AIG Goes Hunting and Spends Another $86K

Two weeks we reported on the ridiculous spending of AIG while asking for more government money at a resort in California.

As you will recall AIG spent $440,000 on a trip for its executives just a couple of weeks after receiving $85 Billion from the Fed.

Now it appears, despite the outrage from the public about the California spending orgy, AIG executives went hunting, literally.

Four top executives from AIG spent another $86K on the hunting trip, after asking the fed for a second rounds of loans for $38 Billion on top of the $85 Billion they received weeks earlier.

The execs took 4 other “guests” with them to England to hunt partridge.

Nice to see my tax money at work.

In response to the story reported by CNN, AIG’s said that their “priority is to continue to focus on maximizing the value of our businesses and protecting our policyholders so we can repay the Federal Reserve loan and emerge as a vital, ongoing business”.

Nice job

Also today the former CEO of AIG, Maurice Greenberg, said the federal government’s $85 billion loan will drive AIG out of business unless its terms are changed.

“The role of government should not be to force a company out of business, but rather to help it to stay in business, especially a company that has been the pride of its industry,” Greenberg wrote in a letter sent late Tuesday to the insurer’s current CEO, Edward Liddy.

In the letter, Greenberg said AIG will not be able to pay off the loan from proceeds tied to asset sales and potential earnings. That will eventually lead to the liquidation of AIG, he said in the letter.

Last month amid the ongoing credit crisis, AIG received a two-year, $85 billion loan from the government in an effort to avoid a liquidity crisis that could have put the insurer out of business. In return for the loan, the government received warrants to acquire a 79.9 percent ownership stake in AIG.

AIG then received a second loan from the government for $37.8 billion. The second loan though is collateralized by investment-grade, fixed-income securities owned by AIG.

AIG said it will sell various assets to repay the loans.

Greenberg suggests that the government receive preferred stock with an annual dividend ranging between 5 percent and 6 percent and a 10-year term for AIG to redeem the loan at a 10 percent premium.