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Executives at bailed-out AIG stayed at $500 a night Californian resort | Business | guardian.co.ukExecutives at bailed-out AIG stayed at $500 a night Californian resort
A week earlier the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing
The world's largest insurance company, AIG, spent $440,000 (£250,000) on a lavish corporate retreat at one of California's top beachside resorts just a week after accepting an $85bn emergency loan from the US government to stave off bankruptcy.
Details of the getaway emerged at a congressional hearing today where lawmakers expressed outrage at AIG executives "wining and dining" at the height of a financial crisis.
An invoice from the St Regis resort in Monarch Beach, south of Los Angeles, shows that AIG spent $139,375 on rooms, $147,301 on "banquets", $23,380 on spa treatments and $6,939 on golf at an eight-day company event which began on September 22.
A week earlier, on September 17, the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing due to vast liabilities on risky financial insurance policies.
"Average Americans are suffering economically," said Henry Waxman, chairman of the House oversight committee. "They are losing their jobs, their homes and their health insurance. Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation."
Set in 172 acres of grounds on a bluff overlooking the Pacific ocean, the St Regis resort describes itself as "Tuscan inspired". Rates for its 325 rooms are typically upwards of $500 a night and the travel guide Fodor's gives the place a rave review, saying: "Exclusivity and indulgence carry the day here; you can even have someone unpack for you."
An AIG spokesman said the event was to entertain independent insurance salesmen of AIG American General - one of the company's main US operations which offers life, health and accident policies.
"It was a recognition event for independent agents of AIG American General who distribute insurance policies," said the spokesman. "It was planned months ago."
In written evidence to Congress, AIG's former chief executive, Robert Willumstad, blamed an "unexpected and unprecedented market-wide crisis of confidence" for the company's financial predicament.
AIG wrote off more than $50bn in unrealised losses on complex mortgage-related instruments such as credit default swaps. But Willumstad, who stood down as a condition of the federal bail-out, blamed mark-to-market accounting rules for accentuating the impact of the company's exposure, prompting downgrades by credit rating agencies.
"Looking back at my time as CEO, I don't believe AIG could have done anything differently," said Willumstad. "The market seizure was an unprecedented global catastrophe."
A week earlier the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing
The world's largest insurance company, AIG, spent $440,000 (£250,000) on a lavish corporate retreat at one of California's top beachside resorts just a week after accepting an $85bn emergency loan from the US government to stave off bankruptcy.
Details of the getaway emerged at a congressional hearing today where lawmakers expressed outrage at AIG executives "wining and dining" at the height of a financial crisis.
An invoice from the St Regis resort in Monarch Beach, south of Los Angeles, shows that AIG spent $139,375 on rooms, $147,301 on "banquets", $23,380 on spa treatments and $6,939 on golf at an eight-day company event which began on September 22.
A week earlier, on September 17, the Federal Reserve had to extend a huge credit line to AIG to keep the troubled firm from collapsing due to vast liabilities on risky financial insurance policies.
"Average Americans are suffering economically," said Henry Waxman, chairman of the House oversight committee. "They are losing their jobs, their homes and their health insurance. Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation."
Set in 172 acres of grounds on a bluff overlooking the Pacific ocean, the St Regis resort describes itself as "Tuscan inspired". Rates for its 325 rooms are typically upwards of $500 a night and the travel guide Fodor's gives the place a rave review, saying: "Exclusivity and indulgence carry the day here; you can even have someone unpack for you."
An AIG spokesman said the event was to entertain independent insurance salesmen of AIG American General - one of the company's main US operations which offers life, health and accident policies.
"It was a recognition event for independent agents of AIG American General who distribute insurance policies," said the spokesman. "It was planned months ago."
In written evidence to Congress, AIG's former chief executive, Robert Willumstad, blamed an "unexpected and unprecedented market-wide crisis of confidence" for the company's financial predicament.
AIG wrote off more than $50bn in unrealised losses on complex mortgage-related instruments such as credit default swaps. But Willumstad, who stood down as a condition of the federal bail-out, blamed mark-to-market accounting rules for accentuating the impact of the company's exposure, prompting downgrades by credit rating agencies.
"Looking back at my time as CEO, I don't believe AIG could have done anything differently," said Willumstad. "The market seizure was an unprecedented global catastrophe."
