AIG's Got the Public's Money to Burn

The defunct <a href="" target="_blank">$10,000 billThe insurance company American International Group (AIG), which "vowed to temper spending after hosting a conference at a California resort amid a federal bailout," belatedly canceled "a similar event planned for next week at a $400-a-night hotel." The U.S. government loaned AIG $85 billion in September and the Federal Reserve Bank of New York just loaned the company another $37.8 billion, to "replenish liquidity." Members of Congress harshly criticized AIG's earlier luxury conference, which cost $440,000. Before AIG canceled its more recent event, it considered buying ads to explain that such conferences are necessary to "motivate and educate" independent agents selling AIG coverage. But AIG's public relations consultant, George Sard, warned against the move. Sard, who heads the PR firm Sard Verbinnen & Co., emailed that "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." However, Sard mistakenly sent his advice to a Bloomberg reporter.


The $440,000 that AIG spent at partying at the St. Regis notwithstanding, the same company is planing a 3 day shindig for 150 insurance brokers at the plush Ritz-Carlton Resort in Half Moon Bay, California next week. Rooms cost $399 to $1,000 a night. AIG spokesperson Joe Norton told the L.A.Times there are no plans to cancel the event, despite the government bailout.

AIG is not alone in continuing to engage in financial excess in these desperate times. Wachovia, yet another broke institution (albeit one not yet bailed out by the taxpayers) is preparing to send 75 of its executives, plus spouses and "significant others," on a Greek Island cruise.,0,6383400.column
David Lazarus, Los Angeles Times Business Section, October 9, 2008

Anne Landman