First it was Lehman Brothers getting caught giving out millions in bonuses to executives even as they asked for a bailout from the government. Now it’s AIG throwing posh parties for executives after getting a bailout.
WASHINGTON – Days after it got a federal bailout, American International Group Inc. (AIG) spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company’s meltdown.
AIG sent its executives to the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85-billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.
The retreat didn’t include anyone from the financial products division that nearly drove AIG under, but lawmakers still were enraged over thousands of dollars spent on outing for executives of AIG’s main US life insurance subsidiary.
Under normal circumstances I don’t care, nor do I think it’s the government’s business, what a private company’s executives get in compensation and bonuses. I also think Congress summoning the executives of these companies being bailed out for a “ten minutes of hate” session in DC is a little absurd given that Congress is every bit as culpable as these companies in bringing about the current fiasco, if not more so.
But when a company takes a taxpayer-funded bailout they open themselves up to scrutiny from the public. And the behavior of executives at Lehman Brothers and AIG has been nothing short of obscene.
Yet they got what they wanted, didn’t they? A big, fat bailout from the taxpayers purchased through millions spent on lobbyists and political contributions for key members of Congress.
These companies shouldn’t have been bailed out. They and their executives should have been allowed to fail. But now they have been bailed out, and all the executives are sitting pool-side in cushy resorts resting easy with the knowledge that their cupidity and mismanaged businesses are safely in the hands of the members of Congress they’ve successfully bought off.