WASHINGTON, October 8, 2008 (AFP) – The Federal Reserve said Wednesday it had authorized a new 37.8-billion-dollar cash infusion into insurance giant AIG, which is under fire over a lavish spa retreat paid for by the company after its rescue by the government.
The newly nationalized company, saved from bankruptcy last month and propped up with increasing quantities of public money, has burned through the majority of its first line of credit of 85 billion dollars.
Possibly more damaging for its image, it has been accused of treating executives to a lavish spa retreat costing hundreds of thousands of dollars after the US government rescued the firm in mid-September.
On Wednesday it hit back, saying no executives from headquarters had attended the event which was for independent agents that bring business to the company.
In a hearing in the US House of Representatives on Tuesday, Democratic Congressman Henry Waxman had criticized the company for paying 440,000 dollars for a Pacific Ocean getaway “less than one week after the taxpayers rescued AIG.”
In a letter sent to US Treasury Secretary Henry Paulson on Wednesday, chief executive Edward Liddy wrote that “no AIG executives from headquarters attended” and the event was planned months befo