INSURER American Interna tional Group got into trouble for wastefully spending money on extravagant trips right before taxpayers had to bail out the company.
Now the hard-up insurance giant is wasting money on a high-priced public-relations firm to make that bad image go away.
Even more interesting is its choice of p.r. firms – one that could get it extraordinary access to a Democratic White House.
According to sources, the management of the troubled insurance giant recently retained Burson Marsteller, headed by a former top aide to Hillary Clinton, to do its bidding.
The aide, Mark Penn, left Clinton’s campaign after he came under intense criticism both for how he managed her run for president and for maintaining ties to Burson while on the campaign trail.
While Burson’s fee isn’t known, several sources in the p.r. industry say they wouldn’t be surprised if AIG ends up paying between $100,000 and $200,000 a month.
The trips that got AIG in trouble recently with Congress cost $440,000, including $23,000 worth of spa treatments.
Taxpayers had to pump $85 billion into AIG and the firm is said to have blown through most of that. Not surprising, I’d say.
An AIG spokesman confirmed that Burson is on board but said “we haven’t worked out an agreement yet.”
Wall Street titans are already facing the music. And they’ve already had a whole lot of drama in their lives.
So it is not too surprising, I guess, that financiers are saying curtains to funding Broadway shows.
Stewart Lane is one of the most successful theater producers of our time – the winner of four Tonys, the industry’s highest honor.
His shows include “Legally Blonde: The Musical,” which is currently enjoying a long run at the Palace Theater, “The 39 Steps,” as well as recent revivals of “Fiddler on the Roof” and “Gypsy.”
He was scheduled to bring a new production of the rock musical “Godspell” back to Broadway this fall, but a little thing called money delayed those plans.
I sat down with Lane the other day to find out another way in which the financial crisis is affecting New York.
Stewart, what happened to “Godspell”?
Lane: A couple of the major investors in “Godspell” dropped out because they couldn’t get their pledges together. And they were Wall Street guys.
Is this an isolated case?
Lane: No, there have been some other shows that have had funding concerns. One producer I know was expecting to get a certain amount of money from a group of investors, for instance, but he needed to double the size of the group in order to get the same amount of funding.
This spring is going to be a thin season, mostly supported by corporations.
Oddly enough, this is coming at a time when attendance at the theater is strong. Foreigners are seeing a lot of shows because of the cheap dollar, right?
Lane: We had a wonderful summer and I think it’s going to continue into the holiday season.
The financial markets have been in even more turmoil these past few weeks. Are you continuing to try to raise money for shows or are you letting the storm pass?
Lane: I’m letting it pass for the moment.
Are you starting to panic?
Lane: No, not at all. The theater is a crea tive industry. Some years are better than others. It’ll come back.
When?
Lane: I’m setting my sights on the 2009-2010 season.
Last week stock prices rose sharply because it was an options-expiration week – which, as I’ve documented, traditionally fosters triple-digit gains in the Dow Jones industrial average.
This week – except for a news-packed Monday – there were big drops in stock prices because it wasn’t an options-expiration week. It’s that simple.
Here are two random things I learned over the weekend.
The guy who owns a franchise to a local gasoline station is now earning 40 cents on every gallon he sells, up from 10 cents when oil prices were higher. What does that mean?
Sure, he’s making a fortune, but pretty soon gas stations will start fighting for your business and you can expect fuel to drop another 30 cents a gallon or so.
Or, Washington could force gasoline refiners to cut prices. That’ll stimulate the economy.
Meanwhile, emergency workers are having trouble because of hybrid gas/electric cars.
Normally, when extricating someone trapped in a car, rescuers make cuts into the top of a car and pull back the roof.
But in a hybrid, the roof is where electric cables are located. So, if rescuers can’t determine if the wrecked car is a hybrid, it could be dangerous for them if they cut the cables.