AIG Caught In Their Towels

In the article “As America stews, AIG’s big shots settle for a soak” by the Austin American Statesman, the author reveals the companies’ excessive spending on failure executives. The recent bailout for $700 billion of taxpayers’ dollars to bailout the failure lending companies to try to save the economy, has already come up misspent. The company AIG has spent $442,000 on its failing employee’s to “motivate and educate” them at a ritzy retreat known as the Ritz-Carlton. The previous month they spent $23,000 for spa services at St. Regis Resort in Monarch Beach. The first loan that was released to AIG was for $85 Billion. After these events the Federal Reserve still released another $37.8 Billion to AIG. This is exactly how big businesses get away with whatever they want. The new CEO, Edward Liddy, claims that the meetings were planned months before AIG received the loans from Federal Reserve. The author states that AIG continued to pay “the head of that money-losing unit, Joseph Cassano, $1,000,000 a month in consulting fees after he left the firm.”

To me the idea of poor money management coming from a loan company sounds absurd. Are they saying that when they decided to make these expensive “educational meetings” they were unaware of their financial problems? If someone was claiming bankruptcy and they went on a cruise right before, would they not be questioned? This is exactly what happens when company executives aren’t held accountable for the actions. The government owns 79.9% of AIG according to the loan rules. It will be interesting to see if any punishments are enforced upon those who are accountable. When I read about the bailout I knew this would happen. I don’t know all the details on how the companies are reporting their expenditures to the government, but apparently they don’t have tight enough regulations. If all AIG receives is a scolding from congress, then similarly we should start scolding criminals instead of sending them to jail. The company should have to pay back the money spent on these retreats and those in AIG who orchestrated these events should serve jail time or at least be fired. It is depressing to think that our government is at such mercy to these corrupt companies that they can test their boundaries. The presidential candidates should take an aggressive stance towards matters such as this in order to restore Americans’ morale in their government.