AIG execs splurge $440,000 at resort with bailout money
08 Oct 2008
Within four days after receiving an $85 billion bailout from the federal government, AIG thought it was time its top hard working executives needed a break and sent them to a week-long conference at one of the most exclusive resort in California where they ran a tab of $443,000, evoking horror among the members of the US Congress investigating committee set up to go into the reasons behind AIG's fall.
Details of the week-long getaway emerged at a Congressional hearing yesterday where congressmen expressed horror and indignation at AIG executives "wining and dining" at a time when the country was going through one of its worst financial crisis and their institution was saved from sure bankruptcy.
The grand retreat began on 22 September, the very day AIG was officially removed from the Dow Jones industrial average and within a week of receiving the $85-billion bailout (See: $85-billion bailout for AIG)
Members of the committee showed invoices of the St. Regis Resort in Monarch Beach where its executives ran a tab of $443,000 which included $200,000 bill for hotel rooms, $150,000 for meals, $23,000 bill for massages and other spa services, $14,000 for hair salon and manicure services, $10,000 in bar bills, $7,000 in greens fees, $7,000 for golf outings and $3,000 on tips, among others.
An AIG spokesman said the event was to reward independent insurance salesmen of AIG American General - one of the company's main US operations which offer life, health and accident policies.
Just days before Lehman filed for bankruptcy protection, the company changed its executive pay arrangement and gave its senior executives multimillion-dollar bonuses in spite of AIG incurring losses.
"Average Americans are suffering economically," said Henry Waxman, chairman of the House oversight committee. "They are losing their jobs, their homes and their health insurance. Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation."
"US taxpayers will be, in effect, paying for this," said Elijah Cummings, a Democrat, who demanded to know who sanctioned the event. "I think that person ought to be fired."
Presidential candidate, Barack Obama said the executives of AIG should be fired and the cost of the trip should be reimbursed to the US Treasury since the taxpayers have given the $85 billion bailout to save the ailing insurance giant.
