Editorial: Time for spa-going execs to take a perp walk?

Staff Writer
Mount Shasta Herald

In a less enlightened era, the top executives at insurance giant AIG might have been paraded through the public square in manacles, to be pelted with rotten vegetables by a leering and jeering citizenry. The humiliation heaped upon them and their families might have had them drawing their curtains, curtailing appearances at the club, perhaps even moving to other, shall we say, accommodations.

Earlier this week, it was revealed that not even a week after an on-the-verge-of-collapsing AIG had received an $85 billion loan bailout courtesy of U.S. taxpayers, the company treated 70 of its top performers, including about 10 senior executives, to a weeklong luxury vacation at a California coastal resort.

While there, they tallied a bill of $442,000, including $200,000 for rooms, $150,000 for meals - more than $2,100 in grub per guest - and $23,000 for spa treatments.

Ah, but that's not all. AIG's financial products manager, Joseph Cassano, whose complex, hyper-risky maneuverings nearly torpedoed his employer, is reportedly receiving $1 million per month in consulting fees after drawing $280 million in salary over the last eight years.

Despite the company absolutely hemorraghing losses, former CEO Martin J. Sullivan, whose three-year tenure coincided with the sowing and reaping that resulted in the company's near-demise, got a $5 million performance bonus, plus a new contract containing a $15 million golden parachute. This after he arguably misled investors just last December about the stability of the company's financial practices. So what's it take to get canned at AIG?

Yet Sullivan could not even muster an apology for his actions in testimony before the House Oversight and Government Committee. Apparently he and others at AIG believe they did nothing wrong.

Meanwhile, the best AIG could come up with to defend its indefensible behavior regarding its post-bailout, in-your-face spa vacation to California was to say the trip had been prearranged.  We couldn't put it any better than "Saturday Night Live" did: "That's like going ahead with Grandma's birthday (party) even though Grandma died three days ago."

All of this should make taxpayers crazy angry, of course, but not nearly as crazy and nearly as angry as what the Federal Reserve did after learning of AIG's actions. Just a day after the AIG executives' House testimony, the Federal Reserve agreed to hand the company $37.8 billion more, on top of the $85 billion it already got.

Again, our thanks to "Saturday Night Live": "Oh my God, Federal Government, are you serious!?! It's like you gave your junkie cousin a hundred dollars for rent, ran into him at the dog track, and then gave him another $37 billion. I mean, 'Oh my God!' "

Perhaps it's time for Sullivan, Cassano & Co. to stop taking their case before Congress and instead try explaining themselves at a local Legion hall on dollar-beer night.

Making lots of money is no crime, in itself. If you're not demanding a taxpayer bailout for your bad decisions, this doesn't draw headlines. But AIG is begging and so this retreat and these outlandish, unwarranted compensation packages are an enormous slap in the face to taxpayers. Show some respect.

Between Wall Street's freefall and the revelations cited above, Americans are upset and have a right to be. We may be too civilized in this country for revolution, too, but that doesn't mean our leaders should push it. 

American industry had better rein in these extremes, or perp walks in this nation could take on a whole new - uh, make that old-fashioned - meaning.

Peoria Journal Star