Round Two

[ceebeegee]

Executives at another financially troubled firm--one that was bailed out by you and me, John & Jane Q. Taxpayer--rewarded themselves handsomely while their company's finances were swirling down the toilet. Formatting is mine.

A week after the insurance giant, the American International Group, received an $85 billion federal bailout, its life insurance subsidiary, AIG General, held a weeklong retreat for its top sales agents at the exclusive St. Regis Resort in Monarch Beach, Calif. Expenses for the week, lawmakers were told, totaled $442,000, including $200,000 for hotel rooms, $150,000 for food and $23,000 in spa charges.

A week! A week after coming to us, hat in hand, begging for taxpayer funds, they are enjoying themselves at expensive hotels with SPA charges. A week later, my friends!

In addition, the former A.I.G. executive who led the London-based division whose implosion is largely blamed for the insurance giant’s downfall, Joseph J. Cassano, continues to receive $1 million a month from the company, on top of the $280 million he received in the last eight years.

And even after A.I.G. reported $5 billion in losses in the final quarter of 2007, its chief executive at the time, Martin J. Sullivan, argued before a compensation committee that executives should receive performance bonuses. He received $5 million.

This is just--unbelievable. Keith made a remark yesterday about the French Revolution--I was actually thinking the same thing. This is the sort of inflammatory, provocative attitude and behavior that leads to revolution, literal and otherwise. You really can understand how maddened the Russian peasants and the Jacquerie must've been. Hey, if the corporate culture means rewarding top executives no matter how badly the company tanks--well, I don't have to invest in that company, I don't have to buy that stock. And believe me, I won't. Why the hell would I reward your stupid decisions? But when you come to me asking for money, for a bailout and THEN you waste that money, you spend it on yourSELF--there are no words for such appalling behavior. They are no better than robbers. How can Congress allow this? Did they not put any restrictions on this money? Where is the oversight, the regulation? Is this just a money grab? How dare they?

These people are worthless, contemptible creatures.

“This unbridled greed, this callous abuse of trust of hard-working Americans’ savings is just so disgusting it is hard to put into words, and the anger level in America is coming, as it often has, at Wall Street," Representative Mark Souder, Republican of Indiana, said.

Call it like it is, brother.

Comments

[dje2004.livejournal.com]

And you know that the only way these people will ever be punished is if something akin to the French Revolution breaks out here, and that happening would be worse than if they went unpunished.

[minstrel70.livejournal.com]

To be fair, the retreat was almost certainly planned and paid for months in advance, and it's doubtful cancelling it would have recouped much of the expense. AIG, unlike Fannie and Freddie and Bear Stearns and Lehman, is more a victim than a perpetrator in this mess, and my understanding of how they went down is that it was swift and unexpected. They were losing money for some time, but positioned to handle it (they thought), until a large portion of their assets was rapidly devalued over the past month.

Also worth noting: as an insurance company, AIG falls under a lot of regulation. That was actually part of the problem. They are required to have assets in some proportion to their liabilities, and as their assets deteriorated, they were caught short.

The $85 billion "bailout" of AIG is not a no-strings cash transfer, either. It's a loan, and the Fed has an 80% ownership stake in the company as collateral, in the form of preferred shares. So the taxpayer stands to lose very little on AIG. Shareholders, however, got pillaged.

Obviously, it doesn't look very good, but I think AIG is in a different category than much of the other stuff going on.

[ceebeegee.livejournal.com]

*grumble* Okay, thank you for the insight, and you make some very good points that reduce my fury somewhat.

But the spa expenses? As much as I imagine they may have wanted massages and facials during these troubled times, it looks BAD.

[dry-2olives.livejournal.com]

Yes, but they skipped the champagne room at the strip club and opted only for lap dances.

[minstrel70.livejournal.com]

I totally agree, it looks bad. Maybe the money couldn't have been recovered, but the proper thing to do under the circumstances would have been to eat the non-refundable expenses and forego the junket, stay home and work on the mess.

I think AIG will survive this, though, and that in two or three years the taxpayers will be whole and the move will be seen as a wise decision.

The other ones...well, very hard to say.