WASHINGTON – The chairman of the Senate Finance Committee said Thursday he wants "heads to roll" at American International Group Inc. for sending executives on a $440,000 retreat to a posh California resort less than a week after the federal government had to bail the company out.
In a letter to Federal Reserve Chairman Ben Bernanke, Sen. Max Baucus, D-Mont, demanded more details of the retreat and called for information on Fed oversight of AIG's activities, now that American taxpayers hold a 79 percent stake in the company.
The Fed loaned AIG an additional $38 billion dollars this week on top of the $85 billion bailout loan it got the week before.
"This is precisely the kind of report that Congress will not tolerate regarding companies claiming to be in trouble and the government agencies charged to oversee them," Baucus said in a written statement.
"If AIG was throwing money around for tee times and hot stone massages while begging for Federal Reserve dollars, it's a scandal and an outrage and heads will roll," Baucus said. "I want to know who we can fire and how we can get this misspent money back and I want both of those things to happen pronto."
He said he is considering calling for a special investigation by the Federal Reserve Inspector General.
"This kind of behavior is an insult to taxpayers, whose dollars are used to protect and preserve private companies," he said. "Provisions must be in place to end frivolous expenses, limit executive compensation and protect taxpayers from unnecessary risks."
AIG is already under investigation by the House Oversight Committee, which held a hearing this week that disclosed that AIG executives hid the full range of its risky financial products from auditors as losses mounted.
The $440,000 retreat included $23,380 worth of spa treatments for AIG employees at the coastal St. Regis resort south of Los Angeles -- even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy.
The retreat didn't include anyone from the financial products division that nearly drove AIG under, but lawmakers were still enraged over thousands of dollars spent on catered banquets, golf outings and visits to the resort's spa and salon for executives of AIG's main U.S. life insurance subsidiary.