Bailed-Out Executives Already Living It Up On Your Dime
By Dave Gibson (10/04/08)
A little over a week after the American taxpayers were forced to give AIG an $85 billion bailout, AIG executives attended a lavish retreat at one of the nation’s most luxurious and expensive resorts.
On September 26, still basking in the glow of an $85 billion taxpayer-funded windfall, AIG executives could be seen sipping wine and strolling the grounds of the ultra exclusive St. Regis Monarch Beach Resort . They were there for a conference being held by one of their subsidiaries, AIG American General.
One would wonder why a company which less than two weeks earlier was facing financial ruin, would not make use of their own facilities. Surely, AIG must have conference rooms. I know that Holiday Inn does and a half dozen of their rooms could be rented for the price of one at the St. Regis. Of course, when someone else is paying for it (the American taxpayers)…Who cares?
The St. Regis Monarch Beach Resort located along the southern California coast, boasts many amenities which most of us will never see. But, let’s take a look at how our money is being spent for us:
St. Regis Executive Suite…$760.00 a night, comes with a “Resort View with Balcony, Butler Service, and Luxurious Marble Bathroom.”
St Regis Suite…$1295.00 a night, comes with an “Ocean View, Butler Service, Two Marble Bathrooms, Private Balcony/Patio with table and chairs.”
The resort also has an award winning spa, a private beach, a championship golf course, and several posh restaurants including the Mobil Four Star Rated Stonehill Restaurant which lists a short but exquisite menu featuring such things as Iranian Golden Osetra Caviar for $275 an ounce, and for those on a budget, a Caesar Salad for $14.
The St. Regis Resort not only caters to the elite amongst us, but to their dogs as well. The hotel offers a “Pamper Your Pooch Package.“ The St Regis describes the package on their website as follows:
“The package consists of an overnight stay in a Resort view guestroom, a personalized welcome letter to the pet, the exclusive St. Regis doggy bed, pet amenities including “Sniffany & Co.”, “Bark Jacobs”, “Dog Perignon”, or “Jimmy Chew” toys, personalized silver food and water bowls, an array of treats, biscuits, and bones, along with an issue of Hollywood Dog! Pricing for this package begins at $545 per night. (two-night minimum required).”
No word on if any of the AIG executives brought their pooches. However…Would it surprise you if they did?
AIG though, claims that the conference does not violate the terms of the taxpayer bailout and that the affair is not as bad as it seems. They claim that even though AIG American General is merely a subsidiary under parent company AIG, the luxury conference should be considered separate from AIG itself.
AIG spokesman Joseph Norton said: It‘s one of our viable businesses. They’re fully capitalized. They’re fine. It wasn’t a corporate kind of thing.”
Of course “they’re fine,” we just gave them $85 billion!
While it is disgusting to think of corporate executives who have become millionaires while running their company and their shareholders’ stock into the ground, now partying on our money, it is typical behavior for the leadership of AIG. That company’s former CEO Martin Sullivan’s salary for 2007 was $13.9 million. A few months ago, Sullivan was given a severance payment of $47 million.
Those incredibly excessive payments were being funneled to Sullivan, while the company was heading toward ruin, and while the AIG insurance salesman was making $37,000 a year.
Apparently, many AIG employees agree with my assessment. A few days ago, a large group of them filed a class action lawsuit in U.S. District Court for the Southern District of New York. The suit is aimed at 15 AIG directors and claims that their actions directly violated the Federal Employee Retirement Income Security Act.
AIG’s employees have lost millions in their retirement plans and under federal law can bring legal action personally against those AIG directors, who allegedly misled them.
In 2006, CEO Sullivan told his employees that he was “very comfortable with the size and quality of its investment portfolio," he claimed that their retirement plan was in good shape and continued to say so through the end of 2007. However, by February 2008, AIG announced that there subprime losses were $5 billion, which is four times the amount they originally claimed.
On September 16, 2008, AIG fell to $1.25 a share, which had been valued at $70.13 a share only months earlier.
A few years ago, AIG became the subject of fraud investigations by the Securities and Exchange Commission, the FBI, and the New York State Attorney General’s office. As a result, AIG paid a fine of $1.6 billion, and criminal charges were filed against some AIG executives.
The idea of AIG’s elite drinking champagne and nibbling on caviar while a great number of their employees are now faced with the reality that retirement will never come, and while most Americans now struggle to keep gas in our cars and food on our tables in these hard economic times is rather disgusting. The knowledge that these people helped cause this economic crisis and are spending more money on a party than many Americans make in a year, is outrageous. However, the fact that these elitists are funding their luxurious activities with taxpayer money is enough to make any American rethink his or her citizenship.
The similarities between this country today and pre-Revolutionary France are uncanny.
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