Not to change the subject, but this is too funny to pass up.
Everybody has their hand out......
Congress ‘Killing’ Resort Hotel Business, Tisch Says (Update1)
By Erik Holm
Feb. 9 (Bloomberg) -- Lawmakers are “killing” hotels that rely on corporate events by forcing companies that get federal money to scale back on employee trips, said James Tisch, the chief executive officer of Loews Corp.
“Congress has done a great job of killing the resort hotel business with the way they’ve criticized a number of financial firms for having conferences,” Tisch told analysts today. “I just heard this morning of another investor conference that was canceled by another major investment firm because of fear of being criticized by members of Congress.”
Lawmakers and regulators have disparaged financial companies for perks and bonuses offered to employees since the U.S. government’s $700 billion rescue plan was announced in October. Firms that received bailout federal money, including Wells Fargo & Co. and American International Group Inc., have canceled employee events at hotels amid the criticism.
“We suspect there will be a number of attractive hotel properties that are not able to make it through this economic storm,” Tisch said. “We will be looking to see what kind of attractive property acquisitions we can make in this environment.”
Average fourth-quarter room rates at Loews hotels declined 20 percent to about $215 as occupancy rates fell to 66 percent from 70 percent a year earlier, Loews Chief Financial Officer Peter Keegan said on a conference call today.
Wells Fargo
Wells Fargo last week canceled plans for an event for its home-lending unit that had been scheduled to take place at Wynn Resort Ltd.’s hotels. The bank received $25 billion from the U.S. government in October as part of the Troubled Asset Relief Program designed to spur lending and save the financial system.
“The question here is whether Wells Fargo is spending taxpayer money to bankroll Las Vegas junkets,” New York Attorney General Andrew Cuomo said in an e-mailed statement last week. “That is an answer the American people deserve to know because this is their money.”
Wells Fargo CEO John Stumpf defended corporate events that recognize top achievers and decried what he said was “misleading” news coverage.
In a full-page ad in yesterday’s New York Times, Stumpf said the events serve to honor top bankers, financial advisers, tellers and mortgage salespeople at the second-biggest U.S. home lender.
‘One-Sided Stories’
“The problem is many media stories on this subject have been deliberately misleading,” Stumpf wrote. “These one-sided stories lead you to believe every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly-paid executives. Nonsense!”
AIG, the insurer that received a $150 billion U.S. rescue, canceled about 160 events costing a total of $80 million after former CEOs Martin Sullivan and Robert Willumstad were lambasted at Congressional hearings last year. The firm has also faced criticism over payments designed to retain employees as the company tries to sell units and repay the government.
Loews, which operates a chain of 18 hotels in North America, also owns a natural gas exploration firm and the majority of commercial insurer CNA Financial Corp. Loews today reported its second consecutive quarterly loss as the price of its natural gas reserves fell and investment losses widened at CNA.
The fourth-quarter loss from continuing operations was $958 million, or $2.20 a share, compared with profit of $295 million, or 56 cents, in the same period a year earlier, the New York- based company said today in a statement.
Laurence Tisch, father of the current Loews CEO, and Preston Robert Tisch, his uncle, started Loews when they bought a New Jersey hotel in 1946.
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