AIG's dizzying PR binge
The struggling insurance company employs four public relations groups - but it can't seem to keep its execs on point.
(breakingviews.com) -- American International Group is keeping the spin machine employed. The U.S. insurance giant - which just received its fourth taxpayer bailout - has four public relations groups on its payroll.
Private jets, golf days and lobbying are out for recipients of rescue funds. Some taxpayers and their representatives in Congress could see PR in the same category.
AIG (AIG, Fortune 500) has retained Kekst and Company, founded by Gershon Kekst, the lion of New York's financial spindustry, to work on its asset sales. Sard Verbinnen - a longtime AIG adviser - helps the insurer present its earnings. And the company has Hill & Knowlton and Burson-Marsteller working the Washington crowd. It has its own in-house public relations team, too.
It is hard to know how much each firm is paid for its artfully crafted rhetoric. And AIG may legitimately need help talking to the crowds of journalists, regulators, legislators, and investors now that it is in crisis mode.
Whatever their price, though, the spinmeisters haven't necessarily managed to keep AIG's bigwigs on message. During the firm's conference call on Monday, chief restructuring officer Paula Reynolds unwisely quipped that it might be "better to go to jail" than have to deal with intricacies of securities laws as they apply to AIG's situation.
In any event, words won't help soothe the losses taxpayers will probably take on the $150 billion-plus bailout they are funding. In fact, they might be irked about the way the AIG spin machine is working. Despite a series of massive bailouts, the company has given little clarity on taxpayer losses to date or indeed much communication directed towards taxpayers at all.