AIG's over-the-top blast bombs in Congress

Just a few days ago, we posted about the lavish retreat the execs from AIG American General enjoyed mere weeks after their parent company threw itself on taxpayers' mercy and accepted a massive $85-billion bailout. (One of our favorite blogs, The O.C. Watchdog, broke the story.)

Now, word of that slice of the lush life has trickled down to Congress, where our elected officials aren't too thrilled. Our own Rep. Henry Waxman, who just happens to chair the House Committee on Oversight and Government Reform, took AIG to the woodshed, then promptly posted the itemized list of expenses.

So just how much did the AIG execs spend?

Rooms: $139,000, with an addition $2,900 on tips. Banquets cost $147,000. The spa bill came to close to $25k, which makes the $6k spend on miscellaneous meals and room service seem positively thrifty by comparison. Total bill for the shindig: $440,000.

AIG said the company involved is a subsidiary, not in financial turmoil, and anyway, the whole junket was planned a year ago. Waxman, needless to say, was not amused.

"In each case, the companies and their executives grew rich by taking on excessive risk," said Waxman. "In each case, the companies collapsed when these risks turned bad. And in each case, their executives are walking away with millions of dollars while taxpayers are stuck with billions of dollars in costs."

Waxman added, "The AIG CEOs are like the Lehman CEO in one other key respect -- in each case, they refuse to accept any blame for what happened to their companies."

A sampling of reactions in Bloomberg, CNN Money, Politico and the Washington Times.

--Veronique de Turenne

Photo: TimmyGUNZ / Flickr, via Creative Commons

Comments

[PacificGatePost]

THE MOST IMPORTANT LETTER ALL CEO’s SHOULD RECEIVE

A NEEDED FIX IN ALL BOARD ROOMS

Isn't it time the system went in for some much needed repair?

Due diligence and oversight long ago slid out the window. No one was watching.

Time to do something about it.

Here's a huge one they all missed.... The dramatic change that swept through all of North America's boardrooms over the past 30 years. It is one of the underlying causes of the headache the economy is now feeling, but more importantly, it has resulted in the general feeling of "disconnect" by most Americans.

"WE THE SHAREHOLDERS OF YOUR COMPANIES......

http://pacificgatepost.blogspot.com/2008/03/letter-to-ceos-of-fortune-1000-cos.html

[Carol]

I'm sorry, but if those execs had ANY decency, they would have promptly CANCELLED the planned spa retreat, PLUS reimbursed the company (out of their millions of dollars in pay and bonuses), for any non refundable costs incurred becaused this thing was planned..... They can afford it. Then the govt needs to try to retreive any bonuses and "compensation" to these overpaid, worthless execs as soon as possible. Heck, my 15 yr old could have done a better job at running a company than they did... Let's see... they ran it in the ground quite promptly upon taking over in 2005, especially after all the expensive comps they were getting... even a 15 year old would have realized that the bottom does go dry eventually....
Boot all these overpaid execs, sue them for the money, freeze their assets until it is heard in a court and put reasonable people who know what they are doing into these execs positions to run this company as it should be... not as a slush fund but as a bonafide company working to increase it's assets....

[Top Executive 1]

Reasons are :
1. Greed
2. No accountability
3. Rewards for failure (Termination Bonus's)
4. Larger than life egos.
5. Country club mentaility
6. All talk and no action by the "little people"
7. No acceptance of responsibility for decisions
8. Spineless Boards of Directors

[One that listens and reads]

Get this story right will you. It was not a retreat for AIG execs. It was for the TOP PRODUCING independent agents selling AIG policys to high end clients. Additionally, this was not a corporate event. It was hosted by an AIG subsidiary from a well capitalized, well funded and profitable Insurance business. Where I don't agree that the timing is good, the event was planned months in advance.
It's business folks.
Get your facts right.

[hubris unlimited]

Dear "one who listens and reads" --

try living up to your 'name'. the story names the company, calls it a subsidiary of AIG, says its not in trouble. facts all clear.

you know what you do when the whole economy goes into the crapper? you cancel. even if your faking being a caring human being, you cancel. and you dont shoot the messenger.

[End of Capitolism]

So is this a taste of how our newly forming socialist country will react to businesses who have spent money in such ways since the forming of our country?

Since the government now 'owns' AIG it can tell the employees how to spend their money. Isn't that socialism?

[Fred]

@End of Capitolism (sic)

No that isn't socialism. If you looked a bit closer at the countries that do run social democratic systems (primarily in Western Europe) you'd realize that. Given your literacy skills (hint: it's capitalism - the Capitol is where you send your bought politicians) I doubt very much that you're ever going to earn the $280 million that the AIG executive who created this mess took out of AIG in just five years. But you just keep slaving away earning your crust and parroting his line while he laughs at you. After all, letting crooks buy politicians and screw their customers/clients/employees while salting away obscene amounts of cash is just the America Dream isn't it. Sod the poor bastards who either can't get health care or go bankrupt trying to pay for it when they get ill. It's all their own fault - losers.

[ErikKengaard]

When will the LA Times start calling for Waxman to investigate Fannie Mae and Freddie Mac, and call Franklin Raines to testify? When?

[ErikKengaard]

Look on YouTube for Barney Franks Fannie Mae. For Chris Dodd and Fannie Mae. Search the Congressional Record (Thomas dot gov) for 106th congress for John Dingell House for November for Gramm Leach Bliley.
The fault lies as much with congress as with Lehman, et al. Congress failed, time and again, to pass legislation leading to adequate regulation of both private sector enterprises and government sponsored enterprises (such as Fannie Mae).
Executives at Lehman, AIG, et al acted according to their nature, and it has yet to be shown that they infringed the law.
Certain members of congress failed, time after time, to serve the public interest, because they knew the public was too lazy to do anything. You will learn about those members if you use the internet.
For some important commentary, go to republicans.oversight.house.gov
Call your representatives.