As the effects of the financial crisis spread around the world, the number of US taxpayer dollars involved in cleaning up the mess seems to grow by the minute. Although some stock markets have gone up this week, most continued to slide. Furthermore, every day brings more bad news for financial institutions. But, clearly not all of them. Less than a week after getting an 85 billion dollar (2.222 trillion roubles. 62.475 billion euros. 49.572 billion UK pounds) commitment, executives of American International Group reportedly went on a week-long spree at a luxurious resort in California. The trip cost the troubled insurance company almost half a million dollars (13.074 million roubles. 367,500 euros. 291,600 UK pounds), including 23,000 dollars (601,404 roubles. 16,905 euros. 13,414 UK pounds) in spa charges such as facials and pedicures and 200,000 dollars (5.229 million roubles. 147,000 euros. 116,640 UK pounds) in room charges.
According to a blog filed at MSN by Kim Peterson, “Sometimes, after you’ve worked hard at running a company into the ground, only a pedicure will do, and a stiff drink. The tab also included 25,000 dollars (653,700 roubles. 18,375 euros. 14,580 UK pounds) in “leisure dining”, also known as “drinking in bars”. Henry Waxman, the House Committee Chairman on Oversight and Government Reform, told the Washington Times this week, “Less than one week after taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation”. Yet, Lynn Turner, a former chief account with the Securities and Exchange Commission, told the committee this week that, based on known evidence, executives at AIG or other failed Wall Street firms shouldn’t be criminally charged for their actions that lead to their company’s financial demise. “I don’t think you send people to jail for making bad biz decisions”, Ms Turner said, in testimony at a session of the hearing this week.
No, you don’t send people to jail for making “bad biz decisions”, but, folks who squander public money in the manner AIG executives did in that posh California resort recently could certainly bring public wrath on them, which it certainly did, judging from some of the comments in that MSN blog. “Running a company into the ground can be very stressful”, said one such blogger and they continued, “Manicures and rubdowns all around are all needed for these poor stressed out executives”. Another unnamed blogger described the frolics of AIG executives as “arrogance throughout this company. Not only to blatantly piss away taxpayers’ money, but, to do this without remorse is beyond belief… I’m writing my congressional representatives today”…
Meanwhile, the company’s failure last month was followed by the most significant Wall Street downturn since the 11 September 2001 terrorist attacks, prompting the Congress last week to approve a Bush administration plan to spend 700 billion dollars (18.303 trillion roubles. 514.5 billion euros. 408.24 billion UK pounds) to help rescue failing financial institutions. But, even that huge lump of money does not seem to be enough to help them out. Shall anyone else reach for those famed “golden parachutes” to bail out in the midst of a crisis?
9 October 2008
Yuri Reshetnikov
Voice of Russia World Service
http://www.ruvr.ru/main.php?lng=eng&q=33548&cid=87&p=09.10.2008 (in English)
