PR Disaster at AIG Essay

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Public Relations Challenge

AIG Asks for Bail-Out While Hosting Executives at a golf outing at the St. Regis Hotel in Laguna Niguel, California

Between September 22nd and 30th, 2008 American International Group (AIG) was in the midst of presenting their case for a massive bailout of $85M to the U.S. Congress. Coincidentally the AIG independent insurance agent marketing and sales organizations were hosting a week-long sales meeting at the five-star St. Regis Hotel in Laguna Niguel, California. The cost of the event was $443,300 with such extravagances as rounds of golf well over $200 each, pedicures and extensive spa treatments (Weisman, 2007). The U.S. Congress granted the AIG executives the $85M bail-out believing it was essential for stabilizing the fragile economic condition of the country at that time (Jakobson, 2009). Upon hearing they had been lied to by the AIG executives who knew of the St. Regis event and massive spending, the House Oversight and Government Reform Committee threatened to cancel the bailout and allow AIG to go bankrupt (Bush, 2008).

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Analysis of Public Relations Damage Control

The massive disconnect of senior executives representing their company as nearly bankrupt and needing $85M to survive and the St. Regis event quickly became a source of national parody and sarcasm. Saturday Night Live made light of the House Oversight and Government Reform Committee on national television, skewering the hypocrisy of having executives asking for a financial lifeline while other executives were dancing a conga line literally the same week. Even the White House got involved and condemned the lying and hypocrisy of the situation, with President Obama calling for greater oversight and transparency with regard to corporate junkets and events (Jakobson, 2009).

As far as public relation disasters go, this one was epic and well-remembered….....

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