AIG executives party again, luxury resort trip comes after additional $40 billion bailout

by Tina Kells | November 11, 2008 at 12:03 pm

1870 views | 12 Recommendations | 11 comments

After asking for an additional $40 billion bailout AIG executives threw a party in a luxury resort outside of Phenoix Arizona, only this time they took great pains to keep the gathering a secret. The AIG logo was nowhere to be seen as top executives from the insurance giant held another luxurious "conference" at the Pointe Hilton Squaw Peak Resort and Spa in Arizona (see Squaw Peak Resort video at the top left of this page to view the resort itself).

The latest show of fiscal irresponsibility by AIG executives has caused an uproar among people and politicians. After the first AIG executive party scandal broke AIG CEO Edward Liddy vowed that the company would stop holding "conferences" at luxury resorts. That promise has clearly been broken leaving many politicians in Washington demanding answers. It also begs the question; what other lies are AIG executives telling?

AIG has been the recipient of the largest taxpayer funded corporate bailout in the history of the world. AIG executives have asked the government for assistance three times in recent months and has received $150 billion in government bailout loans since September 2008. In less than 3 months AIG has had to return to the government coffers to keep the company alive claiming a sum equal to more than 20% of the total $700 billion bailout bill.

While the US economy, and the economy entire world, are stumbling toward what could become the second Great Depression, the actions of AIG executives should be looked at with a very critical eye. Fiscal irresponsibility in the financial and insurance sectors helped lay the foundation for the current global economic crisis. Why are AIG executives being allowed to conduct business as usual when their usual way of doing business has proven to be an abysmal failure?

Even as the company was pleading the federal government for another $40 billion dollars in loans, AIG sent top executives to a secret gathering at a luxury resort in Phoenix last week.

Brian Ross investigates the insurance giant's "seminar" at a posh resort.

Reporters for abc15.com (KNXV) caught the AIG executives on hidden cameras poolside and leaving the spa at the Pointe Hilton Squaw Peak Resort, despite apparent efforts by the company to disguise its involvement.

"AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property," KNXV reported.

See the full KNXV AIG Executive Party Again report

A hotel employee told KNXV reporter Josh Bernstein, "We can't even say the word [AIG]."

A company spokesperson, Nick Ashooh, confirmed AIG instructed the hotel to make sure there were no AIG signs or mention of the company by staff.

"We're trying to avoid confrontation, keep our profile low," said Ashooh. "Some of our employees have been harassed."

"What do they have to hide," asked Congressman Elijah Cummings (D-MD) who said he had been promised by AIG CEO Edward Liddy that the company would stop such "junkets."

At least one voice in Washington is calling for AIG CEO Edward Liddy to resign. U.S. Congressman Elijah Cummings is calling for Liddy's immediate resignation of and has eluded that others should also be held accountable. Congressman Cummings has publicly stated his disgust with this latest scandalous behaviour by AIG executives.

After an ABC15 undercover investigation showed AIG executives holding poolside meetings and dining at an upscale restaurant in Phoenix, U.S. Congressman Elijah Cummings wants AIG's CEO Edward Liddy to resign.

"A person who's drowning doesn't jump up and start partying," Cummings said. "We've made it clear to them we do not want one dime being spent on these junkets."

The conference held last week at the Pointe Hilton Squaw Peak Resort in Phoenix cost AIG approximately $343,000.

An AIG spokesperson said they expect sponsors to reimburse the company for about 90 percent of those costs.

Nearly 150 independent financial planners attended the conference, as did several AIG executives including Larry Roth, President & CEO, AIG Advisor Group; Art Tambaro, President & CEO, Royal Alliance Associates; Mark Schlafly, President & CEO, FSC Securities; Gary Bender, Senior Vice President, Investment Advisory Services; Bruce Levitus, Senior Vice President, Investment Advisory Services; and Stuart Rogers, Senior Vice President.

AIG made significant efforts to keep the conference in Phoenix a secret, instructing the hotel not to post any signs with AIG's logo.

"Clearly they're trying to hide things," said Tom Jenney, Arizona director of Americans for Prosperity. "What the people at AIG need to realize is that they are now government employees adn we taxpayers do not like to see our government employees going on extravagant junkets."

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Terri Potratz

at 14:13 on November 11th, 2008

Unreal...

corbinse

at 18:05 on November 11th, 2008

here we go again fleecing of America, I know why my pocket is always empty. Thank goodness gas prices have gone down. (but I know that’s temporary!!!) wait 6 months taxes on that will increase .. will be looking at 6 a gal. and who knows what else. Just to cover for all of these bailouts ( or should we say parties ) this needs to be publicized in a big way

Pythiian1

at 19:08 on November 11th, 2008

Good editorial. E. Liddy tried to rationalize that AIG was "merely entertaining independent traders, and not AIG executives... the cost was minimal." I think sometime in early October, amidst the concerns over the price of the bailout, AIG brought its executives to a hunting party in the UK.

Cris Cohen (not verified)

at 06:13 on November 12th, 2008

They must have a brilliant marketing team. I hear for Thanksgiving they are planning an event where they burn wads of cash in front of a homeless shelter.

propaganda hater (not verified)

at 08:05 on November 12th, 2008

This is ridiculous. How in the world is AIG to pay the goverment back if they cannot function as usual. Hmm- they held a meeting to further educate top brokers on new and existing products. where exactly would the press like these meetings held- maybe the local Mickey D's?

hater of propagand hater (not verified)

at 09:12 on November 12th, 2008

You can't be serious? It's the "function as usual" that got them into the predicament they're in now. "Business as usual" has to change....unless you would like your family to owe an additional $40k on top of the $40k that each US family already owes due to the country's debt.

Or are you an AIG executive? McD's is an extreme...so is a bill for ~$350K for a company that can't afford it as is.

joe plumber (not verified)

at 09:43 on November 12th, 2008

I guess the SS can do whatever they want since they are the ones who count. After all the friends of the bush don't need any rules when they make 'em.

Cynical Synapse (not verified)

at 17:29 on November 12th, 2008

Unbelievable that AIG would show up asking for more bailout money, fresh from the latest resort conference. But the banks salivating at the bailout trough that are still paying dividends and bonuses also need to be in the spotlight. Excuse me, but the simple answer is to <a href=http://cynicalsynapse.wordpress.com/2008/11/12/just-say-no-to-aig-and-undeserved-bonuses/>just say no</a>!

For those interested in more details about the bailout and what's going on, check out <a href=http:bailoutsleuth.com>Bailout Sleuth</a>.

Ravi Dixit

at 00:45 on November 13th, 2008

Great piece of work Tina!!

DLiberty (not verified)

at 05:30 on November 13th, 2008

Propaganda is right. It was a 340+ employee department that got AIG into this mess. All of the other AIG units need to go on with business as usual because they are the core business at AIG. If you put the company in a cave, it will not succeed and go under costing YOU ALL lots of money. The money that AIG uses from the government isn't touched. It is used to post collateral on the bad mortgage assets. If you think they are using that money for retreats, you are not informed and should take some finance classes before you bash.

maverick_mathaeus (not verified)

at 20:34 on December 8th, 2008

Un-reigned capitalism is a canibal. The rich eat the middle class and the poor struggle not to starve.

I think When the bailouts were approved cutbacks were expected and lending was expected to continue.

Current lending activity seems improper seeing as how the banks are being bailed out with tax money. Considering the fact 90% of the money banks make come from median or below average income families (the ones with marks on thier credit) a general and across the board cut back will not help bank profits. Nor will it boost the economy, I think the Government planned on banks continuation to lend as a step in improving economy.

I think Minimum wage needs raised and executive pay needs capped to cover the raises. This would prevent inflation. Where as in general minimum wage is raised the company does not want to cut back and so raises the cost of a candy bar from $0.49 to $1.19 to cover raises.

And on the auto bailout. if banks dont lend in a year the auto makers will still be on verge of bankrupt. Any and all bail out should be accompanied by strict regulations and forced cut backs on frivilous things.

At least P2P lending still seems active. Sad when the little guy helps the little guy.