By Phil Wahba
NEW YORK (Reuters) - It used to be a prized invitation for Wall Street CEOs and top government officials. But for the U.S. banking elite, a ticket to this year's World Economic Forum in Davos risks becoming as toxic as the mess left over from the subprime mortgage crisis.
Up until a few weeks ago, the guest list for the January 28-February 1 annual gathering of the world's leading business and political figures in the Swiss ski village was going to include top executives from the biggest U.S. banks and the leading economics and finance names of the new administration of U.S. President Barack Obama.
But now that list is shrinking fast.
Citigroup
John Thain, former Merrill Lynch CEO and until he was ousted last week a top executive at Bank of America
His planned visit had irritated officials at Bank of America, according to the Charlotte Observer.
Obama, mindful of public sensibilities, in a meeting with congressional leaders on Friday, criticized companies that have received bailout money "renovating bathrooms or offices" or handling taxpayer money inappropriately, an apparent reference to reports Thain had spent $1.2 million on fixing up his office last year.
Valerie Jarrett, a senior adviser to Obama, will represent the White House at the gathering.
Certainly, the deepening economic and financial crisis demands their undivided attention at home. But a top New York public relations expert said there is another reason to avoid the glitzy soirees of Davos or its storied ski slopes.
"Banking officials have to be concerned with appearances more than ever," said Howard Rubenstein, president of Rubenstein Associates Inc. "They should avoid anything that appears super fancy or super rich, or thumbing their noses at taxpayers during a time of austerity."
Actress Angelina Jolie, supermodel Claudia Schiffer and U2 lead singer Bono are among those who have starred at past Davos events.
Such glamour will scarcely help the image of bankers bailed out with billions of dollars of taxpayers' money when homes are being foreclosed in record numbers, shareholders are losing their life savings and the recession is resulting in mass layoffs at many companies.
Auto executives learned that lesson. They felt the lash of public ire when they flew in private jets to Washington in November to plead for bailout money.
Several banks, including Citi and Goldman Sachs
DOWNSIZING DAVOS
A Bank of America spokesman said that the bank's participation at Davos this year would be "significantly reduced" but it is still sending key officials because many of the bank's main clients will be attending.
Davos is famed for contact building and dealmaking.
A Citi spokesman said that to save money, the bank would be sending only five senior executives -- including outgoing Chairman Sir Winfried Bischoff -- half the size of its delegation last year.
One can hardly blame CEO's for staying home. Citi's Pandit, the head of what was once the world's largest bank but that now does not even rank in the top 10 by market capitalization, has plenty to occupy him.
Citigroup lost $8.29 billion in the last quarter of 2008, it is in the process of restructuring into two businesses, and its shares are plumbing their lowest levels since 1991.
Other U.S. heavy hitters whose banks have received government money and are registered to attend Davos include JPMorgan Chase & Co
A JP Morgan spokesman was unavailable for comment and a Goldman Sachs spokeswoman declined to comment.
Some banks who used to be Davos devotees are not around any more -- the failed Lehman Brothers among them.
California Gov. Arnold Schwarzenegger, a Hollywood celebrity himself, told Davos' organizers last month his state's $14.8 billion revenue shortfall made it impossible for him to attend this year.
"Our financial situation is getting worse every day," Schwarzenegger told World Economic Forum Chairman Klaus Schwab in a letter.
The theme of the 2009 meeting, which begins Wednesday, is "Shaping the Post-Crisis World," and will address how to get out of the economic crisis.
The organizers themselves are trying to set a more sober tone, warning the 1,400 chief executives registered -- the largest number of top business leaders ever -- and 41 national leaders, that this year's edition of Davos will be a "very hard-working, roll-up-your-sleeves" meeting.
"If Davos were taking place in Chicago there'd be less discussion. But in the past 10 years, Davos has taken on a sheen of stardom," said business ethics specialist Michael Connor, a five-time Davos attendee, adding that seeing bankers socializing with stars might be "offensive" to the public now.
Most of the banks are tight-lipped about how their representatives will get to Davos, which is about a two-hour drive or train ride from Zurich, or a half hour by helicopter.
Rubenstein suggested the executives pay for their trips themselves to show they are serious about saving money.
"It's more symbolic," he said. "The time for economic greed is over -- there's a new dance."
(Additional reporting by John Poirier, Tim Ahmann and Caren Bohan in Washington, and Nichola Groom in Los Angeles; Editing by Phil Berlowitz)
