Associated Bank Witch Hunt

Thanks to Daniel Bice, others in the media, and disgruntled parties, Associated Bank employees' trip to Puerto Rico is off.

This trip was a reward for workers at all levels, not just the bigwigs at the top. I imagine the disappointment was greater for those employees lower on the ladder.

Sorry, but spending tens of thousands of dollars on such rewards for hard work doesn't go over too well when a bank is participating in a program with government funds.

No rewards for the top-performing employees. Tough luck.

New rules are being formed in the crucible of this New Depression.

The private sector isn't really private anymore.

An angry mob, including elected officials, demanded that the trip to Puerto Rico be cancelled.

Bice writes about the successful witch hunt in the Milwaukee Journal Sentinel:

Battered by heated reaction from shareholders, politicians and the general public, CEO Paul Beideman on Thursday abruptly nixed a planned five-day excursion next week to a posh Caribbean resort for 100 top-performing staffers.

The trip was to come just three months after Associated's parent company accepted $525 million in bailout funds from the federal government.

"Based on feedback that we have received today, I have made the decision to cancel the recognition trip," Beideman said, backpedaling from his earlier defense of the trip.

"In the challenging times in which we are operating, we recognize the need to be especially attuned to the heightened sensitivities around our decisions. I would like to again recognize our colleagues who have earned the distinction of being the best of the best and thank all of our 5,200 colleagues for their outstanding work on behalf of Associated Banc-Corp."

...In November, Associated's parent company received $525 million from the U.S. Treasury as part of the $700 billion that the federal government set aside for the nation's banking industry. Like all other banks participating in the Troubled Asset Relief Program, Associated has agreed to pay the Treasury a 5% dividend for the first five years and 9% after that.

Talking to No Quarter earlier this week, Beideman said the federal funds would not be used for the trip or executive compensation but were going instead for "lending initiatives." He also said he believed canceling the Puerto Rico party would upset his employees.

Bice and others don't really get it.

They don't get why the bank received the federal funds. As I understand it, the funds weren't bailing out Associated. The bank wasn't going under. It's turning a profit. The funds are part of a program meant to keep the money flowing for loans.

What he didn't expect, clearly, was the reaction he got from everyone outside Associated.

"This is another gang of people who just don't get it," said U.S. Rep. Tammy Baldwin, a Madison Democrat. "If they want to take this trip, they should return the TARP funds and go on their own dime."

She wasn't the only politician to sound off.

By the time the day was done, several members of Wisconsin's congressional delegation and U.S. Sen. Herb Kohl had lashed out at the state's second largest bank.

"I am very disappointed," Kohl told the Journal Sentinel. "I don't think we can suggest they ought to return the funds or anything like that. There have been other violations, as you know, of companies that received funds or applied for funds, or did things not considered to be very smart or very proper. And I would put this in that category."

Both Baldwin and Kohl are bent out of shape about this trip yet they're about to vote for a reckless, bloated, anti-economic stimulus $3.27 trillion bill.

Go figure.

As a businessman, Kohl should know better. Surely, he understands incentives for top performance. His "disappointment" is a crock. He's just playing the game that the Dems and Obama want him to play. What a hack!

Kohl so rarely comments on anything. I've called his office to ask where he stands on given issues and I'll get very vague responses, no real answers at all. But in this case, Kohl speaks. That's sleazy.

Bice continues to detail the anger:

But those reactions paled by comparison with the response from Associated employees, shareholders and customers.

And the general public.

Joanne Jalowiec, a 60-year-old Milwaukee resident, said she called Wisconsin's senators and executives at Associated. Still frustrated, she eventually rang up the local bank branch. She began to express her concerns, she said, when the employee asked if she was a customer.

"When I said no, they hung up on me," Jalowiec said. "That's what they have to say for themselves."

Even some Associated employees were upset with their chairman.

"I was most offended by his comment that employees overwhelmingly support this," said one Associated staffer. "That's not accurate."

Beideman brushed aside questions about the trip, saying it had the backing of the 5,200-employee company. At one point, he even said, "Should we ask you or anybody else each individual thing we do to see if it's politically correct?"

Well, of course not. But the Associated staffer said even some of the high-performing workers scheduled to go on the getaway were uncomfortable with the timing of the junket.

"Actually, he's pretty good about seeking input from his employees," said the staffer, who asked not to be named for fear for his job. "But not this time."

Yes, hysteria prevailed.

This trip, scheduled prior to Associated's participation in the government program, really got the mob riled up.

This is a killer: A staffer "asked not to be named for fear for his job." Ooh, that Beideman is scarier than Ebenezer Scrooge.

Was this staffer the original tipster?

Bice proceeds to give a rather snide telling of the other side of the story.

That's not to say Beideman and his bank were the subject of universal scorn.

A small but strong minority were quite upset with the newspaper for drawing attention to the trip.

Several pointed out, as did the CEO, that Associated is turning a profit and hopes to repay the federal funds. In the fourth quarter of 2008, the bank reported net income of $13.6 million, down from $64.8 million for the same quarter the previous year. The company stock stood at $15.38 a share Thursday, compared with nearly $32 last year.

A few defended the excursion as a legitimate way to encourage employee performance.

Only they put it in slightly stronger language.

"This trip is an incentive for the employees to excel in what they do and was planned long before this useless bailout," said one anonymous e-mail to No Quarter. "You should be very 'proud' that you have taken that incentive away. May you eternally rot in hell!" But the overwhelming reaction was critical of the lender.

Wishes for me to eternally rot in hell are on the kind end of the spectrum of comments that I receive on this blog.

(I use the comment moderation function for a reason.)

I'm not surprised that the outraged people outnumbered the supportive.

That's the way it usually goes.

A number didn't buy Beideman's suggestion that his bank hadn't commingled bailout bucks with other income. A handful challenged the bank boss' suggestion that the federal funds were put into various lending programs.

For instance, Elaine Hokenson, a 76-year-old Greenfield resident, said she has had money with Associated for nearly 40 years. Despite what she said is a stellar credit record, she recently was turned down for a small loan.

"They absolutely refused," Hokenson said. "They blamed it all on the economy. They said they couldn't give any loans because of the bad economy. I'm just so disgusted."

Did Bice get Associated's explanation for turning down Hokenson for a loan?

I doubt it.

Outside of issuing the bureaucratic statement on the trip, Associated executives weren't talking.

Spokeswoman Janet Ford said she couldn't say whether the company would be losing money by canceling the trip at this late date. She also wouldn't respond to questions regarding talk that high-performing staffers received trip vouchers in lieu of the Puerto Rico fiesta.

"Our focus today was on our colleagues and our customers," Ford said late Thursday. She said she had been besieged by local and national media.

Bottom line: I don't think Beideman handled this matter well. I think he could have laid out his case much better than he did, providing Associated's employees and the public with solid and detailed explanations about the trip as well as Associated's participation in the government program.

So the trip is off. Given the climate we're in now, that outcome was inevitable.

There definitely are new rules. This is a new America.

The private sector as we know it is evolving into a mutant public/private beast.

This is change.