Wells Fargo cancels on Vegas

If the financial services industry adhered to public sentiment, bankers and brokers would be wearing potato sacks, riding the bus and earning minimum wage right now. They certainly carry a great deal of blame in making a mess of the economy, and they further enraged taxpayers late last year by slurping down billions of dollars in federal bailout money.

That these so-called "rescue" appropriations were loans -- not the giveaways being floated in President Obama's economic stimulus monstrosity -- is irrelevant in the court of public opinion. Any sign of irresponsible spending by any entity that has received taxpayer assistance is subject to immediate condemnation. Congress called insurance giant AIG on the carpet for blowing $440,000 on executive spa treatments just days after getting an $85 billion loan.

Now Wells Fargo & Co. is being shamed for planning a 12-day recognition conference at Wynn Las Vegas and Encore Las Vegas starting this weekend.

Once the meetings were labeled "a corporate junket" by The Associated Press late Tuesday, news quickly spread to Capitol Hill that the bank would lavish its best mortgage officers with the trappings of luxury.

"Let's get this straight: These guys are going to Vegas to roll the dice on the taxpayer dime?" asked Rep. Shelley Moore Capito, R-W.Va., who sits on the House Financial Services Committee. "They're tone deaf. It's outrageous."

Yes, there is certainly a perception problem here. But are major financial institutions supposed to stop offering incentives and rewards to top performers? Are they supposed to hand out toasters to the associates charged with generating enough business to repay the U.S. Treasury?

Some travel costs, employee gatherings and retreats are indeed legitimate expenses intended to improve and sustain business and corporate health.

It's worth noting that an extended stay in Las Vegas is nowhere near as costly as it was even a year ago. Many of the Strip's most opulent resorts are offering bargain prices for rooms, plus credits for meals, entertainment and, yes, gambling. Right now, Las Vegas and its first-class amenities are a bargain.

There was painful irony late Tuesday when, about the time Wells Fargo succumbed to pressure and called off its conference, Wynn Resorts Inc. announced it would cut salaries, benefits, bonuses and schedules for its workers in response to softening demand. It will be one more blow to the economy, one more rotation in the cycle of fear and anger that has crippled so many businesses -- and put so many Americans out of work.

Financial institutions that accepted debt-financed, taxpayer-guaranteed loans should be subject to scrutiny. The public has every right to demand that their resources be used in ways that help the economy. And the banks that profited from the easy-credit era need to curb excesses and abuses, not to kowtow to petty populism, but to instill confidence in their shareholders.

President Obama's Wednesday order to cap executive compensation at bailed-out firms was one more sign that corporations can expect to be held to different standards, now and in the years ahead. They are being watched. And if top-level administrators so much as share a single gourmet meal out on the company dime, they should expect the tab to be leaked, and they should expect nationwide yowls of protest.

But those who are quick to criticize should know that such grandstanding has real-world ramifications -- New York state has a $1 billion budget hole because pressure on Wall Street resulted in fewer employee bonuses, causing a plunge in income tax revenue -- that don't always mesh with the goal of economic recovery.