AIG's Hunting Party
By Gregg Greenberg, 10/17/08
American International Group (AIG) went on the government's dole for $123 billion, but that doesn't mean its executives can't have a jolly old time.
A handful of top executives from AIG allegedly racked up an $86,000 tab during an October English hunting trip, even as the New York-based insurer was lobbying for an additional $37.8 billion from the Federal Reserve.
AIG spokesman Peter Tulupman at the time that the event had been planned "months before" the Fed's loan to AIG, adding, "We regret that this event was not canceled."
Perhaps sincere regret carries a little less weight in these extraordinary times. What taxpayer wasn't overjoyed with learning that he or she helped sponsor another boondoggle, this one at a $440,000 price tag, for top AIG insurance agents at a posh California resort in September -- just days after the U.S. government stepped in to save AIG with $85 billion?
White House Press Secretary Dana Perino called that event "despicable."
This latest one, however, we'll call just plain stupid.
Update 12/26: On Nov. 10, just a few days before requesting an additional $40 billion from the Federal government, ABCNews reported that the insurer spent $343,000 on a conference at a lavish resort in Phoenix, Arizona . Later that month, they got their money from the Treasury. Party on, Garth!
GM Jettisons Jet
By Gregg Greenberg, 11/28/08
General Motors (GM) is having trouble selling cars, but maybe it will have better luck unloading a pair of airplanes.
The CEOs representing the Big 3 automakers flew into a storm of criticism in late November for taking private jets to Washington, D.C., to lobby Congress for a multibillion dollar-bailout package. The irony was so delicious that Rep. Gary L. Ackerman (D., N.Y.) said it's "almost like seeing a guy show up at the soup kitchen in a high hat and tuxedo.''
GM Chief Executive Rick Wagoner certainly got the point, although he would not publicly admit it. The nation's largest automaker announced later that it was already in the process of returning two of its leased corporate jets, even before Wagoner's humbling -- and pricey -- round trip to Capitol Hill.
So the announcement that GM was jettisoning its jets was pure coincidence?
Sure, and we have a bridge to sell you!
GM started the year with lease contracts on seven jets, but cost-cutting eliminated two in September 2008, before this week's decision to ditch two more. Ford's (F) air fleet currently numbers five jets, which the company owns. A Ford spokesman said the company is still trying to figure out what to do about its air travel plans.
Maybe Wagoner and Ford CEO Alan Mulally can hitch a ride on Chrysler CEO Robert Nardelli's luxury jet on their next fund-raising journey to Washington.
Nardelli famously pocketed more than $210 million in severance when he left Home Depot (HD) to join Chrysler's parent Cerberus, sneering at shareholder protests in the process. Nardelli obviously doesn't care about keeping up appearances, even when prostrating himself for public money.
So in case you didn't get the message in Detroit, it's time to cool your jets.
Update 12/26: The Big 3 chiefs smartened up and chose a cheaper form of transportation for their return trip to Capitol Hill two weeks later. Nevertheless, they still failed to convince Congress to give them the billions they need to survive. President Bush ultimately rode to their rescue in late December with a $17.4 billion bridge loan. But will it lead to nowhere? We here at The Five Dumbest Research Lab plan to follow these developments, if any, very closely.