AIG's US$440,000 resort stay
Congress grills bosses over money spent soon after firm was rescued by US$85b govt bailout
After the US government bailout, AIG executives held a retreat at the luxury St Regis resort in Monarch Beach, California. They ran up a huge spa bill, among other expenses. -- PHOTO: ST REGIS
WASHINGTON: On a Tuesday, the company was saved from total collapse by a government loan of US$85 billion (S$124 billion).
By that weekend, the drama had obviously been left behind as AIG executives spent more than US$440,000 of company money on a week-long getaway at an exclusive California beach resort.
GOVERNMENT SHOULD DEMAND A REFUND
'The Treasury should demand that money back, and those executives should be fired.'
- Democratic presidential nominee Barack Obama, commenting on the AIG junket during his debate with Republican John McCain
... more
The tab, the US House Committee on Oversight and Government Reform was told, included US$23,000 at the hotel spa and another US$1,400 at the salon.
'They were getting their manicures, their facials, their pedicures and their massages while the American people were footing the bill,' said Democratic congressman Elijah Cummings.
The Federal Reserve stepped in to save American International Group (AIG) from imminent collapse on Sept 16 with a loan that gave the US government an 80 per cent stake in the insurance giant.
'Less than one week later, AIG held a week-long retreat for company executives at the exclusive St Regis resort in Monarch Beach, California,' Democratic congressman Henry Waxman told the House committee on Tuesday.
In what the Financial Times called 'a moment of drama usually reserved for US court rooms', Mr Waxman, the Democratic chairman of the House of Representatives' chief investigative committee, flashed images of a luxury hotel on television screens.
Mr Cummings, a Democrat from Baltimore, one of the poorest cities in the US, pointed out that the rooms cost more per night than some of his constituents faced in monthly mortgage payments - for houses they were now being thrown out of. 'The American people are paying for that. And they are angry,' he said.
Invoices showed that room charges were close to US$200,000 for rooms which cost from US$425 to US$1,200 per night. 'Average Americans are suffering economically. They are losing their jobs, their homes,' Mr Waxman said. 'We will ask whether any of this makes sense.'
Mr Cummings also pointed out that AIG spent US$7,000 in green fees at the golf course and US$10,000 on bar tabs as he turned his questions on former AIG chief executive officers Robert Willumstad and Martin Sullivan.
'I do find it interesting that Mr Willumstad knows nothing about it, but this came just a week after you left. Did you know that, Mr Willumstad?' he asked.
Mr Willumstad answered: 'I heard you say that, but I was totally unaware that there was any plan for any conference.'
'And, Mr Sullivan, I'm curious, what were your views on this?' Mr Cummings asked.
'You know, obviously, I left the company many months earlier prior to Mr Willumstad. But if I'd have seen bills like that, I can assure you, as the CEO, I would have been asking questions,' Mr Sullivan said.
Mr Waxman noted that the longtime former CEO of AIG, Mr Maurice 'Hank' Greenberg, 'told the committee he is too ill to appear today to answer questions'.
'Mr Greenberg blames Mr Sullivan and Mr Willumstad for the downfall of AIG,' said Mr Waxman. 'Many others think it is Mr Greenberg who sowed the seeds that led to AIG's failure.'
President George W. Bush's chief spokesman expressed outrage yesterday at the revelation. 'I understand why the American people would be outraged. I am. It is pretty despicable,' Ms Dana Perino told reporters.
AIG later clarified in a statement that the event, which had been scheduled last year, was 'not an executive retreat'.
It added that only 10 AIG employees attended what had been a conference for management to meet the insurer's leading product distributors.
AGENCE FRANCE-PRESSE, REUTERS
Congress grills bosses over money spent soon after firm was rescued by US$85b govt bailout
After the US government bailout, AIG executives held a retreat at the luxury St Regis resort in Monarch Beach, California. They ran up a huge spa bill, among other expenses. -- PHOTO: ST REGIS
WASHINGTON: On a Tuesday, the company was saved from total collapse by a government loan of US$85 billion (S$124 billion).
By that weekend, the drama had obviously been left behind as AIG executives spent more than US$440,000 of company money on a week-long getaway at an exclusive California beach resort.
GOVERNMENT SHOULD DEMAND A REFUND
'The Treasury should demand that money back, and those executives should be fired.'
- Democratic presidential nominee Barack Obama, commenting on the AIG junket during his debate with Republican John McCain
... more
The tab, the US House Committee on Oversight and Government Reform was told, included US$23,000 at the hotel spa and another US$1,400 at the salon.
'They were getting their manicures, their facials, their pedicures and their massages while the American people were footing the bill,' said Democratic congressman Elijah Cummings.
The Federal Reserve stepped in to save American International Group (AIG) from imminent collapse on Sept 16 with a loan that gave the US government an 80 per cent stake in the insurance giant.
'Less than one week later, AIG held a week-long retreat for company executives at the exclusive St Regis resort in Monarch Beach, California,' Democratic congressman Henry Waxman told the House committee on Tuesday.
In what the Financial Times called 'a moment of drama usually reserved for US court rooms', Mr Waxman, the Democratic chairman of the House of Representatives' chief investigative committee, flashed images of a luxury hotel on television screens.
Mr Cummings, a Democrat from Baltimore, one of the poorest cities in the US, pointed out that the rooms cost more per night than some of his constituents faced in monthly mortgage payments - for houses they were now being thrown out of. 'The American people are paying for that. And they are angry,' he said.
Invoices showed that room charges were close to US$200,000 for rooms which cost from US$425 to US$1,200 per night. 'Average Americans are suffering economically. They are losing their jobs, their homes,' Mr Waxman said. 'We will ask whether any of this makes sense.'
Mr Cummings also pointed out that AIG spent US$7,000 in green fees at the golf course and US$10,000 on bar tabs as he turned his questions on former AIG chief executive officers Robert Willumstad and Martin Sullivan.
'I do find it interesting that Mr Willumstad knows nothing about it, but this came just a week after you left. Did you know that, Mr Willumstad?' he asked.
Mr Willumstad answered: 'I heard you say that, but I was totally unaware that there was any plan for any conference.'
'And, Mr Sullivan, I'm curious, what were your views on this?' Mr Cummings asked.
'You know, obviously, I left the company many months earlier prior to Mr Willumstad. But if I'd have seen bills like that, I can assure you, as the CEO, I would have been asking questions,' Mr Sullivan said.
Mr Waxman noted that the longtime former CEO of AIG, Mr Maurice 'Hank' Greenberg, 'told the committee he is too ill to appear today to answer questions'.
'Mr Greenberg blames Mr Sullivan and Mr Willumstad for the downfall of AIG,' said Mr Waxman. 'Many others think it is Mr Greenberg who sowed the seeds that led to AIG's failure.'
President George W. Bush's chief spokesman expressed outrage yesterday at the revelation. 'I understand why the American people would be outraged. I am. It is pretty despicable,' Ms Dana Perino told reporters.
AIG later clarified in a statement that the event, which had been scheduled last year, was 'not an executive retreat'.
It added that only 10 AIG employees attended what had been a conference for management to meet the insurer's leading product distributors.
AGENCE FRANCE-PRESSE, REUTERS
