AIG Sucks

Just when you thought AIG had learned their lesson, they decided they just weren’t done spending our tax dollars and our government bailout money.

According to the AP and The Consumerist:

The AP is reporting that AIG executives aren’t done partying yet – they took an $86,000 hunting trip even as the company was requesting an additional $37.8 billion loan from the Federal Reserve. Meanwhile, New York attorney general Andrew Cuomo has said that as long as the company continues to be propped up by the taxpayer, he has the power under state business law to review and possibly rescind any inappropriate AIG spending.
In a letter to AIG, Cuomo laid down the law: In the last several months, as AIG was teetering toward bankruptcy, and operating with unreasonably small capital, AIG nevertheless made numerous extraordinary expenditures in the form of executive compensation payments, junkets, and perks for its executives.

For example, in March 2008, ignoring the massive losses AIG was experiencing, the Board awarded its Chief Executive Officer a cash bonus of over $5 million and a golden parachute worth $15 million. Similarly, in February 2008, a top-ranking executive who was largely responsible for AIG’s collapse was terminated, but still permitted by the Board to keep $34 million in bonuses. This same individual apparently continued to receive $1 million a month from the company until recently.

Moreover, even after the taxpayer-funded bailout of AIG, the company paid hundreds of thousands of dollars for luxurious retreats for its executives, including an overseas hunting party and a golf outing. We
believe these expenditures and payments, made in the absence of fair consideration, violated New York law, specifically, N.Y. Debtor & Creditor Law fj 274, which deems such payments to be fraudulent conveyances.

AIG has responded to criticism about the hunting trip with “regret.”

“We regret that this event was not canceled,” said a spokesperson.

AIG has borrowed about $123 billion from the Federal Reserve in the past month.

According to the Consumerist:

-Begin-
AIG has decided to cancel a second pricey hotel party for their brokers after receiving another loan from the Federal Reserve for $37.8 billion. AIG defended throwing a $400,000 week long bash for its top independent insurance agents and some AIG employees immediately after the bailout – claiming that these events were “standard industry practice” and that they must continue. They announced that they would go ahead with another event at the Half Moon Bay Ritz-Carlton in northern California. 50 AIG employees were  expected to attend.

At least one member of Congress was pleased at the news:

“I am somewhat relieved to hear that AIG has canceled their Ritz-Carlton conference, which was nothing less than a slap in the face of the American people,” said Rep. Elijah Cummings (D-MD).

“I cannot fathom how in the same day-the very same day-that AIG asked the government for another $37.8 billion loan, the company would even consider moving forward with plans to host another large conference at another luxury resort.”

AIG’s spokesperson said that the company will have to pay some cancellation fees, but admitted that the era of fancy conferences and $23,000 spa bills seemed to be over.

“We’ll certainly lose some money in cancellation fees, but it’s just beyond the point of trying to conduct these meetings given the uncertainty that’s taking place,” said Ashooh.
-end-

I’m going to clear the air. AIG and some people are saying the money that they used on the St. Regis party was not tax-payers money. It could be true. Even if it wasn’t our money, it doesn’t look good on AIG’s part. They shouldn’t be spent extravagantly. Why not the Best Western? Or Motel 6? Does it have to be the St. Regis and the Ritz?
In such unique economic times, the last thing the American public needs to see is our money going to a company whose spending it on lavish retreats. Whatever “their” money was, it was OUR money. We paid
for their trip, regardless if it came from taxes. We’re all in it together. Let’s just all get along and be responsible.

Read: Outrage Leads AIG To Cancel Second Luxury Retreat, AIG Gets $37.8 Billion More – After St. Regis Party, AIG’s St. Regis $440K Bill, After Government Bailout, AIG Spends $440,000 at St. Regis Monarch Beach Resort, CA

Photo Source: aadpa.org

Just when you thought the AIG St. Regis Party story couldn’t get anymore confusing and worse, it did.

Straight from the OC Register:
-Begin-
AIG, the insurance company bailed out with $85 billion in taxpayer funds, is getting another $37.8 billion infusion from the Federal Reserve to help cover mounting losses, the AP reports.

As of Sept. 30, AIG had drawn $61 billion on the $85 billion credit facility, of which about $54 billion has gone toward its securities lending and AIG’s financial products area, the AP reports.

The rest of the money has been for other liquidity needs amid an “unprecedented” freezing of credit markets, Chief Executive Edward Liddy said last week.

The Register’s O.C. Watchdog blog broke the story that employees of an AIG subsidiary – and some of their best customers – who blew more than $440,000 at a retreat at the St. Regis Resort Monarch Beach last  month, days after the record $85 billion bailout was approved. AIG has been blasted in Congress for its O.C. bash.

Liddy wrote to Treasury Secretary Henry Paulson on Wednesday to say that most of the company’s 100 guests at the St. Regis retreat weren’t  executives – and they had planned the retreat before the bailout.
-End-

Read: Letter Libby Wrote To Paulson

Similar Post: AIG’s St. Regis $440K Bill, After Government Bailout, AIG Spends $440,000 at St. Regis Monarch Beach Resort, CA