You have no doubt heard about the attacks by the news media on insurance giant AIG over a large (almost $400,000) amount of money that was used to host a conference in Phoenix, AZ. The news media dishonestly spun facts out of context, implying that AIG was "partying on taxpayer's money" by being given a bridge loan and then using that money to pay for executives to take a vacation. Several (probably more than several) congressmen are "outraged" at this alleged example of so-called "corporate greed".

For example, U.S. Rep. Elijah Cummings, D-Md., a member of the House Oversight and Government Reform Committee, said that he was “shocked and disappointed” about the conference report.

Now for the facts:

Former American International Group Inc. Chairman Maurice Hank Greenberg was forced out of his position as Chairman under pressure from then Attny General Elliot Spitzer (we know how pro business he is).

With near dictatorial powers given to him by the Martin Act, he could basically do anything he pleased, but that is another story for another time.

After Greenberg left, AIG "went wild" according to the former Chairman. It went through 3 different CEOs and according to Greenberg, when asked what happened with the company, he referenced then Attny Gen. Spitzer, saying that some of the problems leading to AIG's crisis were caused:

"by an aggressive attorney general who was seeking to become governor and who tried to take down the biggest names he could find,"

The former AIG Chairman went on to say that:

"A lot needs to be looked at in our justice system, or ‘injustice system"

Facts about the conference:

Conferences like these are typically held for top producers in the company, partially as a reward for their productive efforts (as is commonly done in the industry). These producers range from employees of the company to independent financial advisors who write business with AIG. Most of the people at these conferences are independent advisors. This particular conference was designed to court potential financial planners to write business for the company and was planned in advance of the economic crisis.

...additionally, 93% of the bill was paid for by outside sponsors and the attendees themselves. The final analysis of expenditures showed that all but $23,000 was paid for by outside sponsors and the financial planners who attended. This is not secret information, but the news media chose to ignore that fact, and an ABC affiliate, KNXV, produced a segment to deliberately attack AIG for it's "greed" and "lavish expenditures" at the alleged expense of American taxpayers.

Since independent financial planners were responsible for roughly $200 million of business being brought to AIG this year, it seems nonsensical to criticize the company for doling out $23,000 to attract more planners to write business for the company. According to AIG chairman Edward Liddy, conferences like these are necessary in order to keep communication open, attract new advisors, and write more business.

The bottom line, more business means that the company can repay the taxpayers for borrowing all of that money. Perhaps the news media simply doesn't understand.