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Money | 03/04/2009 10:45 am

AIG Spending Bailout Cash on PR?

With four PR firms on its payroll, the giant insurer can’t fix its lousy image.
By The Staff at wowOwow.com
© Getty Images

Despite all evidence to the contrary, American International Group really does care about its public image.

The insurance giant, which recently received its fourth round of taxpayer bailout cash, has at least four public-relations firms on its payroll, breakingviews.com reports.

The firms include Kekst and Company, Sard Verbinnen & Co., Hill & Knowlton and Burson-Marsteller. The company also has its own in-house PR team. Specific services and costs were not disclosed.

Of course, it’s common for large corporations to retain PR firms in order to manage complex lines of communications with regulators, legislators and journalists, especially at a time of crisis. What’s less clear is how a group of high-profile spinsters allowed AIG’s top brass to look so bad.

Just weeks after crying poor to Congress and receiving its first $85 billion bailout, AIG executives blew $440,000 on a week-long corporate retreat at the upscale St. Regis Resort in Monarch Beach, CA. The company has since been scolded for another lavish junket in Phoenix, among other perks.

This week, AIG posted a $61.7 billion loss for the fourth quarter of 2008, the largest ever by a U.S. company. CEO Edward Liddy has blamed the company’s woes on former AIG boss Maurice "Hank" Greenberg. In response, Greenberg, who rejected a multimillion-dollar bonus last year but remains AIG’s biggest shareholder, is now suing his former employer for securities fraud.

Taxpayers, take heart — your money’s in good hands.

Read more about: AIG, Bailout, Economy, Funding, News, PR, Taxes, Taxpayers

42 Reader Comments (so far…) Sign In or Register to comment

DeBúrca obj

FormerJustice Promotes Web-Based Civics Lessons

http://www.ourcourts.org/

 

By DeBúrca obj on 03/04/2009 11:04 am
S.J. Morgan

This is a sticky issue…if the retreat was for corp exec’s than it is wasteful but if is for promotion, advertising or sales incentives than it may be money well spent to crawl out of the mess.

Also the money spent on those things stimulates the economy for the local economy of the region where it is held!

Some things are not as BLACK and WHITE and they seem and those firms have employees and overhead costs as well.

 

By S.J. Morgan on 03/04/2009 11:05 am
Libra Lady

Educap is a multibillion-dollar student loan charity run by CEO Catherine Reynolds. As CBS News Investigative Correspondent Sharyl Attkisson reported Monday night, Educap is under investigation by the IRS and Congress for alleged abuse of its tax-exempt status because it charges high interest on charitable student loans, and provides lavish perks with millions in compensation for Reynolds and her husband.

CBS News has obtained exclusive details of what may have been the biggest charity perk: use of Educap’s $31 million luxury jet, which costs thousands of dollars an hour to operate.

Investigators say for five years, Reynolds jetted friends, family and luminaries to faraway and exotic destinations that sometimes had little to do with the charity’s mission.

CBS News has learned that high-profile names on the Educap flight list include CIA Director Leon Panetta, former Sens. Tom Daschle and Ted Stevens, former FBI Director William Sessions and Chicago Mayor Richard Daley.

According to flight records, Panetta and Daschle, while not in public office, accompanied Educap’s Catherine Reynolds on flights to private business meetings not related to the charity…And records show Reynolds took Chicago’s Daley and his wife on 58 flights including ones to Turkey, Asia and Sweden.  (MM)

By Libra Lady on 03/04/2009 11:18 am
under stimulated

well—lets be clear about all of this…aig shouldn’t be given any more of our childrens and grandchildrens cash.

 and another thing…

 When will Obama ‘get it’ on earmarks?
By Examiner Editorial
- 3/3/09

As the nation faces its most severe recession since 1982, President Barack Obama apparently wants the American people to forget that he promised he would give them earmark reform if they elected him president, even if he had to go “line by line to make sure that we are not spending money unwisely.” It’s time for Obama to keep his promise.
However, administration officials - including Office of Management and Budget director Peter Orszag and White House chief of Staff Rahm Emanuel �" have been calling the earmark-laden spending bill needed to keep the federal government operating through September “last year’s business.” Only in Washington can a spending bill that requires the president’s signature today be yesterday’s business. Although the $410 billion bill contains nearly 8,600 earmarks totaling $7.7 billion, White House officials say President Obama will sign it anyway. Americans, Orszag says, should just “move on.”

But embattled taxpayers will not soon forget this latest illustration of Washington double-talk. Even Time Magazine, whose coverage of Obama’s campaign verged on rapturous, finally had to ask: “Does Obama have a double standard on earmarks?” The fact that the president bragged to a televised joint session of Congress that there were no earmarks in his $787 billion stimulus package, only to remain silent as House Democrats passed a bill with nearly 9,000 earmarks the very next day, answers Time’s question in the affirmative.

Because earmarks bypass the regular legislative process that forces projects to compete for the same dollars, most earmarks tend to be pure political pork. So earmarks in the current spending bill are just as likely to be wasteful as they were when Republicans were busy funding the “Bridge to Nowhere.” For example, there’s $1.8 million to manage swine manure in Iowa, $190,000 for a “Buffalo Bill Historical Center” in Wyoming, $2.2 million to study grape genetics in New York, $175,000 for “façade improvements” on a dilapidated theater in Pennsylvania, $162,000 for cricket control in Utah, and a total of $41.5 million for the presidential libraries of three former Democratic presidents: FDR, JFK and Lyndon Johnson. Taxpayers will be billed for all of it.

No wonder less than two months into the new administration, thousands of angry Americans have already participated in Tea Party protests all around the country. Obama said last week that he “gets it” on executive pay caps. It’s time he gets it on earmarks, too, and veto this ridiculously wasteful omnibus pork bill.
 

By under stimulated on 03/04/2009 1:10 pm
caj p
What people need to understand with this so called "pork" in this stimulus bill..that was put in there under Bush and he never signed it before he left office.  So all this nonsense about Obama and his "pork" projects are totally bogus, once again easier to shoot the messenger.  Where were all these Reps when that bill was being put together we wonder, did they not complain to Bush about all these earmarks in it or maybe just maybe it would have been alright if McCain has won!!!   So to keep harping on about these " pork" projects being Obama’s is just another excuse to make a fuss about something that was already there!!!  Obama by the way is putting forth new rules which will not allow any earmarks to be put into further bills, as I said earlier that previous bill was outlined by the Bush admin and was not Obama’s own bill.   By the way I think you should really change that photo with the banner saying "YES WE DID" !!!   Sorry about that!!
By caj p on 03/04/2009 1:35 pm
under stimulated
that’s a lame arguement—president present is now the leader of the "free world"..(hold on—i’m weak in the knees)—if he had any integrity what so ever—he’d veto the bill and re-write it without all the pork, like he promised in his campaign.
By under stimulated on 03/04/2009 1:53 pm
f p
And just how much of that "pork" put in the bill by our senators and congressmen? Plenty.
By f p on 03/04/2009 2:49 pm
Marjorie C.

caj p:  …once again easier to shoot the messenger. 

Are you trying to say that Obama would sign a bill that was put together by the previous administration (the Democratic Congress) six months ago without questioning the contents of it?  He has been reversing as much as he can George Bush’s policies, why not at least give a glance to this omnibus bill which he knows is loaded with pork.  Doesn’t matter who put it there, he has the veto pen in hand.    

By Marjorie C. on 03/04/2009 2:18 pm
caj p
If he had not signed off on this bill nothing would have got done, does it make him happy to have done so of course not but something had to be done.  That is why he has made it clear that any "NEW" bills that he writes in the future will NOT have any earmarks in them, that is what he want to eradicate from the old system.  So much unnecessary stuff shoved in there to placate buddies, it needed to be stopped.
By caj p on 03/04/2009 2:30 pm
Marjorie C.

caj p: So much unnecessary stuff shoved in there to placate buddies, it needed to be stopped.

Well, I’ll stand pat on this thought until we see what this bill actually accomplishes besides keeping the smells down in Iowa.  In any event, Obama has to start showing some leadership.  He’s nearly halfway through his first 100 days, we’ll give him a chance to prove he’s more than a rubber stamper.

By Marjorie C. on 03/04/2009 2:45 pm
caj p
That is kind of you to give him a 100 days to see how he fares…well we all know at least those who live in the real world that this economy is not going to be anywhere near solved in that time.  And to expect that it would be with the catastrophic mess it’s in would be totally unfair, but of course we are talking mostly about the Reps here and they will stick to that 100 day deadline regardless. Hence, Obama fails his 100 day test, would I be right in saying that??
By caj p on 03/04/2009 5:21 pm
Marjorie C.

caj:  I be right in saying that??

If Obama starts looking as if he understands the job and is willing to let go of his cronies, the Republicans will not have a chance against him.  However, if he continues to scare people, then the 2010 elections might be quite meaningful.  Already two and possibly three Democratic Senators are digging in their heels against this pork-filled budget he intends to rubber stamp.  These guys just might be listening to their constituents.  Right now, many Americans think this thing is out of control and are not willing to sit idly by while they lose everything.  This is not the era of the Great Depression where a lot of people did a lot of crying and doing without.  The grandchildren of the Great Depression cannot imagine going there. 

By Marjorie C. on 03/05/2009 5:12 am
Libra Lady

Marjorie…Good Morning…obama is being pulled both ways now….he either sides with some of the dems that are against the package or goes against princess pelosi and prince reid….what to do…what to do!!!

By Libra Lady on 03/05/2009 7:39 am
caj p
I don’t see Obama trying to scare people, he is just telling us the truth of the situation don’t you find it refreshing to hear a President speak the truth instead of trying to say things are hunky dory?  You talk about scaring people do you not think we have had enough of scaring the American people than we had under the Bush admin…terror …terror…terror every-time we turned around.  That was used to keep up the actions under way in Iraq we all know now was based on a lie….the situation we are in today is very real and are not scare tactics it’s the plain hard truth of the matter!!   This pork filled budget you keep talking about as I said earlier was done by Bush before he left office, it was not Obama’s budget originally and he had to placate those things in there to get this passed…it was not his first choice as he has made it clear he does not want that anymore when he passes HIS own budget and it will be transparent for all to see.  He is not trying to scare anyone here he is just telling us the truth it might not be want we want to hear but so what it’s the truth.  This whole mess did not come about in the last 5/6 weeks it’s been coming for a long time and Obama just got stuck with it and trying to clean the mess up is not going to work overnight and the decisions are not going to be easy they wouldn’t be easy for anyone and no President comes into office with a " How to be a President" Manuel it’s trial and error but to assume that he doesn’t know what he or his cronies as you put it are doing is rather silly.  Since when does anyone give a new person in a high profile position of this magnitude 5 weeks grace??  People are being very negative without really seeing what he will do and what will happen it is just easier to run him down with no real results of what he has done….his polices aren’t going to kick in straight away and solve everything how can they it’s impossible.  If you just prefer to be negative and knock him at every turn without proof things aren’t working that is very sad but of course that is your choice, I just happen to think you and many others are wrong here and need to be patient and give his plans a chance to work before knocking them down without proof of failure!!!
By caj p on 03/05/2009 7:49 am
Steph Mullin
I totally agree with you. If he doesn’t give the members of congress money for their little pet projects he will have no support even from his own party. The system has worked that way for far to long. They all do it DEM and RUB alike. If he doesn’t give them something they will throw him to the wolves and make sure nothing he wants done gets done. And he’s got too much to to. It’s almost like blackmail.
By Steph Mullin on 03/04/2009 3:16 pm