Bailout still a bad idea.
The bailout was a bad idea. It was supposed to shore up failing financial institutions so that they could recover. Yet one of the things it has done is continually finance executive trips for one institution in particular.
After $123 billion in bailout that AIG has already had, they now want an additional $150 billion.
The package is better defined than before, but the increased potential burden on U.S. taxpayers is embarrassing for both the Fed and the Treasury Department. It underlines the need for regulation that catches any group that’s too big to fail.
In structural terms, AIG’s Bailout 2.0 looks like an improvement. It aims to solve AIG’s main problem – the cash bleeding from its $400 billion credit default swap portfolio – by unwinding the worst of the instruments completely in a kind of “bad bank” separate from AIG’s insurance businesses.
This is the same company which has been highly criticized for spending some of the bailout money on lavish retreats for executives. One of which has happened after AIG promised not to do that with our money. Now they still have their retreats but they just don’t mention AIG.
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 there were no AIG markers in order to minimize signage costs and to lower the company’s profile.
A hotel employee told ABC15, “We can’t even say the word [AIG].”
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, including Larry Roth, President & CEO, AIG Advisor Group; Art Tambaro, President & CEO, Royal Alliance Associates; Mark Schlafly, President & CEO, FSC Securities; Gary Bender, Senior Vice President, Investment Advisory Services; Bruce Levitus, Senior Vice President, Investment Advisory Services; and Stuart Rogers, Senior Vice President.
The ABC15 Investigators went undercover at the resort and found AIG executives having poolside meetings while drinking coffee and working out at the spa while other attendees were in conference rooms for seminars.
Ed Morrissey over at Hot Air has more on this.
Personally I think this smacks of fraud. Maybe since we are footing the bill for their bailout we can fire all of these executives without any of their “golden parachutes”. Maybe even jail time.
Is this the only company who is benefiting from the bailout that is doing this? I highly doubt it. First thing any CEO is going to do is ensure they are going to get their paycheck and perks. And you will be paying for it in higher taxes eventually.