Tuesday, November 11, 2008

AIG Executives Caught... Again

These fellas at AIG are like the unruly teenager who constantly misbehaves thinking there is no culpability. The problem is, they appear to be correct. Just a month ago after the first bailouts they are out partying [Oct 8: AIG Executives Party it Up Post-Bailout]

From ABC News last night, via a local Phoenix affiliate, catch the AIG big wigs spending our money - this was so hush hush the hotel employees were apparently instructed not to even utter the word "AIG" out loud. Here is the ABC News video link (I can't embed it)

Here is the full local affiliate video

Completely out of the blue in this story, Terry Bradshaw was cancelled as a speaker but makes $40K just for a speech? Man... what a country.
  • According to the Washington Speakers Bureau, which manages Bradshaw's speaking engagements, he commands a fee of more than $40,000 per appearance.
  • November 10, 2008—

    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.

    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.

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."

    "They came to us and said they were drowning and needed help. A person who is drowning doesn't jump up and start partying," said Congressman Cummings.

    Cummings said Liddy should resign as AIG CEO.

    The AIG spokesman said Cummings "was mistaken" about the nature of the Phoenix event.

    "It's terrible," said former AIG chairman Hank Greenberg. "I don't think the left hand knows what the right hand is doing there."

    AIG came under fire last month when Congressional investigators revealed its executives attended a seminar for independent insurance agents at another luxury resort, in Southern California.

    The AIG spokesman said the meeting in Phoenix was for independent financial advisors and "was the kind of thing we have to do to run our business."

    Company officials confirmed the company spent an estimated $343,000 to sponsor the 2008 Asset Management Conference. A spokesperson said much of the cost would be recouped from product sponsors at the conference. (oh of course - that's why it was a secret!)

    KNXV said the president of AIG unit Royal Alliance Associates, Art Tambaro, stayed in a two-story Casita suite and worked out at the spa while others participated in seminars.

    Tambaro and other AIG executives declined to comment when approached by KNXV.

    The AIG spokesman said the Casita suite was provided for free by the hotel because it had booked so many rooms.

    AIG confirmed that former football quarterback Terry Bradshaw had been scheduled to appear and sign autographs. The company said it canceled Bradshaw's appearance which was to have been paid for by another company that was a sponsor of the event.

    AIG said it conducted a "top to bottom review" of expenses "to validate that only expenses required to ensure the meeting's success are incurred."

    The president of the AIG Advisor Group, CEO Larry Roth declined to speak to KNXV.

    In a written statement, he said "We take very seriously our commitment to aggressively manage meeting costs." He said financial planners were charged a registration fee and for their travel.

    A spokesman said the rooms at the luxury resort were made available at a discount rate of $189 a night.

    In addition to Roth and Tambaro, the AIG executives who spent last week at the Phoenix resort, according to KNXV, were Mark Schlafly, president and CEO, FSC Securities' Gary Bender, senior vice president, Investment Advisory Services; and Stuart Rogers, senior vice president.

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