Days after it got a federal bailout, American International Group Inc. spent $440,000 on an exclusive California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company’s meltdown. AIG sent its executives to the coastal St. Regis resort south of Los Angeles after the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.
Former AIG CEO Robert Willumstad, who lost his job a day after the Federal Reserve put up the $85 billion on Sept. 16, said he was not familiar with the conference and would not have gone along with it. So apparently, this was an excursion that was devised by AIG officials after the government came to its rescue.
While the executives on the outing didn’t include anyone from the financial products division that nearly drove AIG under, lawmakers still were outraged over thousands of dollars spent on an outing for executives of AIG’s main U.S. life insurance subsidiary.
But Eric Dinallo, superintendent of the New York State Insurance Department, said he could see the value of such a retreat, given the circumstances. He said “the worst thing that could have happened” was for employees and underwriters in its life insurance subsidiary to flee the company, and such a retreat provided an opportunity to focus on how to best utilize this second finanical chance that we, the people, have provided.
Nice try, but this is a situation where perception is reality. AIG executives have new partners now - the American taxpayer - and they should be sensitive to the financial suffering most of them are now experiencing. If an off-site retreat was needed, a civic auditorium or community center would have been more appropriate - given the circumstances.