It seems AIG's $440,000 luxury junket hasn't precluded itself from the continued largesse of the taxpayers. Here's the official announcement:
The Federal Reserve Board has authorized the Federal Reserve Bank of New York to borrow securities from certain regulated U.S. insurance subsidiaries of the American International Group (AIG), under section 13(3) of the Federal Reserve Act.
Under this program, the New York Fed will borrow up to $37.8 billion in investment-grade, fixed-income securities from AIG in return for cash collateral. These securities were previously lent by AIG’s insurance company subsidiaries to third parties.
As expected, drawdowns to date under the existing $85 billion New York Fed loan facility have been used, in part, to settle transactions with counterparties returning these third-party securities to AIG. This new program will allow AIG to replenish liquidity used in settling those transactions, while providing enhanced credit protection to the New York Fed and U.S. taxpayers in the form of a security interest in these securities.
You have to love the language, of course. It's the New York Fed ostensibly borrowing from AIG, not the other way around.
Update: And we're seeing now, the company has yet another resort event planned*. From Bloomberg:
American International Group Inc., castigated by lawmakers for hosting a $440,000 conference days after an $85 billion federal bailout, plans to hold another gathering for brokers next week.The event, at the Ritz-Carlton in California's Half Moon Bay, aims to ``motivate and educate'' about 150 independent agents who sell AIG coverage to high-end clients, said spokesman Nicholas Ashooh. ``These sorts of sales meetings are an essential function,'' he said. ``We have them around the world all the time.''
*In fairness, AIG has to be able to function as a business, even if that means hosting occasional events at high-end locales. These bailouts are doomed to fail if every corporate action will be judged on this level -- and yet, now that they owe their very existence to taxpayers, this harsh light is inevitable.
