AIG Executives Blow $440,000 After Getting Bailout

[Rowdy]

AIG Executives Blow $440,000 After Getting Bailout

If you'd just gotten a government bailout, you might be tempted to hold a retreat at a nice California hotel -- and that's exactly what American International Group (AIG: 3.51, -0.36, -9.30%) executives did.

The committee on Oversight and Government Reform held a hearing on Tuesday at 10:00 a.m. Eastern time. to address and examine downfall of AIG, the world’s largest insurance company. The committee planned to discuss the financial excesses and regulatory mistakes that led to AIG’s government bailout.

One of the items discussed was AIG’s expenditure of $440,000 for a corporate retreat at the St. Regis Monarch Beach resort in Los Angeles, Calif. These funds were spent on Sept. 22, a week after the Federal Reserve extended an $85 billion emergency loan to AIG to keep it from going bankrupt due to insurance liabilities.

According to the receipt from the St. Regis, the eight-day company retreat was a lavish one -- $139,000 was spent on hotel rooms, while even more money -- $147,301 -- was spent on banquets. Another $23,380 was spent on undisclosed spa treatments and another $6,939 was spent on golf. A full $9,980 was spent on room service and food and cocktails at the hotel lounge.

The St. Regis Monarch Beach resort is described on its Web site as “a landmark resort of legendary proportions.”

Legendary, indeed.

[Rowdy]

Oops!

Here's link...

http://www.foxbusiness.com/story/markets/industries/finance/aig-executives-blow--getting-bailout/

[Heisenberg]

Good lord. This is why throwing money at it isn't going to work.

[trickblue]

Good lord. This is why throwing money at it isn't going to work.

This is why the bailout wasn't a good idea...

The only people in this whole ordeal who is altering their lifestyle is the American taxpayer... and we didn't have a say in the matter...

These executives should be terminated immediately... with extreme prejudice...

[Maikeru-sama]

My mother and sister called me on the phone today and said they had heard that one of the CEOs testifying before Congrees said that he was at some fitness club and a former employee of his company came up to him and told him he should be in jail and punched his lights out.

She said one CEO said that people didn't understand that he had lost money too, that he is only worth 350 million now.

Amazing...

[ABQCOWBOY]

OK, I guess it's back out on the ledge I go......

[BrAinPaiNt]

My mother and sister called me on the phone today and said they had heard that one of the CEOs testifying before Congrees said that he was at some fitness club and a former employee of his company came up to him and told him he should be in jail and punched his lights out.

She said one CEO said that people didn't understand that he had lost money too, that he is only worth 350 million now.

Amazing...

There is a thread here about it...

http://cowboyszone.com/forums/showthread.php?t=131185

[theogt]

Oh, no. People played golf!

[BrAinPaiNt]

Oh, no. People played golf!

You bail the people out, they go our right after that and send close to half a million dollars at a resort and all you can say is oh no they played golf?

Seriously, that is all you can say?

[theogt]

You bail the people out, they go our right after that and send close to half a million dollars at a resort and all you can say is oh no they played golf?

Seriously, that is all you can say?Sorry, this populist malarkey tickles my funny bone.

[BrAinPaiNt]

Sorry, this populist malarkey tickles my funny bone.

Why do you say that.

Seriously.

If I found myself in a pickle financially and someone decided to help me out by giving me X amount of money to get me back on my feet, and then I went out and spent a butt load of money going to a hotel, spending money on golf, spas and room service...don't you expect that the people that gave me the money would be a little ticked off about my wasting it?

If you gave me that money would you not have an issue with my actions afterwards?

Why would these guys go and spend money like that when they found themselves in a financial crisis and someone just bailed them out of it.

One would think they would reassess their staff and workers, start formulating a plan to help change their company for the better.

Is that really such a silly thing and something to laugh about.

Seriously I don't get you in this situation.

[theogt]

Why do you say that.

Seriously.

If I found myself in a pickle financially and someone decided to help me out by giving me X amount of money to get me back on my feet, and then I went out and spent a butt load of money going to a hotel, spending money on golf, spas and room service...don't you expect that the people that gave me the money would be a little ticked off about my wasting it?

If you gave me that money would you not have an issue with my actions afterwards?

Why would these guys go and spend money like that when they found themselves in a financial crisis and someone just bailed them out of it.

One would think they would reassess their staff and workers, start formulating a plan to help change their company for the better.

Is that really such a silly thing and something to laugh about.

Seriously I don't get you in this situation.$440,000 for a major corporation isn't really much money. It's not even a blip on their radar screen. I don't know why they had the conference and I don't know how many people were there, but as far as those things usually go, it doesn't sound unreasonable. It's funny to me that anyone would even give a damn.

[BrAinPaiNt]

$440,000 for a major corporation isn't really much money. It's not even a blip on their radar screen. I don't know why they had the conference and I don't know how many people were there, but as far as those things usually go, it doesn't sound unreasonable. It's funny to me that anyone would even give a damn.

Maybe because for many here $440k is a HUGE amount of money. Maybe it is not even the idea of the amount but the attitude, arrogance and seemingly idiotic waste of money to do that when you consider they were the ones that were asking for a bail out in the first place so apparently they could not manage their money well enough to correct their own problems.

It's funny to me that someone would not give a damn about it and I say that without sarcasm.

I just don't get it. A company that just asked for money and wasting a portion of it.

[Danny White]

Liberal... conservative... who cares? If this doesn't offend your sensibilities, then I'd suggest you didn't have much sensibility to begin with.

[theogt]

Liberal... conservative... who cares? If this doesn't offend your sensibilities, then I'd suggest you didn't have much sensibility to begin with.Guilty as charged.

[Kangaroo]

This is why the bailout wasn't a good idea...

The only people in this whole ordeal who is altering their lifestyle is the American taxpayer... and we didn't have a say in the matter...

These executives should be terminated immediately... with extreme prejudice...

I still say we need to file RICO charges against these guys

[MetalHead]

$440,000 for a major corporation isn't really much money. It's not even a blip on their radar screen. I don't know why they had the conference and I don't know how many people were there, but as far as those things usually go, it doesn't sound unreasonable. It's funny to me that anyone would even give a damn.

Completely and absolutely off mark,again.
The government just bailed out a company,and they continue to do the very same things that led them to the brink of bankruptcy.
Zero indictments,zero prosecutions,zero time in jail.
What is needed here is the indictments and prosecution and the seizure of assets of those who made it out a company they bankrupted with hundreds of millions of dollars.
Then this thing will get corrected.
What's going on in Washington is a travesty.
The hearings in congress involving Lehman Bros. and AIG are a national disgrace.
Some executives ought to walk out of there in handcuffs.
Justice was swift with Enron,and they were cooking the books at the tune of 5 billion dollars.
Peanuts compared to what we now have in our hands.

[JBond]

Maybe because for many here $440k is a HUGE amount of money. Maybe it is not even the idea of the amount but the attitude, arrogance and seemingly idiotic waste of money to do that when you consider they were the ones that were asking for a bail out in the first place so apparently they could not manage their money well enough to correct their own problems.

It's funny to me that someone would not give a damn about it and I say that without sarcasm.

I just don't get it. A company that just asked for money and wasting a portion of it.

You hit the nail on the head. Arrogance. I can have a little pity in my evil conservative heart for stupidity, but arrogance on this level really pisses me off. I am surprised people from either political background would defend an undefensible act. It must be arrogance, or they work for AIG and had a real nice weekend.

[Rack Bauer]

Good lord. This is why throwing money at it isn't going to work.

:hammer:


We rushed that thing big time.


It would be nice if our public servants (aka Congress) would actually do their jobs and listen to the people.

[BlueStar22]

Completely and absolutely off mark,again.
The government just bailed out a company,and they continue to do the very same things that led them to the brink of bankruptcy.
Zero indictments,zero prosecutions,zero time in jail.
What is needed here is the indictments and prosecution and the seizure of assets of those who made it out a company they bankrupted with hundreds of millions of dollars.
Then this thing will get corrected.
What's going on in Washington is a travesty.
The hearings in congress involving Lehman Bros. and AIG are a national disgrace.
Some executives ought to walk out of there in handcuffs.
Justice was swift with Enron,and they were cooking the books at the tune of 5 billion dollars.
Peanuts compared to what we now have in our hands.they'd just disapppear like the Enron CEO. He's dead? Yeah right. Died right before he was supposed to go to jail. Just a grassy knoll.

[JBond]

:hammer:


We rushed that thing big time.


It would be nice if our public servants (aka Congress) would actually do their jobs and listen to the people.

We must take the gigantic money out of politics. I know Obama will not help that cause as his $450,000,000 take will show.

Well, I guess that's the new number. Half a Billion dollars will buy you an election.

[Maikeru-sama]

Completely and absolutely off mark,again.
The government just bailed out a company,and they continue to do the very same things that led them to the brink of bankruptcy.
Zero indictments,zero prosecutions,zero time in jail.
What is needed here is the indictments and prosecution and the seizure of assets of those who made it out a company they bankrupted with hundreds of millions of dollars.
Then this thing will get corrected.
What's going on in Washington is a travesty.
The hearings in congress involving Lehman Bros. and AIG are a national disgrace.
Some executives ought to walk out of there in handcuffs.
Justice was swift with Enron,and they were cooking the books at the tune of 5 billion dollars.
Peanuts compared to what we now have in our hands.

:hammer:

Im totally convinced that Theo just likes to play the contrarian, there is no way that he believes this is nothing but a couple of guys "playing golf".

[arglebargle]

Sorry, this populist malarkey tickles my funny bone.


Contrarian or not, weren't you predicting this would be but a small blip a few months ago?


Care to explain some more Big Business wizdom? :rolleyes:

[jman]

:hammer:


We rushed that thing big time.


It would be nice if our public servants (aka Congress) would actually do their jobs and listen to the people.

That's the problem. Congress heard us loud and clear and decided they knew better anyway.

[WoodysGirl]

Execs' posh retreat after bailout angers lawmakers

By ANDREW TAYLOR, Associated Press Writer
Tue Oct 7, 10:57 PM ET



WASHINGTON - Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

ADVERTISEMENT

AIG sent its executives to the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.

The retreat didn't include anyone from the financial products division that nearly drove AIG under, but lawmakers still were enraged over thousands of dollars spent on outing for executives of AIG's main U.S. life insurance subsidiary.

"Average Americans are suffering economically. They're losing their jobs, their homes and their health insurance," the committee's chairman, Rep. Henry Waxman, D-Calif., scolded the company during a lengthy opening statement at a hearing Tuesday. "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."

Former AIG CEO Robert Willumstad, who lost his job a day after the Federal Reserve put up the $85 billion on Sept. 16, said he was not familiar with the conference and would not have gone along with it.

"It seems very inappropriate," Willumstad said in response to questioning from Rep. Elijah Cummings, D-Md.

"Those executives should be fired," Democratic presidential candidate Sen. Barack Obama said at a debate with Sen. John McCain on Tuesday, referring to the retreat participants. Obama also said AIG should give the Treasury $440,000 to cover the costs of the retreat.

But Eric Dinallo, superintendent of the New York State Insurance Department, said he could see the value of such a retreat under the circumstances.

"Having been at large global companies and knowing what condition AIG was in ... the absolute worst thing that could have happened" would have been for employees and underwriters in its life insurance subsidiary to flee the company.

"I do agree there is some profligate spending there, but the concept of bringing all the major employees together ... to ensure that the $85 billion could be as greatly as possible paid back would have been not a crazy corporate decision," Dinallo told the House committee.

The hearing disclosed that AIG executives hid the full range of its risky financial products from auditors as losses mounted, according to documents released by the committee, which is examining the chain of events that forced the government to bail out the conglomerate.

The panel sharply criticized AIG's former top executives, who cast blame on each other for the company's financial woes.

"You have cost my constituents and the taxpayers of this country $85 billion and run into the ground one of the most respected insurance companies in the history of our country," said Rep. Carolyn Maloney, D-N.Y. "You were just gambling billions, possibly trillions of dollars."

AIG, crippled by huge losses linked to mortgage defaults, was forced last month to accept the $85 billion government loan that gives the U.S. the right to an 80 percent stake in the company.

Waxman unveiled documents showing AIG executives hid the full extent of the firm's risky financial products from auditors, both outside and inside the firm, as losses mounted.

For instance, federal regulators at the Office of Thrift Supervision warned in March that "corporate oversight of AIG Financial Products ... lack critical elements of independence." At the same time, PricewaterhouseCoopers confidentially warned the company that the "root cause" of its mounting problems was denying internal overseers in charge of limiting AIG's exposure access to what was going on in its highly leveraged financial products branch.

Waxman also released testimony from former AIG auditor Joseph St. Denis, who resigned after being blocked from giving his input on how the firm estimated its liabilities.

Three former AIG executives were summoned to appear before the hearing. One of them, Maurice "Hank" Greenberg — who ran AIG for 38 years until 2005 — canceled his appearance citing illness but submitted prepared testimony. In it, he blamed the company's financial woes on his successors, former CEOs Martin Sullivan and Willumstad.

"When I left AIG, the company operated in 130 countries and employed approximately 92,000 people," Greenberg said. "Today, the company we built up over almost four decades has been virtually destroyed."

Sullivan and Willumstad, in turn, cast much of the blame on accounting rules that forced AIG to take tens of billions of dollars in losses stemming from exposure to toxic mortgage-related securities.

Lawmakers also upbraided Sullivan, who ran the firm from 2005 until June of this year, for urging AIG's board of directors to waive pay guidelines to win a $5 million bonus for 2007 — even as the company lost $5 billion in the 4th quarter of that year. Sullivan countered that he was mainly concerned with helping other senior executives.

http://news.yahoo.com/s/ap/20081008/ap_on_go_co/meltdown_aig;_ylt=AsiqfKVN9OUtOt3DYr3TqMlh24cA

[REDVOLUTION]

Let's have a retreat so we can relax and ideate and clear our minds so we can get to the bottom of this. To figure out where we went wrong. Let's really figure a way to cut excess spending and get back on track :rolleyes:


Pathetic.

[BrAinPaiNt]

Let's have a retreat so we can relax and ideate and clear our minds so we can get to the bottom of this. To figure out where we went wrong. Let's really figure a way to cut excess spending and get back on track :rolleyes:


Pathetic.

We could put theogt in charge of the finances for our get away. He would not feel bad about spending the money for us.:laugh2:

[WoodysGirl]

I understand the concept of a retreat having worked in several corp environments where that was considered a good way to brainstorm for the upcoming project. Usually the retreat would be along the lines of going offsite to a park, a restaurant banquet room, hotel conference room. Nothing major.

Never would I think going on a six-figure retreat after asking for bailout money is a good idea. A $23k spa day? You can get one local for $300. Nobody's crusty feet and bad back is worth $23k.

[theogt]

Contrarian or not, weren't you predicting this would be but a small blip a few months ago?


Care to explain some more Big Business wizdom? :rolleyes:Uh...no. I said the financial crisis was bad and would likely get worse.

However, I said the OVERALL ECONOMIC slowdown would be historically soft. Turns out, I've been right. That is, unless the financial crisis continues to worsen and spills over to "main street."

If you'd like for me to explain the difference between "financial markets" and the "overall economy" I can, because it appears you're unaware of a difference.

[BrAinPaiNt]

Uh...no. I said the financial crisis was bad and would likely get worse.

However, I said the OVERALL ECONOMIC slowdown would be historically soft. Turns out, I've been right. That is, unless the financial crisis continues to worsen and spills over to "main street."

If you'd like for me to explain the difference between "financial markets" and the "overall economy" I can, because it appears you're unaware of a difference.

Although we have seen widespread problems across the world in other countries. I think I heard a blurb this morning that although wall street ended another day, yesterday in a downward turn and large points drop...that this morning it was starting to go up again.

Not sure if I heard the blurb wrong or not as it was right before I was leaving for work and had other things on my mind.

[theogt]

Although we have seen widespread problems across the world in other countries. I think I heard a blurb this morning that although wall street ended another day, yesterday in a downward turn and large points drop...that this morning it was starting to go up again.

Not sure if I heard the blurb wrong or not as it was right before I was leaving for work and had other things on my mind.Markets are holding steady this morning. Stocks are pretty cheap right now -- great buying opportunity. They may turn down to ~8500 before hitting the long stride up, but in 12 months, that's going to be a helluva return.

[Vintage]

Hope it was good golf. Wish I could go golfing right now.

Damn.


And 440K isn't that much money for a company event. The company my dad works for has a similar retreat type thing every year, and it costs 2-3 million. And then they have another one in winter, albeit smaller.

They probably did some work related stuff too.

Companies do this as a way to boost morale too, which affects how the employees work, etc.

Not necessarily a bad idea.

[trickblue]

Hope it was good golf. Wish I could go golfing right now.

Damn.


And 440K isn't that much money for a company event. The company my dad works for has a similar retreat type thing every year, and it costs 2-3 million. And then they have another one in winter, albeit smaller.

They probably did some work related stuff too.

Companies do this as a way to boost morale too, which affects how the employees work, etc.

Not necessarily a bad idea.

I think many of us realize it's small in scope given the corporate world, but doing this right after a 700 billion bailout shows their lack of judgment and sensitivity to the American people...

A half a million dollars on massages, golf and room service is not going to win them any friends regardless of any work they may have gotten done...

[BrAinPaiNt]

I think many of us realize it's small in scope given the corporate world, but doing this right after a 700 billion bailout shows their lack of judgment and sensitivity to the American people...

A half a million dollars on massages, golf and room service is not going to win them any friends regardless of any work they may have gotten done...

Yep and the last thing these companies need after this whole bail out mess is bad press. Then again, I doubt they care about it since they got what they wanted and the CEOs will still be raking in the bucks.

[Vintage]

If its a yearly event, why not do it?

It signals that the company is back on track, going to recover, boosts employee morale, give the (impression, at least) that the company is doing well... which gives confidence to its employees, investors, users, etc.

[DaBoys4Life]

I don't see how 440,000 dollar can be considered blown money when the bail was worth 85 billion dollars.....

[WoodysGirl]

If its a yearly event, why not do it?

It signals that the company is back on track, going to recover, boosts employee morale, give the (impression, at least) that the company is doing well... which gives confidence to its employees, investors, users, etc.You don't do it after having to ask the government for $85 billion.

And if you do do it, you do it on a much, much smaller scale.

[Vintage]

Maybe it was on a smaller scale....

[trickblue]

If its a yearly event, why not do it?

It signals that the company is back on track, going to recover, boosts employee morale, give the (impression, at least) that the company is doing well... which gives confidence to its employees, investors, users, etc.

Yep... business as usual... thanks America... we'll be back for 5 trillion in 10 years...

I think they need to show they can change their business practices. Image is important and they have damaged theirs by seeming flippant...

Remember the press motto... It's not whether or not improprieties occurred, but rather the APPEARANCE of improprieties...

[WoodysGirl]

Maybe it was on a smaller scale....Then they should've thought even smaller.

Yep... business as usual... thanks America... we'll be back for 5 trillion in 10 years...

I think they need to show they can change their business practices. Image is important and they have damaged theirs by seeming flippant...

Remember the press motto... It's not whether or not improprieties occurred, but rather the APPEARANCE of improprieties...Absolutely.

:hammer:

[ninja]

It also amazes me that these expensive places exist. Who keeps these hotels, spas, golf courses in business? Not me. The most expensive hotel room I paid for in my lifetime was probably $125/night. I have neve been to a spa nor has my wife. I hate golf with a passion and would not play golf unless I got paid well for it. My most expensive dinner was probably $75 for my wife and I on our anniversary.

These grossly expensive businesses(hotels, spas, etc) shouldn't even exist if enough people had brains and humbleness.

I know I am cheap. I like to save rather than spend.

[BrAinPaiNt]

It also amazes me that these expensive places exist. Who keeps these hotels, spas, golf courses in business? Not me. The most expensive hotel room I paid for in my lifetime was probably $125/night. I have neve been to a spa nor has my wife. I hate golf with a passion and would not play golf unless I got paid well for it. My most expensive dinner was probably $75 for my wife and I on our anniversary.

These grossly expensive businesses(hotels, spas, etc) shouldn't even exist if enough people had brains and humbleness.

I know I am cheap. I like to save rather than spend.

Ninjas are sneaky like that. :p: ;)

[theogt]

Here's some clarification.

http://online.wsj.com/public/resources/documents/20081008-AIGletter-liddy.pdf

This was not an "executive retreat." Apparently there were over 100 people there, and only 10 were AIG employees, none of which were executives. It was a retreat for "independent insurance agents."

[Maikeru-sama]

If its a yearly event, why not do it?
It signals that the company is back on track, going to recover, boosts employee morale, give the (impression, at least) that the company is doing well... which gives confidence to its employees, investors, users, etc.

CTX Mortgate, Centex Homes A+ lending arm had a yearly trip they called "Production Trips". This tradition has been around since probably the company was found and Top executive, top Loan Officers and Employees of the Month (we called them Best Cards Winners) got to either go to Las Vegas or a Cruise.

2 years ago, about 2 weeks before they were suppose to go to Las Vegas, they cancelled the trip because the company was doing so horrible. One of my co-workers was Best Employee of the year and had spent a whole bunch of money on clothes and stuff for Las Vegas and was PO'ed about it.

So just because it is tradition doesn't mean it is not a good idea to get rid of it, if your company is not doing well financially.

[ABQCOWBOY]

And today, the 700 Czar gives AIG another 37.8 Billion dollars. Seriously, this is BS.