The media is making hay over AIG executives participating in a retreat at the St. Regis Monarch Beach after being taken over/bailed out by the federal government.
And it doesn’t look good, I suppose appearances do matter. But most of the criticism misses the mark.
The conference was booked long before the bailout. Sure, the hotel bill (including payments by the hotel on behalf of the event to other vendors) was $443,000. But AIG had already provided a $403,000 deposit. They couldn’t just cancel, they’d have no doubt owed most of cost of the event if not the full expected cost, anyway.
And in fact, it sure looks like executives stayed away — $58,000 (30%) of the hotel room charges were for attrition, meaning that they had committed to many more participants than ultimately actually attended.
Now, sure, $25,000 at the spa and salon and $7000 for golf doesn’t look good. I’ll give critics that. And $8,000 in room service, lobby lounge, and tavern was probably unnecessary.
But the event itself was a foregone conclusion, many did stay away, and AIG wouldn’t have really saved much by cancelling the whole thing once they were going under and getting bailed out. It’s too bad the media doesn’t understand hotel contracts or for that matter how to read a master bill (.pdf)
Thanks for explaining the St. Regis bill. I looked at the bill yesterday through a link on Joe Sharkey’s blog and I didn’t know what the $58,000 attrition line meant.
Saved much?
Man, they are iditos for even going and goign to a second one. Bad PR after receiving for another $38 BIllion on top of the $85 Billion – yes, those are B’s not M’s.
“AIG, it seems, remains unrepentant. The Los Angeles Times reported Thursday that company still plans to hold a three-day event at the Ritz-Carlton Resort in Half Moon Bay, CA., next week that will see 50 AIG employees in attendance. An AIG spokesman told the LA Times that the event is an annual affair. “It’s a key meeting,” he said.
AIG was threatened with bankruptcy before the government stepped in on September 17 with an $85 billion loan facility in exchange for a 79% stake in the company. The Fed has loaned AIG an additional $38 billion this week.”