AIG still throwing lavish parties with your money
posted at 8:15 am on November 11, 2008 by Ed Morrissey
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Want to know what an insurance company does with a brand-new bailout check of $150 billion in taxpayer money? Throw a big party, of course! AIG execs only had one rule for their big shindig in Phoenix this week — don’t mention the name AIG:
In addition to the nearly 150 independent financial planners in Phoenix for training and education, the conference attendee list was a Who’s Who of AIG leaders, including Larry Roth, President & CEO, AIG Advisor Group; Art Tambaro, President & CEO, Royal Alliance Associates; Mark Schlafly, President & CEO, FSC Securities; Gary Bender, Senior Vice President, Investment Advisory Services; Bruce Levitus, Senior Vice President, Investment Advisory Services; and Stuart Rogers, Senior Vice President.
The ABC15 Investigators went undercover at the resort and found AIG executives having poolside meetings while drinking coffee and working out at the spa while other attendees were in conference rooms for seminars.
We also watched as half a dozen of the executives went to dinner at McCormick & Schmick’s at the Camelback Esplanade, racking up a bill of more than $400 for drinks, appetizers, and meals.
AIG execs did cut back on the splashy seminar. They cut Terry Bradshaw from the agenda. Bradshaw, one of the NFL’s greatest quarterbacks and a four-time Super Bowl winner, gets $40,000 per appearance as a motivational speaker. Maybe Congress ought to pay Bradshaw the money instead, to motivate themselves into cutting off bailout money to hearty partiers like AIG.
Actually, AIG told ABC that Bradshaw’s fee would come from product sponsors. They also claimed that all but $23,000 of the $343,000 bill would get underwritten by sponsors. If that’s true, then why cancel Bradshaw at the last minute? And if that’s true, then why all of the anonymity?
A hotel employee told ABC15, “We can’t even say the word [AIG].”
Sounds like AIG knew it had something to hide.
If we’re footing the bill for this company’s management failures, then we should be seeing them cut costs to the bone. That means training gets done in the most efficient way possible, and not through costly junkets at resort hotels like Squaw Peak. Having lived in Phoenix, I know that is a high-end destination. If they have to travel at all, let them stay at Days Inn, or some other less expensive digs.
These execs came to taxpayers, hat in hand, demanding assistance. It doesn’t appear that AIG needs any. When they start acting like they’re bankrupt, I’ll believe them.
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They should not get one more dime.
Mr. Bingley on November 11, 2008 at 8:22 AM
well now that they have “government funding” they might as well act like the government.
spypeach on November 11, 2008 at 8:23 AM
hmm..can their money be taken back? This should not be allowed.
becki51758 on November 11, 2008 at 8:26 AM
Just another dagger in the heart of the middle class as they are eliminated from the equation of the elite and the masses. Saul Alinsky, Obama’s mentor, is cheering in hell as the clash bwtween the classes inensifies. We’re screwed.
volsense on November 11, 2008 at 8:27 AM
If we’re going to get any mileage out of it, AIG must be transformed into a symbol, then universally and ceaselessly held up to represent the folly of the bailout. If this story doesn’t have enough staying power to become that symbol, then it’s just one lash out of a hundred, and when you’re taking that kind of beating, who’s counting?
RushBaby on November 11, 2008 at 8:27 AM
You have to spend money to make money. Events like these are a necessary cost of doing business. Could they have scaled it back and held the event at a less glamorous location? Probably. But events like these are typically arranged a year or more in advance, and AIG would likely have been subject to heavy cancellation penalties if they’d backed out…with nothing to show for the expense.
flipflop on November 11, 2008 at 8:28 AM
It is simply unbelieveable that AIG continues to flip off the American taxpayers; I guess they realize that the cash cow government is never-ending. My hatred for Nancy Pelosi is becoming all consuming.
anniekc on November 11, 2008 at 8:28 AM
They are not acting financially bankrupt, but they are acting morally bankrupt.
zb42 on November 11, 2008 at 8:28 AM
It would make for a great symbol, if only republicans hadn’t voted for the bailout that made it all possible.
This is a mess and I don’t know how the GOP distances themselves from it. In 2010, voters will remember it as the Bush Bailout. In 212, it will still be the Bush Bailout.
myrenovations on November 11, 2008 at 8:30 AM
I’m glad that they’re still trying to run a business to pull themselves out of this hellhole that has been thrust upon the american taxpayers with the aid and assistance of the idiots in congress.
I’m sure that AIG would be able to attract steller talent if they held their breakout meetings at the Waffle House.
Get a clue people! Breathlessly hyping up this “story” is just more manipulation and class warfare.
What’s next, the big bad evil AIG spends money on toilet paper!?
gatorboy on November 11, 2008 at 8:31 AM
Why not? The UAW members are getting their contracts kept, the CEO’s of Fannie and Freddie made off like bandits, Rham Emmanual is now one of the most powerful people in DC. Why should AIG be any different when one of the rules of the day is that the worse you behave the more financial and political power flows your way. Oh and Fannie lost another 29 billion the other day.
rob verdi on November 11, 2008 at 8:31 AM
Not that it excuses them in any way, but I think it’s worth pointing out that a $400 dinner bill for six people isn’t outrageous. Especially if it includes drinks. Now if that’s $400 of taxpayer money, then it’s $400 too much, but the article makes it sound as if it’s a wildly lavish dinner.
Farmer_Joe on November 11, 2008 at 8:31 AM
Now I know why they used to tar & feather people.
Irenaeus on November 11, 2008 at 8:32 AM
As a PHX suburb resident, I want to know how is this different than my tax dollars going to support the many millionaires in the AZ Cardinal organization?
Or my tax dollars supporting local symphonies?
Or my tax dollars supporting local YMCAs & municipal gyms?
In each case, I’m paying for other people’s fun & games.
jgapinoy on November 11, 2008 at 8:32 AM
These bailouts belong on the shoulders of ObaMacFannieMae. Every abuse and maleficence should require an investigation into him and the congress.
csdeven on November 11, 2008 at 8:33 AM
The execs need to have their paychecks cut to the level of a Congressman. We effectively own the company, so they should only make what public employees make. Don’t like it? Quit and look for another job. I’m sure lots of struggling companies would love to bring on the people who drove the world’s largest insurer into the ground.
BadgerHawk on November 11, 2008 at 8:34 AM
From the article:
Gatorboy is right…”get a clue”. Forget that AIG is expecting reimbursements from sponsors for a moment…do you realize how unbelievably cheap $343,000 is for something like this?
flipflop on November 11, 2008 at 8:36 AM
Spread the wealth.
the_nile on November 11, 2008 at 8:37 AM
I worked at a company that went through a Chapter 11 bankruptcy. This is not how a company under bankruptcy protection behaves.
Perhaps that’s the missing element here: we’re bailing out companies left and right, but we’re not treating them the same way that companies in Chapter 11 are treated. Such companies are required to appear before a bankruptcy judge and demonstrate their good faith in managing their cash flow and making arrangements with their major debt holders. Conducting seminars at lavish resorts doesn’t exactly demonstrate good faith.
I’m sure Frank and Dodd will get right on fixing that.
Dave Shay on November 11, 2008 at 8:38 AM
What is wrong with the conference room of the NY general office?
This is horsesh*t. I say gather their names, red flag their tax returns for the past three years, and give them IRS examinations/financial rectal exams that they’ll never forget.
What a fricking bunch of losers. I hope the media pillories these incompetent blowhards.
BuckeyeSam on November 11, 2008 at 8:39 AM
Can we arrange a “party” in prison with Bubba for those jerks?
grapeknutz on November 11, 2008 at 8:40 AM
Not to mention PBS dramas & concerts, collegiate sports & drama departments…
eea on November 11, 2008 at 8:41 AM
The bailout-mania presents the GOP with a perfect opportunity to reclaim the high ground of fiscal responsibility. I don’t care if Bush and Paulson support all of this nonsense, they are history–the public hates it. The GOP in Congress should make a principled case against more bailouts, should demand hearings about the implementation of the bailouts already approved, and should let the Dems and St. Baracky take full ownership of Wall Street Socialism.
james23 on November 11, 2008 at 8:41 AM
And regarding the “toilet paper” comment above, the company I worked at that was in Chapter 11 did NOT buy toilet paper for a few weeks because cash flow was so tight; we had to bring in our own.
Dave Shay on November 11, 2008 at 8:41 AM
That may be where the blame belongs, but that’s not where the blame fell. The average voter last week had no idea that Democrats led Congress or that Democrats caused this mess.
Every party or training seminar that AIG or any other bailout business has over the next four years will be news stories with President Bush’s picture in the bottom left-hand corner.
myrenovations on November 11, 2008 at 8:42 AM
They’re just playing the hand the government dealt them.
I’m sure the weasels in washington will try to score some populist points over this whilst forgetting that THEY appropriated the money
lodge on November 11, 2008 at 8:42 AM
Money for nothing, and no more democracy.
Hening on November 11, 2008 at 8:43 AM
When Gov’t hands out “free” cash carte-blanche this is what ALWAYS happens… doesn’t matter if it’s a multi-billion dollar company or Joe Schmo down the street.. will we ever learn?
beththebaker on November 11, 2008 at 8:43 AM
While we can’t let this whole debacle be a referendum against capitalism, as libs want it to be, you have to admit, we’re being force fed a fist full of crow for what these people did.
In the American Garden of Eden, we were offered the chance for free-market capitalism. But the requirement was, in order for that game to work, the animal passions that ran it had to be tempered by leaders who had developed the habits of prudence, temperance, fortitude, and wisdom.
Of course we let a lot of leaders in without those virtues, and it turned into a purely animal enterprise, a freak show, the kind of folks Jesus chased out of the temple.
Face it, while many in business are good people, a lot of heartless bastards got into the act, and our gift of free-market capitalism devolved into a grotesque orgy.
We’re about to be kicked out of that Garden of Eden, via socialist regulations and controls, and I can’t say we don’t deserve it. Our businesses and industries should have been run by decent, dignified men and women. Not the smarmy bohemians who squandered it, especially in the last quarter century.
Time for self-reflection.
jeff_from_mpls on November 11, 2008 at 8:43 AM
I’ll bet they were at the party.
eea on November 11, 2008 at 8:43 AM
That’s socialism for ya.
Dave Rywall on November 11, 2008 at 8:44 AM
Precisely right, and our government is just as culpable.
Bugler on November 11, 2008 at 8:44 AM
Don’tcha mean “Anyone’s money who is stupid enough to still be paying taxes to the Government”?
Bicyea on November 11, 2008 at 8:45 AM
I wouldn’t hold my breath. Now that The One is transitioning from campaign mode to Ruling Mode, they need to wait for some clear signals regarding just which corruption to expose and how the public is to be deceived going forward.
RushBaby on November 11, 2008 at 8:45 AM
Just got A statement from AIG last friday. It says, “With an Orange Savings Account, Money really does grow on trees”. Then the go on to offer a whopping 2.75% Annual Percentage Yield. The word impressive is used over and over again, then they talk about their “7 million happy customers”. If they can introduce to just one, I’ll send them some money.
Tommy_G on November 11, 2008 at 8:47 AM
More:
Oooh…scandalous! When ABC15 can provide evidence that AIG execs were putting poolside coffee on their expense reports for reimbursement, I might be offended.
And a news flash for people who don’t spend much time in hotels…hotel and resort workout facilities are almost always free of charge.
I can understand a bit of outrage if AIG was really pissing away their bailout money, but this kind of scrutiny is just stupid.
flipflop on November 11, 2008 at 8:48 AM
I suspect that was ING, not AIG.
BigD on November 11, 2008 at 8:49 AM
Paulson is a Dem
thomasaur on November 11, 2008 at 8:50 AM
I just got home from work and am a little tired. I stand corrected. Can I still be indigent?
Tommy_G on November 11, 2008 at 8:51 AM
flipflop on November 11, 2008 at 8:48 AM
You are absolutely right. The “investigative” aspect of the story is a joke.
Work travel isn’t a party. It could seem like it to an inexperienced investigative reporter, but I assure you, every time I sat by a pool drinking coffee, I was probably thinking about how the hell I’m gonna get a plane out of there as soon as possible, or whether my lost luggage is going to make it to the front desk before my morning meeting.
jeff_from_mpls on November 11, 2008 at 8:52 AM
I can’t understand why some of you want to excuse the “behavior”, AIG knows the media is watching them! This latest retreat is unacceptable if only to the point of public perception. They would have gotten a portion of their contractual deposit back, and one 400.00 bill at M&S was probably just a portion of what was spent- lots of company exec’s split a bill six ways so that their individual expense reports don’t draw attention.
No, this is yet another big, “f*ck you” to the taxpayers; There are plenty of executives out there looking for jobs that AIG doesn’t need to hold fancy meetings to entice them- in fact, if AIG is looking to entice people, they better be looking for cost cutters, not fancy pants people!
anniekc on November 11, 2008 at 8:54 AM
Well folks, just the tip of the iceberg here. After we bail out the auto makers, wonder what they will do to cut back on spending. “crickets chirping”
And the comment on must spend money to make money is ridiculous for this situation. This company’s first action needs to be how to stop hemorrhaging money. They can “spend to make” later after they show they can figure out how to run a company.
rayvet on November 11, 2008 at 8:57 AM
If AIG needs a bailout, I am sure they have meeting rooms at thier headquarters where they could hold meetings. I’m sorry, but if they are getting a bailout from us, then no money should be spent on anything that is not a necessity for business operations. No bonuses, no raises, not increase in benefits. It’s out money and we aren’t getting any bonuses or meetings at a luxury hotel.
bopbottle on November 11, 2008 at 8:57 AM
I do. And I understand that “normal” business activities can’t just cease on a moment’s notice.
The problem here is that the coverup is worse than the crime. If AIG had issued a pre-event statement explaining what it was, why they were doing it, how much it would cost including potential cancellation fees and the source of the funding then they could possibly have gone forward without incidence.
But instead they skulked around, banning mention of “AIG.” They behaved like cheaters and I can’t blame anyone for thinking they are because of it. AIG sure hasn’t done anything to counter that notion.
Gilda on November 11, 2008 at 8:58 AM
As much as it sucks that AIG individuals got to benefit, the key fact is that there were “independent financial planners” in attendance, and they were the target audience. These guys are hired guns and if AIG doesn’t show them a good time, they aren’t going to sell AIG products, they’ll sell Prudential, Hartford, whatever. That’s not what the government wants to have happen. Insurance is a competitive game, and nowhere more so than in the independent agent channel.
venividivici on November 11, 2008 at 8:58 AM
First, this wasn’t a “retreat”. It was a sales education conference…from the article: “In addition to the nearly 150 independent financial planners in Phoenix for training and education…”.
Who do you think companies like AIG rely on to bring them new business? If these guys don’t know how to sell AIG’s financial services, they’ll push another company’s products.
Like I said earlier in the thread, AIG could have moved the event elsewhere, but because these things are arranged way in advance (like a year or more), they’d have paid heavy cancellation penalties probably equal to the basic cost of the conference.
Let’s keep an eye on companies that get bailout money, but let’s be reasonable about it.
flipflop on November 11, 2008 at 9:00 AM
Now THAT, I’ll admit, is a valid point. It looks crappy.
flipflop on November 11, 2008 at 9:07 AM
I keep saying it, and I’ll say it once again:
We need to bring tar & feathering back!
Majority vote wins, we strip em naked, roll em in hot tar, chicken feathers all over, and then run them out of town ridin a rail.
Just think of the wonderful list we could instantly build for this new program: Barney Frank, Chucky Schumer, Chris Dodd, AIG execs… and the list goes on and on.
warriorlawyer on November 11, 2008 at 9:07 AM
They should be all horsewhipped, sfter due legal process. Also put someone from the government in control of how these a__holes spend their money for “trasining” and other junkets until we’re repaid. For crying out loud.
skatz51 on November 11, 2008 at 9:10 AM
It really doesn’t matter what the truth is in this situation because the perception of mismanagement and bad stewardship is what really damages AIG.
This whole conference was probably planned before the company got that huge (and ill advised) gift from Congress. They’ve already been hit with one scandal for a huge party. Even if this is not more of the same and there are legitimate business-related reasons for this conference, holding it at a warm-weather resort with spa services really looks bad. Next time, let them hold it at the Newark Ramada Inn.
P.S. I’m going to make a point of “thanking” my Congressman once again for bailing out AIG.
highhopes on November 11, 2008 at 9:17 AM
Would everyone feel better if they met at a Motel 6 and wore blue jeans and tee shirts?
I am as pissed at these lavish meetups but they have to conduct business.
Remember too that these resorts have employees who stand to be laid off once business grinds to a halt.
I sure as hell can’t afford to pay the resort prices anymore.
FireBlogger on November 11, 2008 at 9:18 AM
Huh? Our government is in the process of throwing something like $190 BILLION DOLLARS of our money at these well-connected pricks, but “someone” from that same government is going to monitor their coffee fund?
Bugler on November 11, 2008 at 9:20 AM
Ed:
The interesting thing about all of this is that their subsidiary companies are being put on a shoestring. My mom is the Director of Training and Development for American General, which is one of AIG’s crown jewels. She also cross-trains AIG execs in Houston and New York in executive leadership and team building. She has seen her budget halved, and the infighting is getting intense at all levels. You wouldn’t believe the anger in the subsidiaries that is being aimed at AIG’s corporate leadership. She is extremely well-connected, to the top of AIG and several other of its child companies, and there is a palpable sense of fear that even with the blank check from Uncle Samta, the organization will be sold off piecemeal. Not sure what AIG’s game is here, but they cannot go on with business as usual. Their other companies sure as hell aren’t.
Flyover Country on November 11, 2008 at 9:23 AM
I know some people at AIG and this just amazes me. Most financial services companies have long ago cut out all the sales meetings and training junkets like this. The company I used to work for had its last one in August of 2006. As soon as it started losing money in early 2007 it cut out everything, including executive bonuses. A planned executive retreat in Puerto Rico was cancelled. Even the company board meetings were moved back to the HQ to cut costs.
Everyone who works in this industry now is just glad to have a job! They don’t expect any corporate junkets for a while. So saying that AIG needs to continue to do events like this in order to keep its employees and people who sell its products happy is baloney. This is just rank corporate greed and stupidity.
There was a Wall Street Journal story last week about AIG still lobbying in the states against new laws requiring licensing and regulation of mortgage originators. AIG got away with a lot by vitrue of not being a bank, but it was determined to fight even the mildest regulatory measures.
It’s too bad Lehman Bros. was allowed to fail and AIG wasn’t. I don’t think you would see Lehman doing stuff like this now if it had survived.
rockmom on November 11, 2008 at 9:27 AM
Good point. One of the worst aspects of this government-sanctioned theft is the negative effect on legitimate, responsible companies who are in cometition with these pigs.
Bugler on November 11, 2008 at 9:31 AM
These hogs are so use to the trough, that it will take a bigger hog to push theme out of the way…
It’s too bad Lehman Bros. was allowed to fail and AIG wasn’t.
The irony is the Lehman was one of the companies that was selling AIG products, so they let one of the “down” companies that sell their product go out of business, yet keep the company that helped cause Lehman to fold.
That alone shows that congress is just throwing money up into the air, without any forethought of where it is landing. Without any real “bailout” plan.
It is like the man in a rowboat that springs a leak, so he drills another hole so he has a hole for the water to run out.
right2bright on November 11, 2008 at 9:37 AM
This is just infuriating.
WisCon on November 11, 2008 at 9:40 AM
Currently living in a big convention city. The planning for this “conference” probably started a minimum of 12-18 months ago. It’s not like the AIG execs got together over Golf last month and decided they wanted to go to Phoenix. The fundamental questions are whether or not it was too late for AIG to cancel without financial penalty and what the value of this conference is (does real business occur or is this a giant party).
As I posted above, the real damage to AIG is the perception no matter what the truth is.
highhopes on November 11, 2008 at 9:40 AM
Back to sleep while the Treasury is looted.
ronsfi on November 11, 2008 at 9:41 AM
This article, post, and 90% of the comments are nothing more than crying wolf. It really helps to lower future credibility. 1/2 the commenters obviously didn’t read the article nor have any idea of the subject matter. There are numerous reasons to bash the disgusting incompetent pigs at AIG, but this isn’t one of them.
Of course it wasn’t promoted as usual, because most morons wouldn’t understand it was funded by SPONSORS. Of course it wasn’t at the Motel 6 with t-shirts/jeans because no one would have come. No bailout money was used for this. They have to have these events to operate. Does anyone even have a job here aside from flipping burgers, or any point of reference?
nottakingsides on November 11, 2008 at 9:48 AM
I’m not commenting on the specifics of this post–I don’t care how AIG spends the money it steals. I do care that the government has clearly committed itself to gathering as much of our tax money as they can possibly get their hands on, and then blowing it up a wild hog’s ass.
Oh, and BTW, I think flipping burgers is perfectly honorable labor.
Bugler on November 11, 2008 at 9:54 AM
Excellent points, but I’ll go one step further. If these sales managers are the engine that drives AIG, then they must be kept productive at AIG.
Their competitors are no doubt looking at the vulnerability of AIG as an opportunity to poach top talent. And if AIG was able to orchestrate a nice trip for them along with required training and communication and some access to top executives, all for $23,000 – are you kidding me?
It’s genius management, and we should all be applauding their creative style and vision.
Seriously. Ed, you should know better than to flop for cheap populism.
Jaibones on November 11, 2008 at 9:55 AM
I work for a company many consider well run…maybe even very well run. Our operational approach during tough times (for us, the last several years) is to put the hammer down on expense for internal meetings. As an example, I’ve met only half the employees who have reported to me in the last several years.
But when it comes to external expense, whether educating/entertaining customers, or educating/motivating our sellers, we still spend. In fact, we’ve had meetings at that resort. Especially when your “sellers” are not actually employees, you have to put together a meeting they are willing to come to (instead of spending those days collecting fees from their clients)…or they will sell some competitor’s offerings.
My only question is that bill from McCormick & Schmidt’s. I would be more likely to believe $400/person at that restaurant, than $400 total for 6 persons. For that size group, $400 is just the before dinner drinks, at most fancy steakhouses.
If I were AIG, I would put all meetings, along with estimated expenses and a business objective on a publicly accessible website, ahead of the meeting. Be transparent. The process will be self-correcting, and the Camelback-style meetings will continue, the bird-hunting trips will stop.
That approach is an updated version of the “Sunshine Rule,” an ethical approach I was taught early in my career by a senior exec at my company…he said, “If the decision you are about to make is not one you would take if the New York Times and CBS had reporters sitting on either side of you, it is probably not a wise decision.” Works every time.
The Wild Duck on November 11, 2008 at 10:02 AM
If I could figure out how to get a $190B check from Uncle Sam, would I be a “genius manager” too?
Bugler on November 11, 2008 at 10:03 AM
April 16th 2009 oughtta be reeeeeally interesting.
Coronagold on November 11, 2008 at 10:03 AM
So if the perception of posters who actually have a link to the story is outrage, do you really think the average man on the street is going to pay attention long enough to get a lecture on sponsorships and the need to hold these things at fancy hotels? Lotsa luck with that. You may be right in practice but it’s irrelevant.
AIG has a PR problem because there is already anger about the company’s huge bailout with taxpayer dollars and perception of their top leaders continuing to live lavish lifestyles. You say they have to spend money in this way to make money and that may be true. The problem is that so long as the average citizen is angry over this bail out, AIG needs to prove that they are a good and responsible steward of the money they got. Motel Six and Cheeze Whiz on crackers is far more defensible than the Phoenix Hilton and a $400 tab at McCormick and Schmick’s.
highhopes on November 11, 2008 at 10:07 AM
I don’t see how it matters. They keep getting our money. Obviously our opinion of them is completely irrelevant.
Esthier on November 11, 2008 at 10:13 AM
Maybe we could print the pictures,names and addresses of the leaders of these corporations as a rouges hall of shame. Have Warrren Buffet chew them out. Maybe the town they live in will shun them?
Have them “Voluntary” refund bonus money as ill gotten gains.
Do as Lee Iocaco did work for a $1 a year,surely multi millionairs can show some sens of mission to save a company with MY MONEY in it. Since we the taxpayers now own this thing can we elect board members?
Col.John Wm. Reed on November 11, 2008 at 10:16 AM
This is precisely why we are now in the age of Obama; people are sick of this sh*t.
mylegsareswollen on November 11, 2008 at 10:17 AM
I think a lot of people here are taking their anger at Congress for the bailout at our expense on AIG. That’s understandable, but now that we’re de facto shareholders in the company, we have a vested interest in seeing them return to profitability. They can’t do that if they don’t keep their independent sales channel trained on their products.
By the way…has anyone ever seen the “conference facilities” at a Day’s Inn? I’m just sayin’…
flipflop on November 11, 2008 at 10:17 AM
If I were Congress, I’d insist on strict oversight about how AIG is spending their gift. We supposedly couldn’t let AIG go under because of the consequences. It seems to me that by accepting a federal bailout AIG has to go above and beyond normal business practices in proving they are not squandering capital.
highhopes on November 11, 2008 at 10:18 AM
So why are they lurking around the Phoenix Hilton without signage? That’s a bad tactic if they can make the case that this is a necessary part of doing business and returning to profitability. They look guilty even if they are not.
The anger at Congress and the corporate beneficiaries of the bailout is justifiable. We’ve used tax dollars to rescue private businesses who went under due to mismanagement and greed and individuals who opted to live well above their means. The normal rules of business don’t apply to a situation where the primary stockholder is a hostile taxpayer. To date, AIG seems completely oblivious to the perception of the way they continue to operate.
highhopes on November 11, 2008 at 10:27 AM
Tar. Feathers.
token on November 11, 2008 at 10:27 AM
Let them die.
I have fired off several letters to legislators.
Enough.
drjohn on November 11, 2008 at 10:28 AM
AIG should not get another dime of taxpayer’s money and should allowed to crash and burn. It sound like some of these jerk execs should end up as cell mates with their counterparts form TYCO and ENRON.
pilamaye on November 11, 2008 at 10:29 AM
As a tax payer you are AIG, as voter you are Congress,and you have no say and you are screwed
driver on November 11, 2008 at 10:32 AM
This entire economic crisis is a scam and a scandal.
Businesses are now making things look worse to get more handouts from the Government.
Why try to solve the problem if the government will give you billions if you don’t?
Why should I pay my mortgage if the govt. is going to make a better deal for those that don’t pay their mortgage? When the govt. is involved everything goes to the lowest common denominator.
Down the toilet.
albill on November 11, 2008 at 10:32 AM
Our congress has no interest in what’s become of OUR money. And even if you shoved this right under their nose they wouldn’t do a thing about it because then there would go their perks and kickbacks and votes and contributions. The whole system needs to be “changed” and my confidence in Obama’s ability to do so is about the same as our approval rating of congress.
scalleywag on November 11, 2008 at 10:43 AM
WHAT? No mention of this HALF-MILLION DOLLAR spa vacation, from over a month ago?
AIG issued a statement saying that “This type of gathering is standard practice in the industry and was planned a year advance of the Federal Reserve’s loan to AIG. We recognize, however, that even activities that have long been considered standard practice may be perceived negatively. As a result, we are reevaluating various aspects of our operations in light of the new times in which we operate.”
I guess they didn’t LEARN much from THEIR reevaluation of their various aspects of operations… ie: their GREED and their DISDAIN for us common type folk!
“Let them eat cake!”
Or how about this $100,000 Hunting Trip for AIG exec’s AFTER their half-million dollar spa treatment? No mention of that either?
And those are just the tip of the iceberg, I’m sure. I wonder what other lavish trips, vacations, retreats, spa treatments, gifts, and exotic hunting trips have transpired since WE tax-payers have poured 100 BILLION DOLLARS + into their coffers.
But what I really want to know is, HOW MUCH OF THAT ASTRONOMICAL AMOUNT OF BAIL-OUT MONEY IS GOING INTO THE POCKETS OF THE SENATORS AND CONGRESSMEN WHO GREASED THE SKIDS AND MADE IT HAPPEN??? Does AIG really have that much gall, and are they really that stupid, to spend spend SPEND a portion of those billions upon BILLIONS of dollars of bail-out money on their own comforts and whims without some BIGTIME HOT-SHOT POLITICIANS WATCHING THEIR BACKS?
Hundreds of Billions of Dollars DOES NOT get passed out like candy without SOMEONE’S palms getting greased!
WHO ARE THEY???
…
FlatFoot on November 11, 2008 at 10:44 AM
If you want to see a deeply disturbing yet coffee-spewingly funny video showing the insanity of the banking industry during the Bank of America and MBNA merger, take a look at this devoted banking employee singing a tribute to it all.
http://www.youtube.com/watch?v=wmIObmv2t6M&feature=related
I laughed so hard I cried.
Watch it.
jeff_from_mpls on November 11, 2008 at 10:48 AM
This just fries me even more. They got more money the other day. Still, there are some Senators, like the one that will be our Dictator, And some that he picked to be in his cabinet. Getting away with milking our system. Not only should AIG should be hung on a clothes line. So should a bunch of thieves that are suppose to be representing Us. They will keep doing this, and we will keep going down more. DHL, Our Postal service is cutting down. There are so many businesses here that are shutting down. Circuit City filed for Bank bankruptcy. Mervyns, And so on. Looks like our Reps. are making sure that we won’t have or be able to raise hell about nothing. Then they bleed us more.
sheebe on November 11, 2008 at 10:49 AM
If I wanted to read KOS or The Nation, I’d have gone there.
WTF is with you people? The whole point of a bailout is to keep these firms as going concerns, and the way that it was structured was designed to cost the government as little as possible. They’re not getting GRANTS they’re getting loans at penalty interest rates.
So you not only want the government to take all the equity, but you want them to get treated like government employees? WTF???
None of these expenses are out of line. Almost no employees of AIG were actually in attendance. It’s a freaking sales meeting, these people are functionally customers of AIG, and you seem to want to cripple the business. Has no one here actually worked for a living? Ever sold anything? Would you buy a financial product from some guy holding a meeting in a waffle house?
Idiotic class warfare is the dem territory, not people who are in favor of free markets and competition. The businesses being bailed out didn’t fail (or almost) due to overspending, egregious expense accounts, or the like. They were in businesses that had by design fundamental mismatches in the duration of assets and liabilities. There was a crisis of confidence and any business with such a mismatch was up the creek. So why focus on irrelevancies?
Legitimate points of debate are exactly how levered such an institution should be, how hedges and VAR calculations should be made, and other aspects of corporate control and accountancy. What looks to be a major issue is that incremental defaults weren’t modeled (risk of 100% default was accounted for, but risk of a margin call wasn’t, and margin calls were the problem for AIG) and that firms weren’t modeling failure cascades on their own stocks & CDSs (how does the motion in firm’s stock price and other tradeable securities affect the relationship with creditors and counterparties – how will the firm’s securities move after the firm gets margin calls, and then how will that affect margin requirements with counterparties… what’s the risk of death spiral).
These idiotic rantings are the same things that lead to SarbOx, malicious (and false) Enron prosecutions, and travesties like the Thomson memo (which has been thrown out and most of the Enron cases tossed due to government grandstanding). Business failure is not a crime, especially when it’s a bank run. Trying to do so is one of the worst traits of Mob Marxism and I am disgusted by the writers and commenters who are engaging in it. You are all better than this. Don’t let the idiot reflexive marxists in the MSM goad you into doing their dirty work. Don’t assist the left, take some time to think.
libertarianuberalles on November 11, 2008 at 10:55 AM
Watch it.
jeff_from_mpls on November 11, 2008 at 10:48 AM
That was interesting. Wonder if Bono the Left wing would appreciate this? I never liked B of A Will never bank with them. Was funny, but at same time found it kind of eerie. At least they are staying strong.
sheebe on November 11, 2008 at 10:56 AM
Everyone in the world knows AIG was asking for a handout. Their customers know this. For AIG to go on pretending as though they’re rolling in dough is stupid, especially when they’re publicly asking for more money.
Not having their meeting at a Waffle House doesn’t hide from anyone the fact that they’re beggars.
If you think these comments are the behavior of Kos kids, then you’re off your damn rocker.
Esthier on November 11, 2008 at 11:07 AM
Anyone for tar and feathers?
DL13 on November 11, 2008 at 11:07 AM
Also, these retreats are just the tip of the ice burg. Even if you can argue that AIG is supposed to pretend it’s something it’s not, where’s the argument for handing out big bonuses to executives who sucked so badly at their jobs that they needed billions of dollars in bailout money in the first place?
And what kind of libertarian supports government involvement in business anyway?
Esthier on November 11, 2008 at 11:10 AM
independent financial planners
This is the same as the supposed “spa vacation.” It was a payout to independent contractors and a pretty cheap one at that. If you want them to all abandon AIG so that it does go belly up as quickly as possible, then by all means ban this sort of thing. If you don’t want them to sell insurance anymore then why did we float them any money at all?
Why did they try to hide it? Because media and bloggers are hungry for stories that fit the economic populist meme of the evil corporation wasting taxpayer dollars. You just proved their point.
MargaretMN on November 11, 2008 at 11:12 AM
At this point about all we can do is laugh. Bottom
line: you get what you pay for, which is to say that if you wish to stop/slow an activity, then you tax it, and if you wish to encourage growth of an activity, you subsidize it.
Send_Me on November 11, 2008 at 11:15 AM
Government control of the economy. What could go wrong?
Still they have a long row to hoe before they catch up with government thieves like Raines, Johnson and Gorelick.
PattyJ on November 11, 2008 at 11:20 AM
It’s kind of like the mother who gets a bunch of child support money and goes to have her hair and nails done and buys a new dress though while the child sits in the car with holey jeans and dirty shoes, though. Even if the mother needs a new dress and look professional for work, it’s still the child’s money.
scalleywag on November 11, 2008 at 11:21 AM
There was speculation that Janet Reno leveraged her way into a second term as AG because she knew where all the dirt on Clinton was stashed. I’m convinced that Reno must have shared what she knew with Gorelick. Never have I seen a bigger traitor to this nation seemingly impervious to accountability for her actions.
highhopes on November 11, 2008 at 11:44 AM
PARTY!
DarkCurrent on November 11, 2008 at 12:07 PM
MEMO to RNC:
Since the Liberal Democrat’s caused this
financial mess,
Republicans need to say no to every single
bailout,and let the Liberals screw this up!
Either way,Democrats and the MSM will blame
Bush,and the Republican Party!!
canopfor on November 11, 2008 at 12:13 PM
Every American taxpayer should be livid about this!
canopfor on November 11, 2008 at 12:15 PM
And people wonder why O got elected. With the prez and spending money like a druken sailor.
Thanks W for screwing the pooch for US.
PS. what ever happend to people fixing their own problems?
ColdWarrior57 on November 11, 2008 at 12:19 PM
We bought a bad business, that’s done. Now should we allow it to try and function as a competetive business and perhaps succeed, or choke it to death to ensure failure?
DarkCurrent on November 11, 2008 at 12:25 PM
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