December 26, 2008 | 2:35pm
The fact that AIG tried so blatantly to cover up its excesses receives prominent mention in a recent letter
by the Democratic Congressman that calls for hearings into the insurance giant's use (or abuse) of billions in bailout funds.
Cummings' letter makes it clear his anger is directly first and foremost at AIG's payment of millions of dollars in super-sized bonuses to certain employees following the bailout. But he's also ticked at the company's lavish conferences, like the November 5-7 get-together at the Pointe Hilton Squaw Peak Resort, which he calls "luxury junkets."
In response to my questioning, (AIG Chief Executive Officer Edward Liddy) sent a letter on October 30 indicating that AIG was canceling more than 160 corporate events. Unfortunately, media reports in the same time period told a different story. Specifically, I am deeply troubled by reports of a corporate event in early November at Squaw Peak Hilton in Phoenix, Arizona, where the company took deliberate steps to remove its name from any signs at the event in an effort to "maintain a low profile." Media reports indicate that the event in Phoenix cost about $343,000 but AIG has claimed it covered only about $23,000 of this cost, with "corporate sponsors" financing the difference. Yet, at least one of these "corporate sponsors" is an AIG subsidiary company.
Local ABC news affiliate Channel 15 (KNXV) tries to take all the credit in a December 16 report, claiming Cummings' letter "is a direct result of an ABC15 investigation."
To that we say: Hey, pals -- get in line.
Sure, Channel 15 had a sweet TV news story
on November 7 about the conference, using undercover reporters to shoot video of AIG executives.
But the fact that AIG had taken "deliberate steps to remove its name," as Cummings puts it, was reported first
by New Times
on November 3, with our follow-up
story appearing on November 7.
We tout that fact not just to set the record straight, but to give credit to the anonymous whistle-blower who provided New Times
with documents about the conference, including a telling e-mail
by AIG employee Eric Koontz. Channel 12 (KPNX) also obtained the documents and broke the story about the Phoenix conference in an October 31 report
, but did not reference the Koontz' e-mail.
Cummings reportedly received
confirmation that AIG hearings would take place, though nothing has yet been scheduled.
Whatever happens, Cummings reaction to the Pointe Hilton conference shows just how much of a ruckus can be created when indignant taxpayers leak the right documents at the right time. -- Ray Stern