AIG Executives Help Themselves To $86,000 Hunting Trip
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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Comments:
AIG has responded to criticism about the hunting trip with "regret."
What? Not "taking it seriously?"
Why the hell didn't we dump the boards like the British just did?
Taking out the top guy and leaving the rest is like killing one rat and thinking New York is clear.
I would like to know how can I sell my soul to be a CEO and get ONE MILLION dollars a MONTH
This should not surprise anyone. These guys have been riding this gravy train for years and I am sure it will take time for them to get back to the real world. That being said, this was still extraordinarily stupid.
@aerick79: Silly, they don't sell their souls to become Ceo's. Ceo's are just naturally born without souls.
My friends and I have sort of this "yuppy whitebread" pseudo-tradition of driving down to the farms in Half Moon Bay to pick up pumpkins for Halloween.
On our way down, we happened to drive by the Ritz Carlton where AIG had planned their NorCal 'retreat'. The place looked gorgeous. Some day, when I'm a top-performing sales executive for a failing insurance company, being propped up by $120,000,000,000.00 of tax dollars, I hope to spend some quality time there with family!
The Feds are in bed with these a-holes, that's why there is nothing being done about it.
If the feds were really serious about the bailouts, the plan should have called for a 50.1% stake in the company as well as a controlling vote on the Board of Directors until such time that the company can re-pay the "bailout loan".
In this entire bailout plan I have not seen a single mention of these "loans" being repaid by the companies that are requesting them. If I've overlooked it, please post a link to it.
I wonder: if we had the Worst Company in America to do over again, how many of the names would change? 50 percent? 75 percent? I mean, Comcast sucks like a Tijuana donkey show, but they haven't killed the economy and then handed out money to the hitmen.
I feel MUCH better about my decision to pay slightly more at GEICO for insurance than stick with AIG a few years back...what a horrible, horrible company.
@snoop-blog: Maybe they can be nominated for the first ever Consumerist Golden Assholes award? Heck AIG might even take the next Golden Shit award too?
@aerick79: After being terminated no less!
Tank a financial powerhouse that's been around for a century by wasting money away, get fired, and still make a million a month from them. It's the american dream.
AIG has officially surpassed WaMu as golden parachute douchebag king of the American financial system. At least WaMu regretted its decision to the point of canceling the parachute.
Any other corporations want to compete and see how much customer, government, or taxpayer money you can stuff into your CEO's pockets?
This is just standard industry practice. What's everybody getting so upset about?
What do they hunt in England, that they cannot in the USA?
Ah, the Irish.
You just know that all the companies lined up to take part in the $700 billion bailout are watching this like a hawk to determine just how far can they push it and what penalties (if any) they can expect
I say Andrew Cuomo needs to apply some swift and rough justice to set an example and send a message to the companies waiting for their handout.
anyone still feel like defending them?
I wish I could be shocked and surprised but I think I'm not desensitized to it.
Um . . . maybe it's that the industry is carrying on with standard practices that reward incompetent leadership while the company is staying afloat on the taxpayer's dime?
Why isn't the board and AIGs executives being prosecuted for being completely negligent in their fiduciary duties? Why hasn't prosecution of all these clowns been brought up (Mac/Mae/Lehmann/etc)?
@big keytee: Yea, they "regret" that we "found out" about the "hunting trip." I don't know why I'm "speaking" in "quotes."
Torches and pitchforks! Hot tar and feathers! Where is AIGs headquarters? Time to make our voices heard!
The old-fashioned methods tend to work better than the new legal methods.
@downwithmonstercable: well why not? we let congress do that. serve two terms in the senate and get full pay for life as pension.
We "regret" that [you found out] this event was not cancelled.
@BoomerFive: Those guys will NEVER "get back to the real world". They don't even have an inkling that a REAL world exists. They look upon screwing every human on the planet and the planet itself as some kind of God given right and nothing is ever going to change that.
Heh.
And I was the one told "I didnt know what I was talking about" when I brought up how as a company, regardless of division you dont just take a 40k trip to the Ritz after asking for 80 billion.
Just goes to show all of us who where outraged before had ALL the right to be.
@linlu: I haven't got a clue.
At least I think Lisa Madigan's suit in Illinois against Countrywide is still chugging along.
@big keytee: seriously, as if the people who decided to go on the trip were unruly teenagers who the executives had no control over--oh wait, it was an executive hunting trip!
Also, hunting trip?
@ludwigk: Too bad they weren't there when you drove by. That would have made for an interesting situation, you and your friend going in to shake them down for (your) money.
By the way, anyone know of any interviews/exposes that have been done on these bank executives? I keep expecting to see an article on how the people who got us into this mess are still living lavishly, but somehow they've been able to avoid public scrutiny.
Since we are all shareholders, how about a shareholders' lawsuit against the CEO?
AIG must want that statue of golden poo in the worst way.
I'm trying to work up the appropriate outrage... but I can't. I already used it up on their half a million dollar vacation. I need a rage loan. Or a rage bailout, yeah! (I'm looking at you, Bernanke!)
"he has the power under state business law to review and possibly rescind any inappropriate AIG spending."
Possibly? Why isn't this already in the process of being taken away?
Modern-day Marie Antoinettes. What Andrew Cuomo really needs to do is build a guillotine...
@squatchie44: I was the opposite. I TRIED to get AIG since I was on AIG on my father plan. They wanted 4,000 dollars a year for ONE driver with a record with 1 speeding incident 4 years back and a suspended license that was over a unknown unpaid parking ticket that I only found out AFTER I got pulled over for it (thank you very much you douche of a governor McGreevey who made it law that a city parking ticket could suspend your license even if there was no evidence the ticket had ever be served or reported to the registered owner in the records)
GEICO? I started out at 3400 a year for 2 drivers with no relation and within 6 months had it drop to 2800 a year with 2 drivers being married. while the marriage dropped our insurance about 100, they themselves dropped our insurance 500 dollars over the course of 6 months.
I felt it appropriate to defend the Half Moon Bay trip, as that was NOT an executive retreat, but a celebration for independent agents who had sold ridiculous amounts of personal insurance (and thereby helped keep AIG's insurance arm profitable).
However, this is inexcusable. Executives really are out of touch with reality, it seems.
How about we take the time to thank Andrew Cuomo for what he's done so far, and tell him it's time to take the gloves off:
@B: I'm all about the "quotes." Maybe one day I'll be able to fly like Chris Farley did on Weekend Update.
*facepalm*
I keep trying to think that they'll get over this whole "doing stupid shit" thing, but they prove me wrong again and again.
And this time, it looks like it actually was something for the executives, rather than the salesmen.
Blah. I think we need to get Hulk Hogan in here to give AIG a big boot and a leg drop right about now.
Take AIG over, fire all executives even withing whiffing distance of these irresponsible, wasteful, selfish expenditures, hire new, hopefully less idiotic people to run the company, and then leave them to it.
It's being propped up with tax money, so Cuomo should go in like the boss he basically is entitled to be now and clean house, not send letters saying that they all might possibly be in a very small amount of trouble.
@MercuryPDX: Can Cuomo do anything though, since it was federal money that was used for the bailout? I'm not entirely sure he has the jurisdiction. In any case, I'd love to be wrong on that and sit back and watch him take AIG on.
@linlu: I'm pretty sure I read somewhere that some financial companies have filed lawsuits against these banks, claiming they were misled as to the safety of certain investments. I would also guess law firms are currently in the process of gathering unhappy investors for some class-action lawsuits.
WTF is wrong with these A-holes? They should make a Conusmerist's most wanted poster, and put the execs of all the major companies who are part of this mess so we can at least have a face to go along with the hatred.