells Fargo employees and employees of newly acquired bank Wachovia Corp., "to focus on continuing to do all we can for U.S. homeowners."
On Capitol Hill, lawmakers disagreed.
"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."
The trip was to come on the heels of this week's announcement that Wells Fargo lost more than $2.3 billion in the last three months of 2008.
"Now, they're sending employees on junkets to Las Vegas. You do the math," said New York Attorney General Andrew Cuomo, who recently sought information about Wells Fargo's bonuses as part of his investigation into the banking industry.
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.
Wells Fargo reversed course Tuesday evening. The company said it had planned to scale back the Las Vegas trip but decided to cancel it, just as it had already done for other events scheduled for this year.
The statement did not say what, other than a four-night sales conference, the company had planned for its 12 nights in Las Vegas. The company said, however, it did not plan any other employee recognition events this year.
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.