Aig Under Fire Again For Corporate Excess After Restructured Buyout
Financial news from the American International Group Inc (AIG) has not been comforting for the American taxpayer of late. Reporting Monday, November 10, that the company had lost another $24.7 billion in investments, AIG, the Federal Reserve and the Treasury revealed a new view where the unusual bailout of AIG ($85 billion) was restructured to over $150 billion, making it the largest federal bailout in history.
But hard on the heels of the restructuring comes an ABC News record that the financial giant held a six-figure (over $150,000) sales conference at a resort in Phoenix, Arizona just last week. The picture revealed that resort employees were ordered not to mention the name “AIG” and that company employees went to great danger not to advertise the financial giant’s presence, going so far as to make certain the famous initials were not on display.
AIG maintains that it was a legitimate business conference and was a sales meeting that could potentially generate over $200 million a year for the floundering giant. The meeting was set up to educate independent financial advisors, according to company spokespeople. AIG also maintains that the representatives themselves were footing most of the tab and that AIG’s bill would amount to only $23,000.
Democratic Representative Elijah Cummings, who is a member of the House Oversight and Government Reform Committee, immediately launched an impassioned attack Tuesday against the troubled financial giant. He sent a letter to the corporate executive office suggesting that such behavior in this time of economic crisis should be met with the resignation of the AIG’s CEO. On CNN, Cummings said that it was a disgrace that the company that has been given the largest government handout, including restructuring that handout on Monday (the day before), could spend even $23,000 on a business meeting in Phoenix when there were struggling citizens in his district (Baltimore area, Maryland) that did not make that kind of money in a year.
CNN reports that there actually were cutbacks to the original program. Former quarterback great and Fox Sports commentator Terry Bradshaw, who was booked as a motivational speaker, was cancelled.
Given the unpopularity of the $700 billion bailout of Wall Street, it is understandable that AIG would want to build determined there was no misunderstanding as to what actually went on in Phoenix. It was AIG that paid a $440,000 tab for top-performing insurance agents to spend a week at a retreat at the posh St. Regis Resort in California just days after the federal government saved the company from collapse. When they later picked up another government loan for nearly $38 billion, it was disclosed that the corporation paid for an $86,000 hunting slump in England.
Monday’s restructuring was characterized as a “one-off event” by Neel Kashkari, the Treasury Department’s interim assistant secretary for financial stability, at a press conference in New York. He said, “It is not the start of a new program.”
The question must be asked: If a “one-off,” then what were the other loans that led to the increased handouts?
Although the bailouts and buyouts and restructurings have all been talked about as having increasingly more government involvement, restrictions, and oversight, AIG (which has a restructured buyout bailout) tranquil seems to manage to advance under fire for excesses. Much of the bailout legislation constructed by the Department of the Treasury and the Federal Reserve has been criticized by opponents as being too relaxed and bereft of true oversight capacity.
The actions of AIG seem to point to this being more correct than not.
In the kill, criticizing a murderer for his technique once a dead body is presented is absurd, especially when one stands in witness to the killing…
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Sources:
CNN Television
Reuters.com
CNN.com
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Filed under Whole Life Insurance Rates by on Jan 19th, 2012. 
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