Days after AIG received a $85 billion taxpayer bailout, it spent $440,000 hosting a posh corporate retreat at the St. Regis Monarch Beach resort. (click here to jump down to pictures)
AIG defended the expense, explaining that the retreat was for independent insurance brokers, not AIG employees. According to AIG:
This is very standard in the industry to reward the top 5 to 10 percent of top sellers. In the insurance business, it’s as basic as salary as a means to reward performance.
I'm not sure why this explanation is any better. AIG has a very sleazy record in their dealings with independent brokers. In 2004, AIG got busted for bribing brokers with illegal kickbacks to betray their fiduciary duty to their clients:
Marsh, an insurance broker, is supposed to find the best insurance policies for its clients from a wide range of companies. Instead it steered the policies to companies such as AIG that agreed to pay kickbacks.
It solicited phony competitive bids for insurance contracts to deceive customers into thinking there was real competition for their business. Marsh made $800 million on kickbacks in 2003 alone – over half its $1.5 billion profit. With a 40 percent share of the global insurance brokerage market, its fraud drove up prices for everyone.
After a series of investigations into these dirty deals, AIG agreed to pay a $1.64 billion settlement with the government. AIG apologized for these unethical business practices in 2006, stating that it will "provide transparency and fairness in the insurance markets."
I guess they didn't mean it in 2006, but I'm sure we can trust them this time!
About 100 brokers attended the AIG corporate retreat--that comes out to $4,400 per person. While not technically a bribe, it certainly comes pretty close in my book. Here breakdown of how AIG wasted taxpayer money and some pictures from the actual hotel:
They golfed while Main Street burned.
Photos courtesy of Starwood Press Club press kits.
I write a newsletter for about 200 people and have written a article about Americans opening their eyes to this financial crisis. I would love to feature these pics as a final note to the article. Contact me at lhard@bellsouth.net at your convenience..
GW Lawrence
You need to know the facts before you start criticizing these people. They are not employees of AIG. They are independent contractors. These meetings are standard in the industry. It has nothing to do with bribery. They are paid for largely by sponsors with little expense to AIG. These are completely standard and necessary in the industry and it is critical to reward the better producers. You know nothing about these types of meetings.
It's simple. Incentive trips are intended to be rewards for companies that are performing WELL! If a company is not doing well, find some other way to reward top performing employees and independent contractors Take them out for a nice dinner. Give them gift certificates for a massage and facial. Save the luxury junkets for when your company is doing well.
>They are paid for largely by sponsors with little expense to >AIG.
One can't go to the government with cap in one hand while the other is out stretched to "sponsors" to make it possible for you to keep partying as usual. This is just plain crazy.
>These are completely standard and necessary in the industry and >it is critical to reward the better producers.
Standard practice does not mean BEST practices. It's standard practices that got us into this mess in the first place.
If AIG would pay what they owe me in benefits and back-pay, after being shot in Iraq, I would have enough money to buy food for my family. As it stands now, we can no longer shop at discount stores because we cannot afford to buy food in larger quantities in order to save money. We squeak by only by eating cheap, high calorie, low quality food.
I am not alone. Just look up AIG and Contractors on the internet. The situation is much worse for some of my friends, who were also injured in Iraq.
