AIG holds another lavish retreat

November 11, 2008 10:46:59 AM PST
American International Group Inc. on Tuesday defended itself against a media report of a sales meeting held at a luxury resort in Phoenix last week, saying the event was an "essential training meeting."

ABC News reported details of the event late Monday, the same day the U.S. government announced a restructuring of a bailout plan for the insurer, boosting aid to the company to around $150 billion -- even after the company said months ago it would stop "all nonessential conferences, meetings and activities that do not clearly maximize value and service given the current conditions."

"We reviewed this one. This one did not slip by," AIG spokesman Nick Ashooh said Tuesday. "Some of the things we've done in the past certainly can be criticized, but this was a totally legitimate event that wasn't even for AIG employees."

Company officials said the meeting, held at the Pointe Hilton Squaw Peak Resort, was a sales training and education conference for about 150 independent financial advisers in its AIG Advisers Group.

"It is essential for AIG to conduct seminars of this kind to keep independent financial planners abreast of investment products and services including those offered by AIG," AIG Chief Executive Edward Liddy said in a statement.

While some AIG employees were present, the cost was "minimal" to AIG, with more than 90 percent of the event paid for by attendees or by sponsors, Ashooh said.

"It's the way we do business. We have to hold these events," he said. "You have to hold them somewhere."

Financial planners were responsible for generating almost $200 million in revenue this year for AIG as of Sept. 30, the company said.

In recent months, AIG has come under fire for picking up a $440,000 tab for a weeklong retreat at the posh St. Regis Resort in California for top-performing insurance agents, just days after the U.S. government stepped in to save the company with a $85 billion taxpayer-funded loan. AIG also spent $86,000 for a hunting trip in England as the faltering company reaped another $37.8 billion in taxpayer funded loans.

Lawmakers investigating AIG's meltdown said they were enraged that executives of AIG's main U.S. life insurance subsidiary spent $440,000 on the retreat, complete with spa treatments, banquets and golf outings.

Company officials said the activities had been planned months before the bailout. On Oct. 10, the company pledged to do everything possible to end such extravagances and has since agreed to freeze millions of dollars in compensation and bonuses for former executives.

The most recent event held in Phoenix, came as the government announced new financial assistance to AIG, including pouring $40 billion into the company in return for partial ownership.

Liddy said the company conducted a "top-to-bottom review of all expenses of the Phoenix meeting in advance and found that it was consistent with my Oct. 10 directive."

The company has canceled more than 160 events, since, AIG officials said.

"This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the U.S. taxpayer," Liddy said.


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