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You Paid For It: AIG's Retreat Destination, Up Close

Scott Vogel

It's the kind of publicity you just can't buy.

Times are tough in the tourism business; accordingly, hotel chains around the world are pulling back on their advertising buys. But that's okay, there's another way tourist-hungry resorts can gain attention in a down economy: host a retreat for AIG executives.

Consider the St. Regis Monarch Beach Resort on the sun-splashed California coast somewhere between Los Angeles and San Diego. In fact, the St. Regis seems to be still reeling from the experience, on the evidence, that is, of its "Last Hurrah" package, which although technically designed for expecting couples in need of a babymoon, sounds just as perfect for the bailout-bound.

Oh, by the way, there's a world-class golf course on the premises where the AIG folks recently racked up almost $7,000 in charges; better yet, -- just to keep this felony theme going -- said golf course was once a favorite of O.J. Simpson's.

And after a hard morning on the back nine, what better place to repair to than Spa Gaucin, where "Each treatment begins with the toss of a coin into our 'Well of Desires,' where symbolically all your cares will be left behind." (Huh. Ya gotta think that that well is clogged with pennies at this point.)

By now we've all heard AIG's various justifications for its $440,000 profligacy, how the conference was planned long in advance of the bailout (you know how those cancellation fees can get you), how it was a standard reward for the insurance firm's top sellers, how it was a way to prevent the brain drain that -- let's face it -- often accompanies a company's descent into insolvency.

But let's go back to the St. Regis. No publicity is bad publicity, remember, which is why the resort is booked solid for the next two weekends, according to the Los Angeles Times. And those seeking a room at the next hot spot on the disaster tourism circuit would do well to immediately call Reservations at the Ritz-Carlton Half Moon Bay further up the coast. It's yet another elegant monument to decadence that sits on yet another bluff overlooking yet another gorgeous strip of the Pacific. And next week, the Ritz-Carlton will also have something else in common with the St. Regis: dozens of AIG executives huddling together in style, whooping it up on another junket of dubious necessity in a time of crisis.

By Scott Vogel |  October 9, 2008; 7:18 AM ET  | Category:  Scott Vogel
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I'm pretty sure they had a big party in Babylon one night and Roman too!

Posted by: Chris | October 9, 2008 8:52 AM

The Very People Responsible For Setting Fire To Our Economy And Burning It To The Ground Are Conspiring To Shift Blame And Avoid Jail Time. And One Of Them Is Set To Be Our Next Attorney General.

The Major Players Including Jamie Goerlick, Franklin Raines, Daniel Mudd, and Jim Johnson are at the heart of this meltdown.

Aided By Chris Dodd, Barney Frank, Chuck Schummer, Henry Waxman, Maxine Waters, Artur Davis, Gregory Meeks, Lacy Clay, Harry Reid, John Kerry, Barrack Obama, and Nancy Pelosi.


http://www.youtube.com/watch?v=_MGT_cSi7Rs

These people owe the American People an explanation, an apology, and perhaps some jail time. Don't take your eye off of the ball. These are the people who lit the match and fanned the flames. One Of The Players, Jamie Goerlick is set to be our next attorney General. We simply CAN'T let this happen or they will all go free.

http://www.wnd.com/index.php?pageId=67068

Posted by: GeraldD | October 9, 2008 8:56 AM

They said the Cancellation fees was high,
I am sure the cancellation feees was not as high as $440,000.
Also a reward for top sellers, I cannot understand how can a company go insolvent with so many top sellers,
What we need here in America is for the American people to start asking strong questions and getting true answers.
Why dont you and me not break the Law, Because of the price we will have to pay.
Then why are these High paid executives above it.
Fellow Americans now is the time for us to do something and not leave it just to the government or the corrupt corporations.

Posted by: Sunny Singh Bhatia | October 9, 2008 9:07 AM

This is an absolute outrage. I am disgusted by this.
No regard for taxpayer money. There is no excuse for this kind of reckless, pathetic conduct. That is how they got into this mes sin the first place. Someone needs to get fired. What a joke.

Posted by: SeanS | October 9, 2008 9:35 AM

Nowhere else in the world are executive salaries so high. This is NOT one of our customs that the world needs to copy.

Posted by: SCOTTA | October 9, 2008 9:42 AM

they are all on crack!!

Posted by: paul | October 9, 2008 9:46 AM

Why do they think they are above the law? Simple. They are. They have the means to purchase a $10,000 a plate dinner at BOTH RNC and DNC fund raisers. And yes, they will do both; so they cover all the bases.
So if you have the means, give to the RNC & DNC, and you'll have complete immunity to just about everything.
I'm personally shocked that people are surprized that this happened.

Posted by: Scoty | October 9, 2008 9:50 AM

Sue 'em all. Greedy bastards

Posted by: Hadamaga | October 9, 2008 9:51 AM

They should have all of their retirement and savings taken and put back into the company to help the share holders and 401k investments recover. They should all lose their jobs and be fined. This is the root cause of our economic hardships, pure unadulterated greed.

Posted by: Ben | October 9, 2008 9:53 AM

dude that was so freakin funny....i loved it

Posted by: Hank Grennberg | October 9, 2008 9:55 AM

Despicable behavior from disconnected people. AIG's business was collecting a few hundred, or a few thousand, from the millions of people they insured.

To burn a half million up at some trendy resort is the epitome of extravagance and opulence by people who so disconnected from their insured that they don't seem to have any problem with this. They live in obscenely expensive homes, fly only in premium seating or private aircraft, and have "people" to shuttle them around and manage their schedules.

Gimme a break. These bozos are con artists and their cahoonies are so big, they continue to rub it our faces. And by the way, this article is an excellent report of just how pervasive this problem really is. The problem is these "executives" being disconnected from reality of the average man. They are rich because we gave them money which the blatantly burned with excesses and poor management, yet they go home to their gated community homes and private schools in their exotic cars all out of the reach of those of us who paid for them.

Felony? Criminal? They should lock them all up, liquidate THEIR assets, and throw away the keys.

I want to throw up, but I don't have enough money left to buy a barf bag. While you're at it Mr. Washington Post, expose the politicians in your fair city that took the free ride to these places courtesy of AIG and all the other companies who used lobbyists to advance their con and felonious activities.

Posted by: Rob English | October 9, 2008 9:56 AM

Someone should do an expose of the Fortune 500, or even the DOW 30 sales reward programs or executive retreats. You'd be amazed as to what you will find!!

Posted by: Baba Lewey | October 9, 2008 9:56 AM

The trip was for independent producers who sell AIG products.

Only 10 AIG employess were in attendance.

The trip was paid for a year ago. These trips are nothing unusual for producer incentives for many companies.

Liddy released a press release yesterday confirming.

Posted by: Anonymous | October 9, 2008 9:59 AM

No one deserves to be "rewarded" for the mess at AIG or have luxuries bestowed upon them to prevent "brain drain." I know that at 57 years old that I'm not being rewarded or coddled in midst of the economic crisis that has caused my retirement savings, for which I've sacrificed, to dwindle from over $400,000 to $290,000 in the past year. That's a huge amount of money to make up when making $66,000 a year. Obama is right - whoever is making these decisions at AIG need to be fired!

Posted by: Mary | October 9, 2008 10:00 AM

GeraldD,

Shut the hell up. Who was in control of both Congress and the White House during the first SIX years of the Bush presidency? How exactly can the minority party pass laws? Did they do so by filibustering the same way the Republicans are doing right now?

If you got your head out of your arse, you may remember that Reagan was the first person to start deregulation. That eventually led to the Savings and Loan scandal (A prelude to today's situation?!?!).

Perhaps you should should be blaming both parties for their ineptitude rather than just one. But you won't...

As the saying goes, "Never underestimate the predictability of stupidity"

Posted by: Minny | October 9, 2008 10:02 AM

The poor decision to go through with the retreat in light of the taxpayer bailout is indicative of the kind of poor decision making that got our country into this mess. If we let companies like AIG face the consequences of their mistakes, rather than bailing them out, it might stop such risky, unwise behavior in the future. I've got no problem with greed; my problem is the combination of greed, foolishness, and lack of personal/corporate responsibility that we've seen through this financial crisis.

Posted by: Jerry | October 9, 2008 10:13 AM

It's high time these filty rich %#@&% bums start paying a price for their wrong doing. If you have an AIG policy..consider having it written elsewhere. The only way these people will pay a price is if we the people make them pay.

GW can't do it because he is part of the problem and/or he is too busy counting his contributions from AIG.

CANCEL your AIG insurance policies.

Posted by: Chuck | October 9, 2008 10:15 AM

The writer of this article and the people responding negatively to this article are simpletons. This event was thrown by a subsidary of AIG parent, which has its own cash flow and is not going to get a penny of the $123 billion that the fed gave the parent company.

Also being in sales myself, if I am going to outperform my peers, I would like to be rewarded.

Whoever thinks the tax payer footed the bill for this retreat or the retreat coming up at half moon really needs to do their research before they get on their soapbox.

Posted by: insurance geek | October 9, 2008 10:21 AM

WE KNOW MONEY

Posted by: AIG | October 9, 2008 10:26 AM

Who's job is it to watck over us anyway, will they really do something about this kind of "BailOut" This is really pathetic, and makes the government look just as pathetic for not watching over our money in this way.

Posted by: THE PEOPLE | October 9, 2008 10:30 AM

Shameful. How i would love to get paid that amount to run a Company into the ground, be bailed out by my fellow taxpayers, and continue to party like it's the end of the world. Let me go max out my credit cards, file for bankruptcy, then do it again. Hopefully someone will wakeup SOMEWHERE!!!

Posted by: Blue Collar Bob | October 9, 2008 10:38 AM

One thing that most of you are not considering.... this retreat was not funded by the bailout money, as it had to have been paid for long in advance. Poor choice to go? Perhaps. Bad timing? Certainly!

I plan corporate retreats for my husband's company every year and I can tell you that the retreat we are going on next month has already been fully paid for since August. If we do not go, we get no reimbursement for the monies already paid. So what would you do....?

As for AIG - If their retreat is fully paid for and cancelled, not only does the company lose the money paid for the retreat, but employee morale will suffer, as well. While most people are not sympathetic to the morale of their employees, we all want the company to figure out how to pull through this mess and perform well in the future, so why flush good money down the tubes by not attending something that is paid for (at least the airfare and hotel would have been pre-paid and non-refundable)? The only suggestion I would make is to have had the employees who attended pay all their own expenses (meals, golf, spa treatments, etc.)

Just something else to consider.

Posted by: Retreat Organizer | October 9, 2008 10:49 AM

Usual sensationalist media reportage. The whole story appears to have been mis-reported - the event was for independent life insurance agents, NOT for AIG employees and NO AIG executives were even there: see this marketwatch.com story, at http://tinyurl.co.uk/gczo.

Specifically the paragraph:

“The event, mischaracterized as an “Executive Retreat,” was held by one of AIG’s insurance subsidiaries for independent life insurance agents, not for AIG employees. These agents were top business producers for the company, and of the more than 100 attendees, only 10 were employees of the AIG subsidiary who were there to represent their company. No AIG executives from headquarters attended. The meeting was planned months before the Federal Reserve Bank of New York’s loan to AIG.”

People, check your facts first!!!

Posted by: Christine | October 9, 2008 10:50 AM

Posted by: Christine | October 9, 2008 10:52 AM

have cancelled my policies with these corrupt immoral bastards. execs commented they also have trips planned for the fall. so they continue to lavish themselves at our expense and the govt continues to give them more $$$$$ as they did even after the first trip. they need to be fired and ordered to pay back the monies. i'm not sure if i have ever been so disgusted as i am these past weeks.

Posted by: KC | October 9, 2008 12:01 PM

Wow, I guess we are wrong or simpletons as the insurance geek says.

The party was paid for a year ago - Really, what about flights, rental cars, golf, booze, meals and evrthing other than initial deposits. Check the peoples expense accounts for first/business class tickets, limos not to mention the hidden strip clubs.

The party was not for AIG execs but rather for their life producers - Does this say AIG did not pay for the party. Maybe to Mrs. Palin. Even if you argue that the subsidiary paid, doesn't their P&L impact the Parent. I am sure the AIG organization handling CDS was a subsidary jack. The producers know they are top producers by the size of their commission checks. They are rewarded already.

Again, we are wrong to pick on this event for $400,000. This little amount was not even have thought to put up a red flag to AIG execs because it is nothing compared to the real items. It is people like this that don't know the economy is in the pits because the sun is still upon them.

I guess we should hang our heads because The People are wrong to be upset about stupidity and greed.

Posted by: Superman | October 9, 2008 12:31 PM

Yes top performers need to be rewarded but to think that "morale" will suffer if employees are not allowed $700/night hotel rooms, $23k in luxurious spa treatments and $7000 to spend on the golf course is ridiculous. How do you think morale, future sales, and the ability to continue to attract top performers to your company will be affected by all of this well-deserved negative press? The public HATES AIG right now. In order to win back current/future customers and have a prayer of digging themselves out of this hole, AIG needs to consider the public's opinion and perceptions of their lavish spending. RESPONSIBLE companies who are suffering in these tough economic times are actually CUTTING BACK on spending - travel, team meetings, off-sites, and the ways they reward performance. RESPONSIBLE companies are canceling their holiday parties, etc. Even top performers would rather suffer a little today to still have a job tomorrow.

Posted by: HR Guru | October 9, 2008 12:52 PM

There were only 10 AIG executives on the trip, with 90 independent insurance sales agents. The trip is a reward to top selling agents. I have been in charge of marketing and can offer that at a cost of $4,400 per person. I have been part of much greater trip reward programs for much smaller organizations, so this does not bother me in isolation. I DO STRONGLY object to AIG and the insurance industry being allowed to cherry pick customers that has put 47M people at grave financial risk. I object to AIG martgage policies that have led ignorant customers into over-leveraging their homes. I object to the idea that these financial institutions can exhibit poor financial judgement and bad business practice, then turn to us to bail them out. Let them sink, let them crash, let them suffer the losses, they are of their own making. If I screw up my business, I will go under, like many around me. In fact, many good businesses will fail now due to the credit crunch and idiotic public panic, which is killing sales today. None of us, or them, will get a check from the feds - and our problems are not of our doing - something that cannot be said of the firms my tax money is being used to bail out? This entire situation is offensive and idiotic. The rich continue to harvest us all for cash, from ripping us off at the pumps, at the insurance counter, and at the federal trough. the only thing that keeps this robbery train rolling, is they have us all against the wall, trying to keep from losing what little we can scratch out, while they set us up for another fleecing. The market is now vacuuming our 401k's dry, handing tax money out like candy on halloween, and killing our youth in a war with no visible end.... Why exactly are we all so complacent about this? Attack a few sales people at AIG if you wish - its just a Red Herring to detract your attention from the reality that you are being robbed blind on on a level that makes a few people getting rub downs in a resort in So Cal between rounds of golf seem truly insignificant, and any wimping about makes us all look pathetic. Pay attention to what is really important, what is really happening, and give these witch hunts a rest already! We should be focusing on shutting down the gravy train, shutting out the hogs feeding at our troughs, and making this country work again, for all of us, not just the few unscrupulous, amoral, offensive, and unethical criminals that seem to be in control tight now.

Posted by: Take my money please | October 9, 2008 12:52 PM

Why is anyone surprised? It is a very understandable behaviour!

Posted by: John | October 9, 2008 12:58 PM

The issue should be the lack of "control" put upon AIG related to the bailout..by our own Congress! They are the "stupid" ones!

Posted by: Doug | October 9, 2008 1:16 PM

10 employees equates to $44,000 per person. You'd better recheck your math. I get rewarded like that every year. It's called my salary.
retarded!

Posted by: middle class man | October 9, 2008 1:22 PM

100 employees at 4400 per..check your own reading comprehension!

Posted by: doug | October 9, 2008 2:00 PM

This is mis-information blown out of proportion as stated by previous posters.

In any event, the AIG "bailout" is not from government or taxpayer funds, but directly from the Federal Reserve Bank, a privately-owned entity. It was not an act of Congress.

Posted by: Lester | October 9, 2008 2:13 PM

I hate these AIG folks. I try not to wish ill will on anyone, but they're really testing my principles.

Posted by: disgusted | October 9, 2008 2:15 PM

Vogel: very entertaining reading that really gets us all charged up. That's what you're after, right? Too bad the reality doesn't have much to do with what you wrote.

Posted by: Robert G | October 9, 2008 2:16 PM

Those people who defend this, saying that the trip was planned in advance so it couldn't be funded with bailout money, are simple minded.

If you haven't been paying attention, the wall street executives STOLE THE MONEY FIRST, THEN WE PAID FOR IT!

Posted by: David | October 9, 2008 2:29 PM

So man ignorant replies here from fools who read the Main Stream Media Reports and get their knickers in a twist. This was a sales contest offered to Independent Agents/Contractors by a PROFITABLE and SECURE seperate entity of the AIG family of companies. AIG owns over 80 different corp entities, and almost all are exceedingly profitable - as you will see when they break up the parts and sell them off to pay back you whiny Know Nuthings.

Most of these independent sales guys do not WORK for AIG, and WON a much deserved Sales Contest Promotion promised to them and their families typically 18 months prior to the date. The vast majority of the folks at the event worked hard and earned the trip for "producing" - something most of the whiners on this site posting know little about. This wasnt AIG upper mgmnt elites frittering away profits. The sales promotion probably generated 10x the cost of the event is Profits. Get ALL the facts - not just the sound bytes offered by Congressional nitwits and drive by media dopes.

Posted by: YouRStuckOnStupid | October 9, 2008 2:51 PM

I've vented enough over this, but thanks for posting it.

As for the Ritz Carlton Half Moon Bay - you can also get some reflected Hollywood glory by going there. It's where they filmed the wedding parts of "American Wedding".

Posted by: Chasmosaur | October 9, 2008 2:54 PM

By any change was G.W. with them?

Posted by: Judge Nan | October 9, 2008 3:06 PM

Comments such as from "Gerald...."

show how those that are blind to their party will believe anything negative about the opposing party and ignore within their own party.

It also shows how requiring a test before registering to vote would be a good idea.

Please explain what the 5 Republicans were doing while the 6 Democrats were 'ignoring' issues while sitting on the Senate banking finance committee?

Please explain how financial organizations that were hiring physicists to create 'investments' were within the realm of Congress' oversight?

Please explain how the purveyors of de-regulation were NOT responsible for the greed of corporate executives?

Please explain how a Democratic controlled Congress that fails to have a 2/3 majority to override a Republican presidential veto has the power to get laws passed?

Please explain why you think "democrats" have been in control? Perhaps you should review how laws are made in this country.

ABC has cartoons that may cater to your needs.

Posted by: mwf | October 9, 2008 3:12 PM

10 employees of AIG attended this function. ALL of the others were independent agents who sell AIG Life Products.
SAles is an industry where you reward your top producers with trips (Presidents Club, Emerlad Club, Platinum Club, etc..). If you cancel a trip planned in advance for your top producers and do not reward them, they can and will start selling someone else's product.
AIG needs to maintain value in its brands in order to maximize the sales price when these subsidiaries are sold. If AIG stops rewarding top sales people, they'll elave, sell no more product and make the company worthless, thereby costing the tax payers more than 123 billion already spent. As it stands now, the governement is going to come out far ahead inthis deal and more than likely reap a profit of over 15 billion dollars once the whole trasnaction is complete in several years.
Wise Up people!

Posted by: Jeff | October 9, 2008 3:50 PM

What it comes down to is that if these people are not punished they will continue to take advantage. If our government isn't taking action, maybe the people should. Our founding fathers didn't sit by and complain while the British aristocracy walked all over them. They said "If you think we're paying these taxes, you've got another thing coming." And when it came down to it, they waged war. I'm not saying overthrow the government. But what if Americans stopped paying their taxes? What if the people who planned the party met up with the business end of a baseball bat? The problem is that the goverment and wall st just don't fear the people anymore.

Posted by: John | October 9, 2008 3:57 PM

This response from AIG’s PR Department is untrue.

“The assets of the subsidiaries? In most cases, the subsidiaries are
regulated, required to maintain dedicated reserves to make sure we can pay customer claims. That’s why we can’t just reach down and take money away from them,” he said.

UNTRUE!

Although most of the AIG subsidiaries are regulated by FINRA and the SEC and those regulatory agencies do require the subsidiaries to maintain net capital requirements, that is completely different from maintaining dedicated reserves to pay death benefit claims.

It is true that life insurance companies (the property and casualty arm of AIG) have to maintain assets to pay death benefits but most of the
subsidiaries, and all of the ones throwing these parties, are NOT life
insurance companies. Consequently, these entities are NOT required to maintain reserves. Most of the subsidiaries are either manufacturers of variable annuity investment products like AIG Sunamerica or distributors of general securities products like FSC Securities (whose conference begins next week)

The variable annuities manufactured and sold by these subsidiries do pay death benefits but they are not life insurance and investment risk is held by the client, not AIG. Plus, the death benefits that are paid on a variable annuity is miniscule in comparison to standard life insurance policies so reserve requirements are not really an issue.

But more importantly, the airline leasing and FSC Securities divisions are certainly not life insurance entities and are not required to maintain reserves for claims. FSC is nothing more than an army of stockbrokers!

In other words, AIG absolutely could have reached down and pulled some money from either of those two entities and many other non life insurance subsidiaries.

They are hosting these parties to maintain the illusion that everything is okay at AIG but it simply is not true. While these parties are common throughout the industry, it should be noted that this assumes the company is in a sound operating condition as opposed to bordering on COLLAPSING!

Besides, while the timing of the spending isn’t in question, the simple fact remains that were it not for the rescue loan from the taxpayers, the CA conference(s) and all of these subsequent parties would not happen. Our money allowed AIG to continue on with those parties!!

The $85 Billion was originally to help AIG keep the lights on while they
could sell some assets. To date, nothing has been sold. At the
subsidiary level, AIG has reiterated in internal memos that is is
“…business as usual”. They believe they can just sell more insurance products to get out of this mess. Disgraceful.

And the official AIG explanation about rewarding “Top Producers” also is a deliberate distortion of the truth. Those “Top Producers” are, as AIG’s press release explains, independent insurance agents. That means those agents are appointed with more than one insurance company and can sell insurance products issued by competing insurance companies so if they sell a lot of insurance products, they would be eligible to go to MULTIPLE Top Producer conferences. If they sell enough policies from Allianz, ING, AIG, and Manulife, they would have been eligible to attend each of the Top Producer conferences thrown by Allianz, ING, and Manulife. Even if AIG had
exercised some discretion and cancelled their retreat, that would mean the salesmen only got to go to 3 conferences in 2008 instead of 4!

Oh, and has anyone not even thought about this entire concept of “Top Producer” for a second? That means that those “Top Producers” are being rewarded with a weeklong getaway because they sold a ton of insurance policies THAT WERE ISSUED BY A COMPANY THAT BASICALLY COLLAPSED!!! Prrof positive that AIG not only doesn’t care about the taxpayers who are now stockholders, they don’t care about their clients either!! ONLY the salesmen matter to AIG!

What was the additional $37 Billion for? Are hookers that expensive in the Half Moon Bay area?

Posted by: The Man | October 9, 2008 4:38 PM

Hey youRStuckOnStupid, you wrote "a MUCH deserved sales contest"! So what you're saying is that even though the fat insurance salesman earned $800,000 in annual commissions, the fat insurance salesman just HAD to have another shrimp cocktail at OUR expense?

You sir, are an idiot.

Posted by: The Truth | October 9, 2008 4:43 PM

Perhaps they should hold the next off-site meeting at Guantanamo Bay and not leave until they had reached into their own pockets and reimbursed the government for $700 billion.

Posted by: Tom | October 9, 2008 5:03 PM

On a travel note the St. Regis Monarch Beach Resort is located between San Diego (not San Francisco) and Los Angeles. The Ritz-Carlton Half Moon Bay is 30 miles away from San Francisco.

Let's at least get the locations right.

Posted by: ERS | October 9, 2008 5:19 PM

[Note: The previous poster is indeed correct. The text should have read that the St. Regis is between San Diego and Los Angeles. It has now been corrected. Sorry for the error.]

Posted by: Washington Post Travel | October 9, 2008 5:32 PM

If this is a standard of the industry then we need some kind of disincentives for it instead of just reacting to this one. We can fire people or fine people and that's maybe appropriate but the whole scene is a reproach on our competence and wisdom. It's even a greater reproach with so many people in true need in the world. To have these people living in this way.

Posted by: Gaias Child | October 9, 2008 5:35 PM

I'm just as annoyed by this as many of you...

But, does this really belong on the Travel Blog??????????????

Posted by: Niver | October 9, 2008 5:54 PM

The Washington Post and all the national media are running wild on a distorted story and it is sad the sheep we have that just say, "Damn them using our money."

The whole distorted version is "AIG Wall street execs sipping down wine, getting massages, while laughing at the tax payers expense."

Reality is no Wall Street Execs, no bailout money used, trip planned a year ago, people there were indepedent agents who qualified for a trip. YOu think this trip was too lavish? Please, I know many companies that blow this type of convention away.

Well, you may say, not on our dime. Again, it was not on your dime, it was already paid for and guess what, if you cancel the trip the agents write business with other companies and then more of your tax money goes to them

I really hope journalism gets punished for the innacuracies of this story. This is beyond rediculous.

Posted by: Jim | October 9, 2008 10:15 PM

Actually, yes, it does belong on Travel Log.

They cover issues related to travel. This is a high-end resort in the news, that has apparently treated this opportunity as marketing spin. If anything, this shows a little bit of the edge this blog used to have and I'm glad to see it. Travel (and luxury travel in particular) is an industry, and it's the job of this blog to cover it.

Yes, I'm angry over the whole thing. But hearing about the St. Regis and how they're using it as a marketing bonanza? That is travel news.

Posted by: Chasmosaur | October 10, 2008 1:35 PM

Whether or not the facts in this story are 100% accurate, the reactions I have read are very encouraging. Americans are starting to open their eyes and ask questions of these financial institutions. Let this be a warning to AIG that we now have our eyes on them.

Posted by: AudreyK | October 10, 2008 3:24 PM

According to the L.A. Times, this story IS accurate (and according to several other news publications).
"As it happens, congressional investigators released AIG documents earlier in the day showing that the company paid more than $440,000 for the event, including nearly $200,000 for rooms, $150,000 for meals, $23,000 in spa charges and almost $7,000 for golf outings. FOR THE RECORD: The Consumer Confidential column in Wednesday's Business section identified Joseph Cassano, the former head of financial products at American International Group Inc., as having held that position at Lehman Bros. Also, the company name is Lehman Bros. Holdings Inc., not Lehman Bros. Holding Inc."

Posted by: Tom | October 10, 2008 3:28 PM

When I was 16 and got into financial trouble, my mommy, aka: United States Government, took control of cards and made me properly manage my funds. Why didn't our gov. take all financial control of a company too irresponsible too manage it in the first place???????????????????????

Posted by: wardfuller1134 | October 10, 2008 7:34 PM

This event hosted by American General Life (owned by AIG) but AGLife is fiscally sound, small, REGULATED, yes, oversight (federal) in all states--the event was for independent life insurance agents who qualified for the work they did with the company over the past year or 18 months. The event was paid for by American General Life. It was NOT for "AIG EXECS" partying it up. Completely incorrect.
This story has been reported erroneously and is unfair to one of the most outstanding companies under the AIG umbrella (and there are about 60 or more.)
For those who say that the government "owned" AIG (and all companies in all 130 countries in the world under the AIG umbrella) then should the gov't not have issued a statement to all companies involved as to the parameter of any events, meetings, salaries, etc immediately as the loan was made? It's way more complicated than anyone realizes AND the story was reported totally erroneously (and it began in the congressional oversight meeting with Democrats and Republicans jumping to conclusions before finding out the facts.) From there it was a media frenzy...which continues and only hurts us all really.
You know, get the facts please...before judgements are made.

Posted by: Sam | October 10, 2008 8:13 PM

No one ever investigates before jumping to conclusions. Just read into this a little further (not this article - but plenty of others) and you will notice there were no AIG executives at this event. There were 10 AIG staffers (meeting planners, etc.) there, but no one from the executive office. The trip was for INDEPENDENT insurance reps who met certain sales thresholds. Basically incenting the insurance guy at "Joe's Insurance" down the street. They need to keep providing these kinds of incentives to independent reps because every other company does. If these reps stop writing new AIG policies and start writing new ING (or whomever) policies because they want a great incentive trip the INSURANCE SUBSIDIARY (which is totally separate from the rest of AIG) will become less valuable on the open market. You want it to be more valuable so when AIG sells it, they get more money for it in order to REPAY the LOAN given to them by the Federal Government. SHAME on the media for spinning this one 180 degrees -- but it sure did sell a lot of newspapers, which I suppose is good for the economy.

Posted by: alexandriarafts | October 14, 2008 7:52 PM

Years ago, I worked for the life division of a very large general insurance company. The life division was being sold off and closed down. We still went on a "Presidents Club" junket to a five star resort in Mexico. It was the same kind of deal as AIG. We still needed the top life producers to continue to sell our property/casualty products and to stiff them at the last minute, after promising the trip all year, would probably have cost more in lost business than we would have saved cancelling the trip. As AIG is an ongoing operation, you have to understand the mentality in the insurance agent community to know what a disaster it would have been to cancel the trip. That aside, the deposits on a business conference are not like cancelling at your local Courtyard and getting all your money back if you call by six. Had they cancelled, we'd probably all be up in arms over AIG spending $250,000 on a meeting that didn't take place (non-refundable airline tickets, room deposits, fully paid banquet charges, etc).

Posted by: Steve R | October 15, 2008 11:47 AM

Was the timing wrong? YES! Does it hit a raw nerve? YES! Is it standard practice in the insurance industry to reward independent agents with incentive trips? YES.

Alexandria's comments are right on target. Now is not the time for clients and agents to buy or sell away from AIG if we, the tax payers, ever wish to be repaid.

Our outrage should be directed to AIG's senior staff who created an environment that encouraged reckless behavior and that rewarded it with bonuses. Where is the press and public outrage for the change in the executive bonus program that eliminated the CDS's from the bonus equations. Isn't it great that the rules can be changed after the fact to make it appear that executives were due a bonus when the company was burning! It's a great example of an insurance underwriting concern; moral hazard. In this case - greed!

Posted by: John W. Cook | October 15, 2008 11:48 AM

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