American International Group Inc. spent US$440,000 on a conference at a California resort less than a week after an US$85-billion government takeover, lawmakers said.

The bill from the St. Regis resort in Monarch Beach included US$23,380 for spa services, according to Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform. Mr. Waxman led questioning Tuesday of former AIG chief executives Martin Sullivan and Robert Willumstad as Congress probes events that led to federal intervention.

"Average Americans are suffering economically," Mr. Waxman, a California Democrat, said in his opening statement. "Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation."

The St. Regis, located on a bluff overlooking the Pacific Ocean midway between Los Angeles and San Diego, is "devoted to the pursuit of service and elegance," according to its Web site. A "health and wellness" package costs US$600 a night, with a two-night minimum.

The St. Regis expense "seems very inappropriate," Mr. Willumstad told the committee. "I was totally unaware that there was any plan for any conference. Had I been aware of it I would have prevented it from happening."

AIG, once the world's largest insurer, disputed Mr. Waxman's characterization of the conference. Spokesman Nicholas Ashooh said the event had been scheduled a year earlier by AIG's American General life insurance subsidiary as a way to reward independent agents who sell the company's products.

"This is very standard in the industry to reward the top 5 to 10% of top sellers," he said. "In the insurance business, it's as basic as salary as a means to reward performance. It was not AIG executives running away to California."

New York State Insurance Superintendent Eric Dinallo told the committee there may have been some good reasoning behind what he called "profligate" spending. AIG might have been taking steps to stem an exodus of employees, which would have been the "absolute worst thing" that could have happened to the company at the time, he said.

Invoices obtained by Mr. Waxman's committee showed that AIG spent US$139,375.30 on rooms, US$147,301.71 for "banquets," and US$1,488 at the resort's Vogue Salon, which offers manicures, pedicures and hairstyling. The group spent US$6,939.09 on golf, US$2,949 for gratuities, US$5,016.32 at the StoneHill Tavern and US$3,064.71 for in-room dining and the lobby lounge.

The group booked the resort's 3,100-square-foot Presidential Suite for US$1,600 a night for five nights, a discount from the standard rate of US$3,200 a night, a hotel document released by the committee showed. It also paid US$1,075 in "no-show fees."

"Have you heard of anything more outrageous?" said Representative Elijah Cummings, a Maryland Democrat, who plans to seek an investigation of the spending. "They were getting their manicures, their facials, pedicures, massages while the American people were footing the bill."

The group occupied more than 60 rooms. Receipts provided by Mr. Waxman were dated Sept. 22 through Sept. 30. AIG was bailed out on Sept. 16.

Bloomberg.com