The example set at AIG is not what taxpayers expect from the bailout

The nation's $700 billion-plus bailout plan is stuck in a quagmire of bureaucracy, and one of the earliest beneficiaries of the federally funded effort is not helping its public image with its extravagant spending at what many taxpayers take to be their expense.

AIG, the world's largest insurance company, got $85 billion in federal financing in early October -- augmented this month by another $40 billion -- and went ahead with a retreat for some of its top-performing agents at a luxury resort, a get-together that cost $440,000. The company said the agents, along with AIG executives, were entitled to the high-cost recognition of good performance, even though taxpayers struggling to pay mortgages and make ends meet wondered why these "top performers" didn't do enough to keep the company from sinking in a sea of bad investments.

After considerable negative publicity, AIG executives said they had called off a second retreat planned for mid-October, and it also announced that it was canceling more than 160 expensive events in a cost-cutting move. The company also said it was whacking $19 million out of the golden parachute for former CEO Martin Sullivan.

But the company is still spending on junkets and other perks. For example, it still has a luxury suite at Madison Square Garden in New York, home of the Knicks and Rangers. And this week the ABC affiliate in Phoenix reported about another costly AIG junket at the Pointe Hilton Squaw Peak Resort -- a confab the company tried to keep secret, including instructions to the hotel to make sure no AIG signs were put up and no employees mentioned the company's name. In addition, AIG executives refused to discuss the meeting with ABC News, leaving viewers to draw their own conclusions.

This is not what President Bush's financial advisers or members of Congress had in mind when they pushed for the bailout plan. There are reports that some executives of companies and banks that have dipped into the bailout funds are in line for huge bonuses, despite the fact they made the greedy decisions that led to the collapse of the world credit market.

Ordinary workers and business owners across America do not see how those responsible for the mess we're in should be rewarded at what appears to be taxpayer expense. If Congress won't clamp down on such excesses, the justice department should step in. American taxpayers deserve better than this.