After getting the U.S. Treasury to cough up another $6.3 billion worth of our money to keep American International Group (NYSE: AIG) going, its executives are getting smarter about how to use our money to pay for their plush retreats. Rather than advertise those junkets, AIG executives are carefully hiding their presence as they enjoy our money. Some might think it's wrong for AIG to do this, but let's not forget that Treasury has already invested $159 billion of our money in 24 banks and $26.6 billion of that could go to paying bankers' bonuses.
What is AIG's latest executive vacation? Its top executives held a secret gathering at a luxury resort in Phoenix -- Pointe Hilton Squaw Peak Resort -- last week. But the AIG executives tried to disguise their involvement. There were no AIG logos or signs anywhere on the property and resort employees were told not to discuss AIG. The retreat cost taxpayers $343,000 -- much of which went to the president of AIG unit Royal Alliance Associates, Art Tambaro, who stayed in a two-story Casita suite and worked out at the spa while others participated in seminars.
AIG still thinks this behavior is fine -- as long as it doesn't get caught. But this is chump change. Don't be too surprised to see the banks that got our bailout money using it to pay themselves multimillion dollar bonuses. There does not seem to be anything or anyone who can stop this blatant waste of hard-earned taxpayer money to keep executives in clover while the rest of the country's economy is frozen by the financial crisis they caused. I may be the only one, but this does not seem right.
Update. I received an e-mail from AIG spokesperson, Peter Tulupman. He forwarded a statement from Ed Liddy, AIG CEO: "Recent news reports have grossly mischaracterized an American International Group seminar for 150 independent financial planners held in Phoenix last week. The financial planners are not AIG employees. In addition, the cost to AIG for this event was minimal. More than 90 percent of the costs were paid either by sponsors or by the independent financial planners themselves."
On October 10, I issued a directive to all AIG employees and subsidiaries to reduce expenses and conserve cash, including canceling all nonessential conferences or meetings, unnecessary travel and excessive overhead. Since then, we have canceled more than 160 events. We conducted a top-to-bottom review of all expenses of the Phoenix meeting in advance and found that it was consistent with my October 10th directive. This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the U.S. taxpayer."
Sounds to me like AIG is going to continue to use our money for its conferences. Why it can't find a less costly way to educate its sales force is beyond me. How about if it puts educational videos on its web site that sales people can watch. I bet that would cost far less than the resorts it's been sending its executives to on our nickel.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns AIG securities











Reader Comments (Page 1 of 2)
11-11-2008 @ 2:20PM
Marc said...
Now who doesn't think that these fine fellows don't deserve bonuses and luxury retreats?
It's just tax dollars, who the heck cares if tax dollars are blown. The inflation explosion is coming anyways, soon the national debt and your retirement along with it will be worth nothing. How else can we back out of this situation?
11-11-2008 @ 1:27PM
Mark said...
Selfish, Vain, Egotistical, Self centered me people. Common crooks. Average people are busting their butts trying to make ends meet and these jerks are having a good ole time partying. We are the stupid one's for letting our so called leaders give them the handout. And the hard working blue collar American is looked down upon for missing a couple of credit card payments. We are in deep trouble.
11-11-2008 @ 1:27PM
Ralph said...
You are not the only one. I never thought bailing them out was/is the answer.
11-11-2008 @ 1:49PM
Hope said...
These sorry ass dumb executives don't get it because of the dumb ass idiot still in the White House until January 20th. We should have let these sorry ass pathetic idiots shut down the company. As for Henry Paulson - he has shown his true colors by making damn sure his buddies on Wall Street get the last laugh at taxpayers' expense. No wonder he wanted the bail out to pass within 72 hrs. These sorry ass bastards created the crap shit ass mess, laughed all the way to their offshore banks with bonuses and golden parachutes but now expect taxpayers to bail their sorry asses out for the crap shit ass mess they created in the 1st place. This inept and incompetent administration doesn't give a shit about Congress, about the laws, about the constitution or the American people so what's a little screw up of more tax dollars ????????????????? We, the people, can't even fire these inept and incompetent people. What a country ??????????
11-11-2008 @ 2:39PM
EYEDOC said...
AGAIN. THEY DIDN'T LEARN THE FIRST TIME. THE SECOND TIME THEY TRIED TO COVER THEIR TRACKS. WHATS WRONG WITH THIS PICTURE FIRE THEM ON-THE-SPOT. NO GOLDEN PARACHUTES.
11-11-2008 @ 2:51PM
RHODA MILLER said...
ANY FUNDS FROM THE FIRST BAILOUT NOT YET TRANSFERRED SHOULD BE STOPPED IMMEDIATELY, AND NOT ANOTHER DIME GIVEN UNTIL THE ENTIRE TOP MANAGEMENT HAS BEEN FIRED WITHOUT SEVERANCE.
11-11-2008 @ 2:59PM
Loretta said...
Hey Congress and All You Washington Flunkies!
Wake up! How long is this garbage going to go on without you, who should be representing the people, monitoring their every move? This is ridiculous! Here we are, hard working taxpayers, trying so very hard to keep control of our houses and our jobs, and companies like AIG are laughing at us while basking in luxury.
You represent us Congress, so do your jobs and stop this insanity.
11-11-2008 @ 3:02PM
EYEDOC said...
HOW CRASS CAN YOU GET. HOW IRRESPONSIBLE.EITHER AIG IS PLAYING THE FEDERAL GOVERNMENT FOR A CHUMP, OR THE FEDERAL GOVERMENT AND AIG IS PLAYING THE TAX PAYER FOR A CHUMP.
11-11-2008 @ 3:06PM
andyg8180 said...
Time to make a s-hit list... I'm going to go to each headquarters where these guys work and take a dump on their front entrance... Since thats what they are publicly doing to us and our children... Fuck'em all...
If they werent struggling, it wouldnt be our business, but they are being bailed out with our money...
11-11-2008 @ 3:26PM
Bob Alexander said...
AIG executives should be jailed immediately including the CEO who appeared on CNBC YESTERDAY and was so smug about the new > bail out. Who can be accountable today in Government. Where is the checks and balances. This is our money. Is this what we get from the elections of Nov 4. because if it is we must move out of the country.
11-11-2008 @ 3:27PM
Fred said...
I agree they are self-centered, egotistical,supersilious, arrogant ba_ _ _ _ _ _. But the real culprits in this is Congress and more specifically the Senate (Pelosi's crew); remember she said things would change under her watch - HA! Congress is the stop gap - it can pass, it can approve, it can rescind, so where are those members now? Maybe O'Bama will change things, do you think???
11-11-2008 @ 3:32PM
Carole said...
In one of the presidential campaign debates, Barack Obama said that the AIG executives who conducted the first boondoggle retreat at taxpayer expense should be fired and denied any severance pay, etc. Now AIG has done it again but this time with an attempted concealment. What audacity and arrogance---it is as if the AIG execs think they have an entitlement to taxpayer funds to allow their high lifestyles to continue at public expense in the face of the severe economic turmoil. Unfortunately. the president-elect has no power or authority to directly address this outrage until January 20. Somebody in power in the U.S. government needs to do something to stop this gross abuse of public funds now.
11-11-2008 @ 3:42PM
Irene said...
Do these people have no sense or shame? The "average" American can barely keep afloat these days and here AIG is once again playing on our buck.
11-11-2008 @ 3:51PM
emily stafford said...
The actions of management is unbelievable. They should all be fired and new management hired before the government transfers another penny to this company. For the last 20 years many ceos and others have raped investors. That's one of the reason the stockmarket is in the cellar and will probably stay there until this abuse is dealt with.
11-11-2008 @ 5:29PM
Perry said...
Since the goverment is bailing out how about bailing me out since I lost $60000 on my 401k
11-11-2008 @ 7:08PM
Carl said...
I agree with almost everyone's comments with the exception of Fred. The Senate is not Pelosi's crew. She is a representative and Speaker of the House.
11-11-2008 @ 9:01PM
Ed said...
Until we hard working American Middle Class band together and stop paying Taxes to this inept Goverment of ours, we are never going to get out of this mess!!!! Enough is enough!! The Goverment cannot throw all of us in Jail!!
11-11-2008 @ 10:28PM
Ben said...
Here is a classical example of government not paying heed to the rank and file of this country! Our so called representatives (Senate & Congress) long ago forgot whom they represent, instead, they get on their hands and knees to serve only those that provide them with so called "campaign contributions" and favors and no longer attend to the needs of the people. Voting for either Republicans or Democrats is a farce that continues leading this nation our ours on a merry-go-round to nowhere. For shame!!!!!!!!
11-11-2008 @ 11:39PM
icanman said...
LOL... you can all vote for me when this shit stops. The way the tax payers bail out money should have shared for all of us.
1. Give the money to the mortage company.
2. Mandatory (reduce) refinance exsiting loan's to 50% for 20 year low intrest loan.
(They Got Their Money)
3. This will STIMULATE the enconomy without a small piece of Goverment Hand Out. (Gas Money)
11-12-2008 @ 9:34PM
Cynical Synapse said...
Frankly, I'm tired of AIG using the "inaccurate reporting" excuse. Regardless of who paid, the Phoenix event doesn't resonate with ordinary people. Obviously, AIG either doesn't care or can't learn from past experience. Either way, they don't deserve any bailout, let alone an additional $40 billion. Time to just say no!