Dissolve the board of directors and sell them to the highest bidder

What can you say? Our elected representatives overwhelmingly approved a bailout that clearly the voters overwhelmingly rejected.

So how long do we let this go on before we lynch them?

Break up the company. Sell the assets to pay us taxpayers back.

(like that would ever happen....)

For a lot of business this is the cost of doing business. AIG has done some bad things, but this isn't one of them. The old saying that it takes money to make money is very true. If a company has to spend $1000 to make $2000 then so be it. It's no different than purchasing ad time on TV.

These people are affluence junkies. The media exposure took away their coke, so now they're smoking crack out of lightbulbs in the ladies bathroom.

@m4ximusprim3: Oh wow. What an analogy.

@ckaught78: It's like buying everyone a new TV so they can watch the ad.

If they were open and up-front about needing this, then maybe I could accept it, although the AIG execs only need to be in nice hotel conference rooms for impressing the "independent advisers"... let them stay at a nearby budget motel the rest of the day.

I want to see congress raise the stakes with proposed jail time for further behavior like this. If I tried to bilk $300k from the government, I don't think I'd be let off with a "try better next time".

I think from now on that ALL AIG seminars or any other trip paid in part or whole by the company needs a government accountant present to ensure proper use of the money. Fraud prevention should be job one against free spending AIG.

Depending on how many people there were this seems to be an okay amount to spend.

If the number is between 100 and 300 people that work out to between 1000 to 3400 a person.A hotel room at a confrence center is about $100-300 a night a 5 night stay will be around $500 to $1500 a person. Add in 20-40 per meal per person so 60-120 aday for 5 days is $300-600.
Not counting anything else just food and lodging you are already at $800-2100 a person.

Factor in the cost of renting a hall along with transportation and it may not be bad. Thatis ofcourse al ong as it isn't 60 people

You know how my company rewards their top salespeople? A paycheck. I'm sure there are plenty of people, either just out of college, or recently layed off, that can do the job just as well, and sure as hell would do it without the "incentives".

This is why you don't give money without getting something in return, like shareholder status or accountancy oversight. Or just fucking nationalize AIG and call it a day. Stupid fence-sitter bureaucrats.

@ckaught78: @ckaught78:

Um, don't these people have like offices and conference rooms?

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."

And that's absolutely true.

Keep in mind that financial advisors with substantial client books typically have their firms by the balls. Those that interface directly with HNW and UHNW clients and maintain that book of business get tons of goodies - because if they didn't, they'll leaven and take their clients (the company's revenue base!) with them.

Taxpayers should know that the loss of revenue at AIG by losing these advisors and their business hurts them far more than pricey seminars. That's just the reality on the ground, folks - love them or hate them, advisors with big clients hold all the cards. Keep them happy or your business disappears.

@shorty63136: A tip of the hat to Fear and Loathing for the lighbulb. The ladies bathroom is from personal experience.

So much for the "independence" of financial advisers accepting this freeby.

This is a similar conflict of interest we see in medicine with physicians and other providers accepting junkets and benefits from suppliers (pharmaceutical companies, etc).

Dear US Treasury, I am a Nigerian price in need of help. My father has... bla bla bla. Seriously, isn't this almost the same scam? Let's just give AIG more money. At this point don't tax payers own enough of AIG that we can claim them a government entity like the post office? The government should shut it down, sell off all their business for value and get the money back.

Wait I get it. They are trying to enter into the World Records as the biggest waster of money.

Why aren't we just letting them implode already? Giving them money to prop up our economy seems to me like an incredibly bad idea, since they're going to waste it all anyway. My momma always taught me, if you don't have money, don't buy it. Apparently this lesson was lost on AIG.

@narq:

This $343,000 was an investment in potential revenue for AIG. You're not going to make any bailout money back if you don't let the business operate. AIG can substantiate the value of these seminars in attracting advisors and generating revenue.

Unfortunately, that argument will be completely lost in this populist din about the "waste."

...well poop.

Well at least my tax dollars aren't paying for it.

/Wait, they are?

@ADismalScience:
Oh come on now, that kind of logical thinking and understanding just isn't tolerated around here. AIG spent $300k and they should burn at the stake for it. Who cares if they need to maintain or, god forbid, try to expand their business. No, they took in money from the taxpayers and now they aren't allowed to spend any of it on anything that isn't 100% necessary to maintain the status quo. If those advisors would leave and take their revenue with them, well then they are just unamerican.
The only people that are outraged at this kind of behavior are those who simply don't understand what is necessary to run that kind of business. You need top talent (top advisors) to generate money. You don't get or retain that kind of talent at no cost. As one poster put it above, these costs seem pretty reasonable given the cost of a hotel room and food for a few days. I'm a "Tax payer" too and I would be more upset if AIG wasn't out trying to stir up/keep business in order to payback the loans they have taken. Remember, the tax payer is only screwed if AIG doesn't pay this stuff back. The money they got wasn't a grant, it was a loan. If they can't get their business going again, which involves retaining the people they were wining and dining at this event, they won't pay back the loans and the tax payer loses. Stop balking at the big dollar figures and start to realize that, as stated above, it does indeed take money to make money. The other way is very, very shortsighted.

A good analogy for these types of seminars - catalogues. Catalogue mailings are an up-front expense used to draw retail business. Not every catalogue produces sales, but substantially enough of them do to provoke continuing mailings.

These seminars are essentially the same thing. They're catalogue mailings for advisors with well-heeled, revenue-generating clients. Sure, not all of the advisors sign up with the firm, but substantially enough of them do to justify the expense. There may be an argument that the up-front expenses would be lower if the seminar was less opulent, but the bottom line is that the sales pitch to these advisors to "join the fold" is a lot easier when "the fold" gives you a long spa retreat.

@Techguy1138:

They should have done a teleconference for a fraction of the cost. The trips now are waste of [taxpayer] money.

@ADismalScience: If they're going to be so secretive about it, I think they deserve to be hounded over this, justified or not. If it is a real business need, then say so and move on. The government's track record on this bailout doesn't indicate they'd deny this cost given the need. If they aren't transparent about this, what else will they be hiding?

@ADismalScience: While I understand this business model, and even agree with it, it should not be beyond the common man (whos dollars these massive institutions NEEDED to survive) to request a little extra oversight. Or in other words, when my roommate borrows money from me for rent, then spends a chunk of it to take his parents (that bankroll him) out to dinner, I have a right to be upset about that. Perhaps he should have used that money to get out from under that financial thumb altogether. Perhaps rather than giving him that money I should have kicked him out and found a roommate that doesn't need his parents help at all.

@Pylon83: They can spend money to make money... but they need to be audited and account for every dollar. We the People are the ones who paid for it, after all.

Or we could take it out of the hands of private enterprise that has already shown itself to be irresponsible, but that's just crazy talk.

@ADismalScience: And they can't submit proposals on these things justifying it? If they felt it was so justified, they wouldn't try to hide who was shelling out for it.

@ilovemom: You mean that literally, right? As in, use a highly corrosive acid to dissolve the board?

@mdoublej:

Precisely. Keep your junkets an give me cold, hard, cash.

People should be happy they farking have jobs at all. I can think of a few people I know of, with some math skills, that would happily take their jobs right now.

What bothers me the most is the fact that, according to the article, AIG was trying to hide the event from the public/gov't/MIB. Is it so much to ask for some basic level of accountability? I dunno, maybe an audit or something?

@m4ximusprim3: Thank you for that visual.

/headdesk

This is just another part of a normal business routine. Something the average American is not going to understand. Thats why they tried to keep the lid on it.

Just remember, the people you are calling idiots are the one's who are getting your money, so who's really got who by the balls ?

@novacthall:

And then sell what's left of the board (the goo, I guess) to the highest bidder!

@Red_Flag: Public enterprise is no better by definition. Each individual case and group should be examined to see which pairings are the most beneficial. Frequently public holdings are just mired in argument, indecision, and petty power plays. Just like private holdings.

@Red_Flag:
Or the government could not balk at normal business expenses and not waste even more money on unnecessary oversight. This kind of spending, to the naked eye (or at least the naked idea with any business sense), is not suspect. Had they all brought their families, or had this been some sort of "Executive" retreat that was to reward AIG employees rather than generate business, that would be another story. But in this case, it's clearly a business generation/maintenance thing. Why should AIG have to spend more of the "tax payer money" to propose and justify this kind of conduct?

Hey relax guys, they said that they are taking their commitment to aggressively manage meeting costs VERY SERIOUSLY.

Good enough for me.

/not really

Apparently they can't have these meeting on conference phones like the rest of us. Seriously, Eff these guys. Let AIG fail, I'm sick of reading these stories.

@310Drew:
Exactly. The reason they "hid" it was probably because Joe the Plumber doesn't understand how their business works, and AIG doesn't want to take a ton of heat in the media and subsequently from the uninformed public for conducting their business.

@Red_Flag: They already got bad press for doing basically the same thing a few months ago. So it doesn't surprise me that they're trying to hide it this time around.

@Red_Flag: They're hiding it because if they didn't they would get hammered, regardless of how much business sense it makes.

Why should they have to "submit proposals" (and who should they be submitted to)? They are an independent company. If the US government doesn't want AIG to do certain things with the money, then the US government has the power to condition its money on AIG not doing those things. Loan agreement always have a laundry list of covenants in it.

This is an excellent example of why nationalizing companies is a horrible idea -- the people who are best equipped to make decisions about what's good for the business are inside the business, not Congress or the press. Sure, AIG's involvement in CDSs was a huge error, which has resulted in over $100B of debt. But the Government's track record is far worse: over $6T in debt.

@Pylon83: Why?

Because they've already shown that "business generation/maintenance" aren't all they're spending this money on. Have you already forgotten the hunting trip?

[consumerist.com]

Let's not forget, to quote Atty. Gen. Cuomo: "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."

CEO golden parachutes? Hunting trips? That's far above and beyond "business generation/maintenance".

@Red_Flag: As an addendum to "why?"... because they're spending OUR money, not theirs. Or would you mind lending me your life savings and let me spend it as I see fit, with only a verbal agreement that theoretically I should be using it to build a profitable business?

I agree with business expenses as required. However, as many notice and say, don't try to keep it a frikkin secret!! Man, there is corporate BS, which got them where they are, then there's plain out manure. It smells the same, but manure has a purpose. The problem is with so much S#!T going around, you can't tell the difference anymore. However, nobody would notice had the corporate a$$#@!e flushed the toilet the right way. Now the government plumbers are helping AIG figure out it's head from it's a$$.

These insurance pigs are really p*ssing me off.

The next time you want to meet with your advisors, porkers, try holding the meeting in Newark!

@ADismalScience: Good analogy.
@Red_Flag: They probably did, just not to the gov't. If you are suggesting that they should need to, try writing a proposal for your next paperclip or staple. That's about the same funding:cost ratio.

@cf27: I am of the opinion that a private company is no longer a private company when it accepts a bailout. Adam Smith would dictate these companies die a natural death. By giving them public money, they should be saddled with restrictions on what they can and cannot use the money for, and I, for one, am extremely disappointed (though not surprised) that no restrictions were instituted in the first place.

@mdoublej:

These aren't salespeople - they're independent businesses, and, in essence, AIG's customers. The investors who invest with these advisors are pretty much customers of the _advisors_, not AIG. If the advisor isn't happy with AIG, and isn't feeling the love, he can easily switch to another platform, and take the vast vast vast bulk of clients with him, since they really won't notice a difference beyond maybe having to fill out one form and seeing a different logo on their monthly statements.

Um, we have given them billions of dollars, and people here think 300K matters?