We're pretty sure it wasn't planned this way, but now the words "AIG" and "pedicure" may prove inseparable.
The insurance giant's decision to blow $443,343 — oh, and 71 cents — on a celebratory week of fancy rooms, food, manicures, pedicures, facials, massages and golf at California's only Mobil five-star resort right after AIG was saved from collapse with an $85-billion federal bailout loan earns the insurer first prize as the firm most out of touch with financial reality.
Talk about living high while the global economy burns.
Details of the weeklong resort event for about 100, billed as a "conference" for top-performing independent insurance agents, came to light in a congressional hearing in which AIG's itemized bill from the St. Regis Resort at Monarch Beach, on a bluff overlooking the Pacific south of Los Angeles, was made public. Receipts provided the House Oversight and Government Reform Committee were dated Sept. 22 through Sept. 30. AIG was bailed out on Sept. 16.
The invoice highlights:
• $139,375.30 for rooms that typically range from $400 to $1,200 a night.
• $147,301.71 for banquets, $3,064.71 at the Lounge, $5,016.32 at the StoneHill Tavern and $1,909.99 at the Monarch Bayclub.
• $6,939.09 for golf.
• $23,380 at Spa Gaucin.
The resort's spa bill is especially intriguing. According to Spa Gaucin's own menu of services, its offerings start with the $80 "chocolate pedicure" and "Mediterranean Light" massage for $175 in which "medium pressure strokes are executed with a hydrating Chardonnay grape seed massage oil."
For the bolder AIG invitee, there's the $350 "Mediterranean Harmony" in which two therapists "perform a choreographed massage in harmony."
No wonder something so petty as an $85-billion taxpayer bailout would slip right out of their heads. For the record, AIG's new CEO, former Allstate chief Edward Liddy, says the St. Regis event has been mischaracterized. AIG said the event had been scheduled last year but a spokesman said he did not know if anyone thought to cancel it in the wake of the federal bailout.
The deal gave the federal government an 80 percent stake in AIG, the right to remove senior management and to veto payment of dividends to shareholders as ways to protect taxpayers. But it does not seem to empower the feds to kibosh one "Mediterranean Harmony" massage, with two therapists.
Others see a bigger theme in such blind excess when AIG was about to fail without government aid. "This is the new Enron," UCLA management and business ethics professor Gonzalo Freixes told the Los Angeles Times. "A lot of people probably thought we were past this kind of thing."
By itself, a $443,344 frolic at a world-class luxury resort would not normally hit our radar. Not when compared to such corporate high jinks as former Tyco International CEO Dennis Kozlowski throwing a $2-million birthday toga bash in Sardinia for his wife — with Tyco footing half the bill. Or ex-Enron CEO Jeffrey Skilling, who not only declined to take the Fifth before Congress but also blamed all of Enron's problems on others.
Kozlowski and Skilling are still in jail.
Yet AIG on Wednesday was given access to an additional $37.8-billion federal loan, on top of the $85-billion. Here's one lucky company enjoying the fruits of the biggest corporate bailout in U.S. history.
Robert Trigaux can be reached at email@example.com.