The Hypocritcal Horse’s ‘Patutes’ At AIG and Lehman
October 8, 2008 — Richard Cochrane
“This is the new Enron,” says UCLA Anderson School Ethic Prof.
Insurance giant AIG’s executive team held a week-long retreat in Dana Point costing close to 500-thousand-dollars only a week after last month’s 85-billion-dollar taxpayer funded bailout. That AIG expenditure was discussed Tuesday before the House Committee on Oversight and Government Reform.
The company’s bill at the exclusive St. Regis Resort at Dana Point included 200-thousand-dollars for hotel rooms, 150-thousand for catered banquets and 23-thousand-dollars for spa services. That means the AIG executives, quote, and “were getting manicures, facials, pedicures and massages while the American people were footing the bill.”
These hypocrites make Enron’s arrogance look like amateurs and the more you look the worse it become including:
- lying about and hiding negative information about its condition from auditors before the bailout plan took shape, and
- ignoring regulator warnings about its lack of transparency and ability to oversee financial products.
Across the street and only days before Lehman Bros. filed for bankruptcy it altered its executive pay plan to give senior managers multimillion-dollar bonuses regardless of recent losses. Fired Lehman financial exec Joseph Cassano, who received more than $280 million in bonuses over the last eight years as the company was failing, Cassano was placed on a $1 million-a-month consulting retainer.
Gonzalo Freixes, a professor at UCLA’s Anderson School of Management specializing in business ethics says,”This is the new Enron.” Although WorldCom was a multiple of the Enron accounting scandal, but not mentioned much as the now imprisoned CEO was a visible supporter of Bill Clinton. It really is who you know when it comes to coverage.
The more we look under Wall Street’s hood the more it looks like an outhouse — AIG’s St. Regis wing-ding is a classic example of the financial industry’s crappy ethics and rotten practices. The St. Regis shindig was originally described as an executive retreat but AIG explains it was “to reward and as an incentive for its 100 top sales agents.” “Only” 10 top executives attended the taxpayer paid for spree.
