U.S. Representative Paul E. Kanjorski Wants AIG To Reimburse Money

10/16/2008 03:29:00 AM

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070905_kanjorski6 Seems the Attorney General of NY isn't the only one who's after AIG these days.  U.S. Rep Paul E. Kanjorksi (D- said AIG executives who spent lavishly on a junket at St. Regis Resort in California should be forced to reimburse the company.

"You've got all of America scared to death, thinking do we have enough money to give to these organizations, should we bail them out?," he said.  "We're trying to build faith. ... And here these clowns go out and do something like this.  It's just unbelievable.  It is appalling to me.  Why aren't they sensitive enough to say, 'Damn, we just took $85 billion of taxpayers money; let's cancel everything that's wasteful at all' and be as stringent until they pay the money back."

Kanjorski sent a letter Thursday  (October 6th) to Federal Reserve Board Chairman Ben Bernanke asking him what steps he would take to recover the $443,000 recently spent by AIG executives on spa treatments, golf, ocean-view rooms and surfing lessons at the St. Regis Monarch Beach Resort.  Kanjorski called the junket "appalling."

In the letter Kanjorski states:

"The Federal Reserve must therefore take immediate action to reclaim every penny spent by AIG at the St. Regis Monarch Beach Resort.

"To think that AIG could turn to the Federal government in a "desperate need" for funds to continue its very existence and then turn around a few short days later and spend $443,343.71 on spa treatments, golf rounds, ocean view rooms, and surfing lessons is simply appalling.  It defies logic, and it demonstrates a lack of common sense.

"The facts regarding the event at Monarch Beach as presented by AIG's Chairman and Chief Executive Officer Edward M. Liddy in a recent letter to Treasury Secretary Paulson that "not a single corproate executive from AIG headquarters attended" and that the event was held by "one of AIG's insurance subsidiaries" for "independent life insurance agents - not for AIG employees" and that such trips are "standard practice" are all irrelevant.  The only relevant facts are that AIG sought government help for its very survival, received this help under extraordinary conditions, and still decided it was appropriate to send some of its key money-makers and their friends and family on an all-expense paid vacation at a lavish resort. [...]

"Like the hard-working middle class American families now postponing, delaying, and canceling their dream vacations to Disney Land as a result of the current economic crisis, AIG's executives, workers, representatives, brokers, and agents must also learn to sacrifice.  AIG must cut back on its extravagant junkets to ocean-side hangouts, desert spas, mountain ski resort, gambling casinos, and exclusive golf courses. [...]

"While the small businesses and towns around the country suffer from a lack of credit, the corporations receiving government assistance cannot be allowed to squander hundreds of thousands of dollars at the beach, in a cocktail lounge or out on the green.


Kanjorski asked Bernanke to impose the reforms on executive pay at AIG, which were included in the bailout bill last week, and to prevent repeats of the junket. 

Kanjorkski additionally said he is "troubled about further reports in the media that AIG plans to go ahead with similar exclusive holiday excursions at places like the Ritz-Carlton in Half Moon Bay, Calif., [which was canceled last week], and the Atlanta Marriott Marquis in the weeks ahead."

Kanjorski posed the following questions to the Fed, and asked for answers to the questions no later than October 16.

  • What actions does the Federal Reserve plan to take to investigate these matters and reprimand officials at AIG for the decision to proceed with the Monarch Beach event?
  • How will the Federal Reserve seek reimbursement from AIG, its executives, and other appropriate parties to compensate the American people for the Monarch Beach trip?
  • How does the Federal Reserve plan to prevent AIG and similarly situated companies from hosting extravagant junkets and profligate parties in the future?
  • Will the Federal Reserve apply the same standards to AIG regarding executive pay, golden parachutes, and faulty bonuses as provided for in the new Troubled Assets Relief Program administered by the Treasury Department?  If so, when?

The entire text of the letter can be found on Congressman Kanjorski's website.


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