Irate Congressman Demands Resignation of AIG CEO
Rep. Elijah Cummings: Latest "Junket" Violates AIG Pledge
By JOSEPH RHEE
November 11, 2008—
A leading critic of AIG today demanded the company's CEO resign in the wake of the disclosure of yet another "junket" at a resort spa. In a letter to AIG's CEO Edward Liddy, Congressman Elijah Cummings (D-Md.) said the decision to hold an event for independent financial advisors last week at a luxury Phoenix resort was "outrageous" given an earlier pledge by Liddy to curtail such events.
Cummings wrote that AIG can begin to restore its trust with Congress "by accepting your resignation from the positions of chairman and chief executive officer."
Reporters for abc15.com (KNXV) caught top AIG executives on hidden camera at a secretive gathering last week at the luxurious Pointe Hilton Squaw Peak Resort in Phoenix. AIG instructed the hotel to make sure no company logos and signs were seen on the property, according to a company spokesman.
In his letter, Cummings questioned how the Phoenix event could have taken place given Liddy's earlier assurances that "not one cent of taxpayer dollars" would by used to pay for such events. The decision to hold the event while AIG was asking for billions of dollars more in federal loans was "even more shocking", wrote Cummings.
"Having received this assistance, which has been nothing less than a lifeline for AIG, you have decided to continue to hold corporate parties as if nothing has fundamentally changed with your business.
An AIG spokesman has said that Cummings "was mistaken" about the nature of the Phoenix event. The spokesman said the meeting at the resort was for independent financial advisors and that most of the $343,000 cost would be paid by product sponsors.
Cummings asked Liddy to provide him with details on who the sponsors were and how much money they were providing, as well as an itemized list of expenses incurred by AIG. Cummings also requested a list of each of the 160 planned events that AIG said it had cancelled on or after October 30.
"The American taxpayers who have prevented your firm from literally disappearing will judge your commitment to re-establishing their trust by your willingness to act in accordance with their expectations for the effective and efficient use of their money," Cummings wrote.
Meanwhile, leading government watchdog groups are also taking AIG to task over the Phoenix event.
"AIG executives should be ashamed of themselves," said Tom Schatz, president of Citizens Against Government Waste. "Individuals across the country are on the precipice of financial ruin while AIG personnel still attend extravagant getaways at the taxpayers' expense."
The watchdog group Taxpayers for Common Sense also weighed in on on the controversy. "AIG officials are obviously sensitive to public perception. Just look at how they hid their sponsorship and logos," said Stephen Ellis, Vice President of Taxpayers for Common Sense. "But you're not just supposed to hide your actions, you're supposed to change your behavior. AIG has lined up at the taxpayer trough again and yet current leadership still seems intent on living the lavish life."