Don't expect to see any Morgan Stanley executives or clients at the PGA Tour event they sponsor in June. If they show up at The Memorial Tournament presented by Morgan Stanley, they'll be paying their own way.
CNBC has confirmed a Reuters report that the bank will continue to sponsor the event at the Muirfield Village Golf Club in early June, but a Morgan Stanley spokesperson said "we're not participating this year due to the environment."
Participating means sending any employees or clients to the golf tournament on the bank's budget. There also won't be any employee or client activities planned.
The bank was obviously pressured by the reaction on Capitol Hill over the spending by Northern Trust for a PGA Tournament the company sponsored last week. House Financial Services Committee chairman Barney Frank has asked that Northern Trust pay the government back for the bill equivalent to the lavish parties they had associated with the event.
Morgan Stanley signed a four-year deal to sponsor the tournament in 2003. That sponsorship was eventually renewed to go through the 2010 tournament.
Northern Trust took $1.6 billion in TARP funds, while Morgan Stanley received $10 billion in TARP funds.
All eyes are now on every other sponsor of every major event to see how they react. Wachovia, which is owned by Wells Fargo ($25B in TARP funding) has an event in two months. And in late July, we expect this witch hunt to continue with the Buick Open, one of two tournaments the GM brand sponsors.
Personally, I think this has gone too far. You have to be able to activate your sponsorship. You can't just throw your name on a tournament or venue and expect it to work for you.
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