Companies unveil expense policies under TARP rules
WASHINGTON - Companies that received billions of dollars of government aid have published policies meant to limit lavish expenses, rules that follow reports of costly private jets, spa retreats, and other corporate excess at firms receiving taxpayer money.
The Treasury Department required financial institutions and automakers that received money from the $700 billion Troubled Asset Relief Program to post their new policies covering “excessive or luxury expenditures’’ on their websites. The policies posted yesterday ranged from blanket statements of proper spending practices by company employees, to how much to tip a hotel doorman while traveling.
The policies, which generally require greater scrutiny by top executives and corporate boards of major expenses, are part of a broad swath of government standards at bailed-out companies. That includes an ongoing Treasury review of the pay packages for executives of major TARP recipients.
Lawmakers and the public have denounced some spending and perks at companies that were given government lifelines, including a posh California retreat for executives of AIG last fall and the decision last year by top automakers’ officials to fly corporate jets to Washington to ask for billions in bailouts.
Treasury spokeswoman Meg Reilly would not comment on the policies. GM, which has received $50 billion in aid and is one of the biggest beneficiaries of the program, has until October to report because it emerged from bankruptcy in July.
The amount of disclosure revealed yesterday varied broadly. They covered such issues as entertaining clients, use of corporate jets, and renovations of office space.
Chrysler Financial Services, which has repaid $1.5 billion in federal loans, provided a 15-page policy that prohibits employees traveling on business from being reimbursed for lunch on trips that don’t require an overnight stay and directs employees to fly coach if their flight is less than four hours. Employees also can’t expense country club fees, massages and spa services, hotel frequent-guest programs, and tuxedos or evening gowns. Tips are limited to 20 percent, and employees must choose mid-size rental cars.
Under the policy, Chrysler Financial will not reimburse employees for personal items lost while traveling on business.
GMAC Financial Services, meanwhile, offered a more broad set of rules for workers, prohibiting expenditures that “are, or reasonably could be construed as, excessive or as a luxury.’’ It applies to expenditures for entertainment or events, office renovations, or travel.
Bank of America wrote that senior management would have to approve renovations that were considered out-of-the-ordinary, including the purchase of antiques and customized finishes. That policy follows reports that Merrill Lynch, which is now part of Bank of America, spent $1.2 million last year renovating the office of its chief executive then, John Thain, work that included pricey rugs and antiques.