What Was AIG Thinking?

Rep. Elijah Cummings is fuming over AIG's recent $343,000 conference in Phoenix.

Yes, this is the same AIG that we, the American taxpayers, bailed out with almost $150 billion. So at the same time AIG is begging for help from the government, it's booking rooms at the Pointe Hilton Squaw Peak resort in Phoenix - complete with a spa, fitness center and other amenities.

Now, of course it would be a little odd if this asset manager event was held at the Motel 6 instead, but there's plenty of firestorm over the fact that the conference was so expensive.

"What bothers me the most is that AIG has come to the Congress and said 'look, we are drowning, we are on our last breath' and Congress bails them out at one point to the tune of $86 billion," plus another $40 billion on Monday, Cummings, a member of the House Oversight and Government Reform Committee, said. "At the same time, they're doing what they've been doing all along, going to these lavish resorts and partying."

AIG, for its, part, said about 90 percent of the bills were paid by sponsors, leaving only about $23,000 to be paid by AIG. AIG CEO Edward Liddy will be on "Larry King" tonight. You can read AIG's entire statement released today after the jump.

"I've got people that live in my district .. that live on $23,000 a year," Cummings said. "They don't get it, they just don't get it."

The Web is full of videos from every-day people across the country peeved about the AIG bailout. A common theme is that these average Joes, if you will, are incredulous at the bailouts and the actions by the financial companies. Here's one:

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The fact that by the end of the year, 1.1 million Americans will have run out of their unemployment benefits - and the bad economic news coming out almost daily from Wall Street or Main Street America - should send enough of a message to AIG to tone down the glitter.

"This is like the Titanic going down ... these people are asking us to rescue them ... but they're still playing their music, they're still dancing," he said, taking a swipe a big bonuses that traditionally are the norm on the Street. "I've got people who won't even get a dime at Christmas, won't even have a Christmas."

Local ABC affiliate KNXV-TV in Phoenix reports that AIG made significant efforts to disguise the conference, making sure there were no AIG logos or signs anywhere on the property. An AIG spokesperson said that was to minimize signage costs and to lower the company's profile. One station reporter even tracked down AIG officials at the conference, to get their responses on camera.

A hotel employee told the TV station, "We can't even say the word [AIG]."

Let's give AIG some credit.

After all, it did cancel an appearance by hall of fame football quarterback Terry Bradshaw as a motivational guest speaker, whose services would have commanded at least a $40,000 fee.

Here's the AIG statement released today, attributed to Liddy:

"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 cancelling 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.


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