The AIG retreat pictures: Why it's worse than you think
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."
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:
- $147,302 for banquets
- $139,375 on rooms
- $23,380 for spa services
- $6,939 for golf
- $5,016 at the Stonehill Tavern
- $3,065 for in-room dining and the lobby lounge
- $2,949 for gratuities
- $1,901 at the Monarch Bayclub
- $1,488 at the Vogue Salon
They golfed while Main Street burned.
Photos courtesy of Starwood Press Club press kits.
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