| Botnst |
10-08-2008 06:31 PM |
It turns out it was all a huge misunderstanding: It was really a BUSINESS conference! Of course!
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AIG says lavish event was mischaracterized
Wed Oct 8, 2008 4:40pm EDT
NEW YORK (Reuters) - American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz), a day after being criticized for a lavish event held just days after the insurer got an $85 billion government rescue loan, shot back on Wednesday saying the event was for independent life insurance agents, not its employees.
AIG drew fire at a congressional hearing on Tuesday for spending $200,000 on hotel rooms and $23,000 on spa services at an event lawmakers characterized as an executive retreat.
As lawmakers grilled former top executives, Rep. Elijah Cummings, a Maryland Democrat, said: "They were getting facials, manicures and massages, while the American people were footing the bill."
On Wednesday, AIG said the "business event," hosted by one of its subsidiaries, was for independent life insurance agents. It said the event was planned "months before" it received the loan last month, and no AIG executives from headquarters attended.
AIG's effort to correct the record on the event came after White House spokeswoman Dana Perino had added on Wednesday to criticism of the event.
"I understand why the American people would be outraged," she said at a White House briefing.
President George W. Bush did not intend to benefit industry titans when he approved the bailout of AIG and a wider $700 billion Wall Street rescue package, she said.
"Rewarding failure is something we have a very hard time swallowing," Perino added.
AIG said current Chief Executive Edward Liddy had written a letter to Treasury Secretary Henry Paulson to clarify the circumstances of the business event.
The company said Liddy assured Paulson that AIG now faces very different challenges, saying: "(W)e owe our employees and the American public new standards and approaches," and that the company is "re-evaluating the costs of all aspects of our operations..."
AIG said 10 employees from its subsidiary, AIG American General, attended the 100-guest event.
(Reporting by Jonathan Spicer, with additional reporting by Andy Sullivan in Washington; Editing by Tim Dobbyn)
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