AIG Asks For More Money, Again, Has Another "Conference" for 150 in Phoenix, Congressman Wants AIG CEO To Resign Now. [Drinks, Food and Spa included]
AIG obviously thinks they don't have to follow the law either, in typical banker arrogance. AIG has been busted so many times for "executive retreats", "conferences", and "parties" after being bailed out by the Feds. In fact, they were threatened by the NY Attorney General, that if they didn't stop, they would find themselves in court. Liddy said that he would demand that all money that had been used for these "retreats" paid back, and promised to amend their ways by released new policies.
During all of this AIG has asked for more and more money, to the point where they wanted the terms of their loan altered. Well the Fed's gave AIG what they wanted, and the previous $85 billion eight-week-old rescue deal, plus the additional $38 million four-week-old plan for AIG are gone and replaced with a new $150 billion plan, tapping into funds that were originally set aside for banks, not investment companies.
AIG, THE BLACK HOLE
According to the AFP, under the revised program for AIG announced Monday, the Treasury will replace the entire previous package plan with a larger, longer-term $152.2 billion dollar program, including 60 billion dollar five-year loan and $52.2 billion to buy up distressed securities. The Treasury will have to use $40 billion to buy preferential shares in the company with money from the Troubled Asset Relief Program (TARP)
In the new program, the previous $85 billion dollar loan is cut to $60 billion, and a lower interest rate is set, but its duration is extended to five year from two. Another $52.5 billion is provided to purchase distressed assets from the company, including $30 billion for collateralized debt obligations and $22.5 billion for residential mortgage-back securities. And the government will use $40 billion in TARP funds to buy AIG preferential shares, which will carry a high interest rate of 10 percent.
Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke "have determined that a failure by the firm would cause damage to our financial system, the US economy and the global economy," White House spokeswoman Dana Perino told reporters.
AIG was caught holding another "party" on the taxpayers dime, this one costing approximately $343,000, and they tried to hide it. "AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property," KNXV reported. A hotel employee told KNXV reporter Josh Bernstein, "We can't even say the word [AIG]" while signs stated "AMC 08" with AMC standing for "Asset Management Conference".
An AIG news release speaks of the event which was hosted by AIG Advisor Group.
AIG Advisor Group will hosts its 2008 Asset Management Conference (AMC) at the Point Hilton Squaw Peak hotel and conference facility in Phoenix, Arizona on November 5 - 7, 2008. Nearly 150 financial planners, who operate their own independent businesses and are not AIG employees will participate in the event. Financial planners attending the meeting represent 23% of total AIG Advisor Group revenue as of September 30, 2008.
The goal of the AMC is to provide an educational, training and networking forum for financial planners. The AMC meeting agenda includes seven general sessions, twenty-two classes, and two working lunches. Topics range from alternative investment products and advisory services strategies to business-building programs, productivity tools, and portfolio management.
Eighteen participating product sponsor firms are underwriting $320,000 of the total meeting cost of $343,000. The company's portion of the total meeting costs is under $25,000. Additionally, financial planner attendees are responsible for their travel-related expenses, registration fee ($199), and guest registration fee ($250).
AIG Advisor Group has conducted a top to bottom review of all AMC meeting expenses to validate that only expenses required to ensure the meeting's success are incurred. Consistent with that review, the company determined that the appearance of Terry Bradshaw as a guest speaker was not required. Although costs related to his appearance were to be paid by a product sponsor, his appearance has been canceled.
- AIG SunAmerica Mutual Funds [AIG]
- Russell Investments
- Brinker Capital
- Investment Advisory Services
- Curian Capital
- Dimensional Fund Advisors
- eMoney Advisors
- Financial Guidance
- Genworth Financial
- Genworth Financial
- Hanlon Investment Management
- Invesco AIM
- Icon Advisers
- John Hancock
- Lockwood Advisors
- Rochdale Inestment Management
Reporters for ABC 15 (KNXV) caught AIG executives on hidden cameras poolside and leaving a spa at a three-day event at the Pointe Hilton Squaw Peak Resort. According to the report, the conference at the resort included many senior managers at AIG.
While there, AIG execs were having poolside meetings while drinking coffee and working out at the spa while other attendees were in conference rooms for seminars. Also seen where half a dozen execs going to dinner at McCormick & Schmick's at the Camelback Esplanade, racking up a bill of more than $400 for drinks, appetizers, and meals and being chauffeured around in a limo.
In addition to the nearly 150 independent financial planners in Phoenix for training and education, the conference attendee list was a 'Who's Who of AIG leaders' according to KNXV. It included:
■ Larry Roth, President & CEO, AIG Advisor Group;
■ Art Tambaro, President & CEO, Royal Alliance Associates;
■ Mark Schlafy, President & CEO, FSC Securities;
■ Gary Bender, Senior Vice President, Investment Advisory Services;
■ Bruce Levitus, Senior Vice President, Investment Advisory Services;
■ Stuart Rogers, Senior Vice President
The TV station confronted AIG employees before they departed Sky Harbor Airport on Friday morning, and in a video do not seem amused. When asked if Roth and Tambaro minded being asked a few questions about the conference, Roth replied "We absolutely do [mind].' Roth and Tambaro referred all questions to AIG's PR department while they walked into First Class boarding, yet John Pluhowski stated that Roth and Tambaro flew round-trip in coach class.
Nick Ashooh, a company spokesperson, confirmed AIG instructed the hotel to make sure there were no AIG signs or mention of the company by staff. AIG defended themselves by Ashooh stating, "We're trying to avoid confrontation, keep our profile low. Some of our employees have been harassed."
AIG also told KNXV that AIG was paying for the conference and then would be reimbursed by the sponsors.
CUMMINGS NOT AMUSED, CALLING LIDDY TO RESIGN
Elijah E. Cummings (D-MD) who sits on the Committee on Oversight and Government Reform is calling for AIG's CEO to resign. "A person who is drowning then doesn't jump up and start partying. And that's the problem. I think that we made it very clear to them that we do not want one dime of taxpayer money being spent on these junkets."
Cummings wrote a letter to Liddy stating:
"Having received this assistance, which has been nothing less than a lifeline for AIG, you decided to continue to hold corporate parties as if nothing has fundamentally changed with your business." ... "That a firm already reliant on taxpayers' funding would organize such an event is outrageous. Even more shocking, however, is that this event was apparently also concomitant with AIG's request for billions of dollars in additional bailout funding from the U.S. taxpayers."
"... then the United States Congress - and the American taxpayers who have funded the rescue of your company - have the right to receive from you clear answers to the following questions:
1. Did AIG organize and/or allow any employees to participate in a corporate retreat in Phoenix, Arizona, in early November 2008? If so, what was the purpose of the event and how many AIG employees attended? Please also provide the schedule of continuing education classes provided to executives and indicate how many executives attended each session.
2. Were any product sponsors underwriting the costs of the event? If so, please identify these sponsors and the funding they provided.
3. What expenses did AIG incur in conjunction with the Phoenix event? Please itemize each expense.
4. Also, please identify each of the 160 planned events canceled on or after October 30.
AIG ISSUES STATEMENT IN LIGHT OF EVENTS
Dated Nov 11, 2008 [PDF]
"Recent news reports have grossly mischaracterized an American International Group seminar for 150 independent financial planners held in Phoenix last week.
The financial planners are not AIG employees. In addition, the cost to AIG for this event was minimal. More than 90 percent of the costs were paid either by sponsors or by the independent financial planners themselves.
It is essential for AIG to conduct seminars of this kind to keep independent financial planners abreast of investment products and services including those offered by AIG. The financial planners are responsible for generating almost $200 million in revenue this year for AIG as of September 30th.
On October 10, I issued a directive to all AIG employees and subsidiaries to reduce expenses and conserve cash, including canceling all nonessential conferences or meetings, unnecessary travel and excessive overhead. Since then, we have canceled more than 160 events. We conducted a top-to-bottom review of all expenses of the Phoenix meeting in advance and found that it was consistent with my October 10th directive. This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the U.S. taxpayer."
- KNXV - AIG execs at posh Phoenix resort after $85 billion bailout.
- KNXV - Congressman wants AIG CEO to resign after Phoenix meeting.