October 7th, 2008, 12:35 pm · 11 Comments · posted by Teri Sforza, Register staff writer
Last week The Watchdog broke the story that, less than a week after the $85 billion federal bailout of American International Group Inc., its subsidiary, AIG American General, partied in style at the exclusive St. Regis Monarch Beach Resort.
But now we’ve got the bill, thanks to Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, which is grilling former AIG execs today on events that led to the federal intervention.
AIG American General spent:
* $147,302 for banquets
* $139,375 on rooms
* $23,380 for spa services
* $6,939 for golf
* $5,016 at the Stonehill Tavern
* $3,065 for in-room dining and the lobby lounge
* $2,949 for gratuities
* $1,901 at the Monarch Bayclub
* and $1,488 at the resort’s Vogue Salon
The Bloomberg wire service quoted Waxman as saying, “Average Americans are suffering economically Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation.”
Remember, you heard it here first.
There’s more billing detail from the St. Regis here. And colleague Dena Bunis’s report from the hearing here. The entire Bloomberg story follows:
AIG Spent $440,000 on Spa, Resort After Bailout, Lawmakers Say
Oct. 7 (Bloomberg) - American International Group Inc. spent $440,000 on a conference at a California resort less than a week after an $85 billion government takeover, lawmakers said.
The bill from the St. Regis resort in Monarch Beach included $23,380 for spa services, according to Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform. Waxman led questioning today of former AIG Chief Executive Officers Martin Sullivan and Robert Willumstad as Congress probes events that led to federal intervention.
“Average Americans are suffering economically,” Waxman, a California Democrat, said in his opening statement. “Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation.”
The St. Regis, located on a bluff overlooking the Pacific Ocean midway between Los Angeles and San Diego, is “devoted to the pursuit of service and elegance,” according to its Web site. A “health and wellness” package costs $600 a night, with a two-night minimum.
The St. Regis expense “seems very inappropriate,” Willumstad told the committee. “I was totally unaware that there was any plan for any conference. Had I been aware of it I would have prevented it from happening.”
AIG, once the world’s largest insurer, disputed Waxman’s characterization of the conference. Spokesman Nicholas Ashooh said the event had been scheduled a year earlier by AIG’s American General life insurance subsidiary as a way to reward independent agents who sell the company’s products.
`Standard’
“This is very standard in the industry to reward the top 5 to 10 percent of top sellers,” he said. “In the insurance business, it’s as basic as salary as a means to reward performance. It was not AIG executives running away to California.”
New York State Insurance Superintendent Eric Dinallo told the committee there may have been some good reasoning behind what he called “profligate” spending. AIG might have been taking steps to stem an exodus of employees, which would have been the “absolute worst thing” that could have happened to the company at the time, he said.
Invoices obtained by Waxman’s committee showed that AIG spent $139,375.30 on rooms, $147,301.71 for “banquets,” and $1,488 at the resort’s Vogue Salon, which offers manicures, pedicures and hairstyling. The group spent $6,939.09 on golf, $2,949 for gratuities, $5,016.32 at the StoneHill Tavern and $3,064.71 for in-room dining and the lobby lounge.
Presidential Suite
The group booked the resort’s 3,100-square-foot Presidential Suite for $1,600 a night for five nights, a discount from the standard rate of $3,200 a night, a hotel document released by the committee showed. It also paid $1,075 in “no-show fees.”
“Have you heard of anything more outrageous?” said Representative Elijah Cummings, a Maryland Democrat, who plans to seek an investigation of the spending. “They were getting their manicures, their facials, pedicures, massages while the American people were footing the bill.”
The group occupied more than 60 rooms. Receipts provided by Waxman were dated Sept. 22 through Sept. 30. AIG was bailed out on Sept. 16.
The congressional committee is looking into who should be held accountable for the “financial excesses that led to the market breakdowns,” according to the committee’s Web site. Lawmakers yesterday lashed out at Lehman Brothers Holdings Inc. CEO Richard Fuld yesterday, peppering him for two hours with queries about excessive Wall Street pay and his failure to acknowledge the firm’s financial woes until it was too late.
-0- Oct/07/2008 18:19 GMT 10-07-08 1419EDT
More Watchdog:
Bastards!!
"the game of life of is not so much in holding a good hand as playing a poor hand well"
