CorpComms Magazine

Corporate PR disaster of the week has to go to American International Group (AIG), when it was revealed that it had spent $440,000 on a jolly in September, pampering its top-performing agents at the swank St Regis Resort in Monarch Beach, near Los Angeles, California. The hotel bill  listed $139,375.30 spent on rooms, including the use of the presidential suite for five nights, $147,301.71 on banquets, $6,939.09 on golf, $5,016.32 at the bar, $23,380 on services at the hotel's Spa Gaucin and $1,488 at the Vogue Salon, which offers manicures, pedicures and hairstyling.

Still more shocking than the revelation that insurance agents are into manicures and pedicures (they really don't seem the type) is the fact that this shindig took place less than a week after US taxpayers dolled out a $85 billion loan to the company to prevent bankruptcy. And just before AIG borrowed another $37.8 billion from the Federal Reserve because it still had a few cash flow problems. 'They were getting their manicures, their facials, their pedicures and their massages, while the American people were footing the bill,' Democrat Elijah Cummings of Maryland told the House of Representative's Committee on Oversight and Government Reform.

The company cancelled a similar event planned at the Ritz Carlton in California's Half Moon Bay because of the outrage, but not before it considered purchasing advertising space to explain why such conferences were necessary to motivate and educate AIG agents. Luckily, the company's public relations consultant, George Sard, chairman of Sard Verbinnen, injected common sense and quashed the plan, advising AIG spokesman, Nicholas Ashooh, in an email that 'to spend the taxpayer's money on an expensive ad campaign to apologise for how you used taxpayer money leaves you open to further attacks.'

Unluckily for the company, his wise words were telegraphed to a rather wider audience when his email was mistakenly sent to a Bloomberg reporter.

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