I got a call to do an interview on a hometown radio show yesterday – WJR in Southeastern Michigan. They were wondering, as every American taxpayer has to be right about now, just what AIG executives were thinking when they paid $440,000 for a company junket to a luxury Orange County hotel – one week AFTER taxpayers bailed them out to the tune of $85 billion. Worse yet, the news broke the same day the company asked for another $38 billion government loan. (Because what are we going to do, let them fail after we’ve given them $85 billion and own 80% of the company?)
"Situated high on a bluff overlooking the majestic Pacific Ocean, stands a landmark resort of legendary proportions." The St. Regis Monarch Bay offers a surf butlers, Antioxidant Wine Therapy Facials and a Presidential Suite with Picasso on the walls. Every touch of luxury – including a “Well of Desires” – a company on the brink of collapse could have the gall to ask for.
Spending included $23,000 at the spa (where wine treatments seem to be the onsite specialty), $147,000 for food and several $3,200 nights in the Presidential Suite. (Here’s the bill.) AIG executives said it wasn’t a problem because top corporate executives weren’t even there. In fact, the trip was for people in the company’s life insurance arm – which was the reason the company needed this week’s $38 billion shot in the arm.
Nevertheless, this kind of trip is “standard practice,” said CEO Edward Liddy – the guy the government hired to right the ship for taxpayers. Can anyone with an ounce of sense think this kind of reckless spending is going to get the financial industry back on its feet?
Better yet, after the news broke and Congress berated company executives, they decided to go ahead with yet another luxury retreat planned at a California Ritz-Carlton. Only overwhelming pressure from of the public, press and politicians forced the company to reconsider it’s profligate spending. All such trips have finally been cancelled.
What were they thinking? As Bloomberg reports:
AIG considered buying advertisements to explain its position, only to be told by its public-relations consultant, George Sard, that it would be “a really bad idea.”
“To spend the taxpayer’s money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,” Sard wrote in an e-mail yesterday to Ashooh. Sard, chief executive officer of New York-based Sard Verbinnen & Co., said the message was a private e-mail mistakenly sent to Bloomberg and wasn’t intended to be a public statement.
They needed to pay a PR hack (again with my money) to tell them to stop digging the hole deeper?
This kind of complete disregard for the repeated taxpayer bailouts of corporate America in the last few weeks is why Congress has to insist on the highest level of oversight of any company that gets a piece of any federal funds. No junkets on the taxpayer dime has to be number one on the list.