American International Group Inc. (AIG), the huge insurer—too big to fail!— that is now majority-owned by the U.S. after a 2008 bailout of $85 billion, has resumed its arrogant, irresponsible habit of living like sultans on the money of taxpayers, many of whom are getting kicked out of their homes and who can’t find jobs.
Back in October 0f 2008, the House Oversight Committee nearly had a collective stroke when it discovered that, just one week after the federal government bailed out AIG because it was too vital a part of the shaky world financial markets to let go belly-up as it richly deserved, company executives went on a wildly-expensive retreat to a luxury resort. The executives “spent nearly $500,000 on manicures, facials, pedicures, and massages,” among other things. Rep. Elijah Cummings (D-MD) was incredulous, and he wasn’t alone:
“Have you heard of anything more outrageous?… Let me describe for some of you the charges that the shareholders, taxpayers, had to pay. AIG spent $200,000 dollars for hotel rooms. Almost $150,000 for catered banquets. AIG spent $23,000 at the hotel spa and another $1,400 at the salon. They were getting manicures, facials, pedicures and massages while American people were footing the bill. And they spent another $10,000 dollars for I don’t know what this is, leisure dining. Bars?is hosting an event at a California facility that advertises ,the amenities of an ultra luxury hotel.’”
That was just the beginning. In 2009, AIG paid out billions in “retention bonuses,” causing the Senate and House to threaten legal action. Was AIG sorry? Contrite? Filled with shame? Determined to change? Did they understand that argument that “this is the cost of doing business” doesn’t resonate when you are doing it with the public’s money, having blown your own through bad management, greed, and recklessness?
Oh, no. The company was just laying low until the heat was off. This week, we learn that the company’s American General unit just assembled about 65 people who distribute its products—about the same number as the group that spend nearly a half-million at a similar resort in 2008— for a two-and-a-half-day stay at the Resort at Pelican Hill in Newport Beach, California. Nine AIG managers also went to the resort to make presentations. A spokeman wouldn’t say what the cost of the event was, but it’s fair to assume that at Pelican Hill, 16 dollar muffins would be slumming. As before, the company saw nothing wrong with going first class, indeed, emperor class, all the way.
“It is important for these speakers, as well as the eight field representatives in attendance to spend quality, one-on-one time with our key distribution partners to ensure they understand our offerings,” AIG’s spokeman said, as if we are the ones who are out of touch. “It is standard practice in the financial-services industry to hold such business development, leadership meetings.”
“We are back to the business of being in business and we’re in the marketplace competing,”
Senator Max Baucus (D-Mont) called AIG’s party in 2008 an “insult to taxpayers.” What is the 2011 version, then? An insult to Congress? An insult to the nation? An insult to common sense? An insult to the concepts of fairness, accountability and shared sacrifice?
Yes…all of that, and more.