This one speaks for itself. Only question: arrogance or stupidity ?
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After Bailout, AIG Executives Head to Resort
Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000. The executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.
“They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills,” thundered Rep. Elijah E. Cummings (D-Md.), of the executive retreat at the Monarch Resort.
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In March 2008, when the company’s compensation committee met to award bonuses, Chief Executive Martin Sullivan urged the committee to ignore those losses, which should have slashed bonuses. But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of over $5 million. The board also approved a new compensation contract for Sullivan that gave him a golden parachute of $15 million.
Joseph Cassano, the executive in charge of the company’s troubled financial products division, received more than $280 million over the last eight years. Even after he was terminated in February as his investments turned sour, the company allowed him to keep up to $34 million in unvested bonuses and put him on a $1 million-a-month retainer. He continues to receive $1 million a month.
http://www.campaignmoney.com/political/contributions/joseph-cassano.asp?cycle=08
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In Dec. 2007, PricewaterhouseCoopers, AIG’s auditor, told the company in March 2008 that the “root cause” of AIG’s problems was that people assessing risk did not have enough access to the financial products division, where the risky investments originated. PWC warned Sullivan that the company “could have a material weakness relating to these area.” Still, Sullivan expressed confidence to investors.
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Thanks to SMH & JMH for the feed.
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