I think you hit a number of important points on the head in your comments. Clearly, this was a well-planned "Gotcha" story that I would expect to see in smaller news markets, rather than network news. If one did an autopsy on the story, I can't imagine not finding an insider at AIG who was disgruntled and tipped off ABC News to the meeting in Phoenix. Then ABC talked to the Congressman who expressed his displeasure.

Whatever the anatomy of the crime, I agree that government involvement in corporations now will require them to be more transparent now and in the future. Perhaps Edelman should set up an institute and invite corporate leaders to send representatives to have this laid out for them clearly. That is an initiative that you could take to make that "secrecy" mindset change in the board room.

I noted somewhere that AIG said much if not all of these expenses were paid for by outside parties. This raises the additional question of why would anybody pay so much for AIG to have such a gathering. Who is paying? Why are they paying? And what if anything do they get back for these payments? Sooner or later America's business leaders must learn that if they're not transparent, their partner the government will force them to be.

Smart observations about how AIG should be handling things. Certainly, you're right about transparency. But looking at this through the lens of Joe American (sorry, can't resist) -- even if there is a compelling business reason, executives needs to be doing more than avoiding faux pas.

They need to tighten their belts. I'm talking $0 paychecks for senior leadership for 2009. I'm saying flying economy. I mean entertaining business partners in the comforts of your new government offices.

Legitimate business reasons or not, they don't work for their shareholders anymore.

I think it's very easy to understand that the news media wants to 'out' stories like this. When taxpayers are funding bail outs and execs are still promised bonuses it makes us all wary. And this is the second time this type of 'story' has swirled around AIG. Maybe press before the event clarifying exactly what was going on would be good. Of course, these events are set up a long time in advance so not easy to change location, etc. However, anything that has a 'spa' is a perception problem. Suggest all these companies try webinars and airport hotels for starters. And as posted before - transparency.

The government is not a Partner to these corporations. Nor is it an Investor. It is an Owner, with political motivations and opinions as to what purpose the company serves.

As a PR student (based in Toronto, Canada), it's interesting to see how public relations is at work in the U.S. during this time of economic turbulence. With regard to this insightful story, I am curious to know how AIG's PR department would handle this publicity (or how have they handled it?).

I'm on the fence with this one.

On one hand, you have a great media story that ABC was obviously excited to break.

On the other hand, was this responsible reporting by not telling the whole story?

Independent financial advisors are key to AIG's business. They are the ones that retail their financial products. Taking their top clients to these "continuing education" events is all part of the cost of doing business.

Whether it's a client lunch, offering swag or various corporate event sponsorship, this all falls into the same category.

Had AIG not done these client events, how would it effect their business?

The reporting network definitely spun it to look like it was a swanky getaway for AIG senior executives, which wasn't necessarily the case.

Perhaps the real question should be centered towards appropriate business ethics and client treatment.

Alana,
I am not sure they had a chance to respond.
The error was in the effort to cover up the reality of their presence at the hotel.
Thanks for reading,
Richard Edelman

I completely agree with your analysis of the new world our financial institutions now inhabit, Richard - in particular those that have benefited from Government support. We have already seen such Gotcha moments in the UK media. I blogged about these myself last week - http://worldshutyourmouth.wordpress.com/2008/11/10/suspicious-minds/