The AP is reporting that AIG executives aren’t done partying yet — they took an $86,000 hunting trip even as the company was requesting an additional $37.8 billion loan from the Federal Reserve. Meanwhile, New York attorney general Andrew Cuomo has said that as long as the company continues to be propped up by the taxpayer — he has the power under state business law to review and possibly rescind any inappropriate AIG spending.
In a letter to AIG, Cuomo laid down the law:
In the last several months, as AIG was teetering toward bankruptcy, and operating with unreasonably small capital, AIG nevertheless made numerous extraordinary expenditures in the form of executive compensation payments, junkets, and perks for its executives.
For example, in March 2008, ignoring the massive losses AIG was experiencing, the Board awarded its Chief Executive Officer a cash bonus of over $5 million and a golden parachute worth $15 million. Similarly, in February 2008, a top-ranking executive who was largely responsible for AIG’s collapse was terminated, but still permitted by the Board to keep $34 million in bonuses. This same individual apparently continued to receive $1 million a month from the company until recently.
Moreover, even after the taxpayer-funded bailout of AIG, the company paid hundreds of thousands of dollars for luxurious retreats for its executives, including an overseas hunting party and a golf outing. We believe these expenditures and payments, made in the absence of fair consideration, violated New York law, specifically, N.Y. Debtor & Creditor Law fj 274, which deems such payments to be fraudulent conveyances.
AIG has responded to criticism about the hunting trip with “regret.”
“We regret that this event was not canceled,” said a spokesperson.
AIG has borrowed about $123 billion from the Federal Reserve in the past month.
AIG executives spent thousands during hunting trip [AP]
Cuomo’s Letter To AIG (PDF) [NY AG]
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Is this really any surprise? It’s about time somebody started paying attention to the fact that those meat heads are using taxpayer money to have fun instead of get their business back on track.
When do we get to letting regular joe’s become a CEO?
something tells me that without the luxurious upbringing of most CEO’s, a layman CEO would be more fiscally responsible as they cannot perceive ever wasting that kind of money?
Oh wait… I forgot, the board is rich too, they would never allow a layman interloper CEO.
The rich get richer…..
It’s becoming even more clear as to how they got themselves into this financial pit in the first place.
Definatly a #1 or #2 standing for World’s Worst Company next year.
Look, you all don’t understand. This is an essential part of the cost of doing business. The bailout was to keep AIG operating, and in order to operate, the executives need pedicures, to shoot animals that they will not themselves gut, and (presumably) get coke and blowjobs. You simply CANNOT run a major insurance company without these things.
@TechnoDestructo: Apparently, you cannot run one successfully WITH them either.
@MercuryPDX: Standard Business Practice. Move along…
Someone needs to get Dick Fulded!
Thank you, thank you, thank you, Andrew Cuomo. Apparently these bozos weren’t shamed enough with all the media attention for their spa weekend.
WTF does “A.I.G.” stand for, anyway? “All Involved in Graft”?
@dweebster: Or, “All Investors Grieving”?
@dweebster: All Incredibly Greedy
The sad part is that the decision makers at AIG probably don’t see anything wrong and wonder what all the hub-bub is about. It comes from having an overblown sense of entitlement and living in their own little nirvana where only the “little people” have to worry about costs.
I am just so frustrated by this. The response to the first was “but that’s a normal thing! It’s just business!”
You know, this kind of bailout is not “normal.” Thus things need to CHANGE, not stay the same. Heck it shouldn’t have been like that in the first place- but that’s coming from a person not “in the know.”
AIG had a table set up at my school’s career fair this week. I debated asking them for my money back.
I really, really did.
Well, it seems like the winner for the Worst Company in America award for 2009 has already been decided.
I hate to say it, but these guys are doing what any other sales organization does, take their rich clients out with the intent of getting a piece of their bank account. This is what people do to get business, it’s just a fact. I know some of this stuff is fishy, but like…they can’t resort to cold calling and dry propositions to gain business, they need to be continuing business as usual.
With that nearly half a million dollar spa trip they went on the other week, they would ideally rake in business a potentially multi-million dollar client.
You have to spend money to make money.
That is all.
@sublicon: “these guys are doing what any other sales organization does”
Problem is that they are no longer “any other sales organization”, they are now co-owned by 350 million American taxxpayers and as such, are subject to intense public relations scrutiny and need to structure their buiness processes accordingly. Want to spend $1 million on a sales trip. Show me reports, analysis, expected sales, risk management, alternative plans, expected attendance, etc.
Anyone gonna point out that Andrew Cuomo was the one who got us in this mess in the first place by relaxing sub-prime lending standards under the Clinton Administration? Anyone? Anyone?
What sort of effect have these outings had on insurance premiums over the years.
Even if this was planned ahead they should be cancelling this stuff.I hope Cumo nails their butt and gives insurance payers a refund.
This is just unbelievable. Just a month ago, they were begging to be saved, and now? They act like nothing ever happened. We shouldn’t have bailed them out, it’s there fault. Let them suffer.
@michaelleung: I think the government should have known better given that they were actually demanding the money. It isn’t begging when you’re telling someone that they have to do it “or else”.
Hopefully the govt will prosecute these incompetent schemers and maybe get some of the taxpayers’ money back. I waiting for the day the golden parachutes become golden showers for these shameless execs.
What did they hunt, Unicorns?
this is all so fascinating to read, while my husband and i anxiously wait day by day for when AIG is going to decide to lay him off. yes, they have already said he’ll be laid off, but refuse to say when, or what kind of severance he’ll receive. i’m glad someone is enjoying a hunting trip while thousands of employees career and financial futures hang in the balance.
Can we re-do the “Worst Company” brackets?
I think a special edition “Worst of the financial meltdown” bracket is in order.
I nominate AIG.