AIG Agrees to Cash Curbs

[SpartanDem]

AIG Agrees to Cash Curbs

Office remodeling, fancy hotels and even holiday parties are all under restriction as American International Group Inc. closes on its latest round of funding from the U.S. Treasury, according to an agreement the insurer filed Monday.

AIG said it closed on its deal, announced in March, for Treasury to make new funds available. The purchase agreement gives a hint of past scandals that both AIG and the Treasury likely don't want to see repeated.

Treasury's loan, originally announced at $30 billion, was cut to $29.835 billion after Treasury deducted $165 million to cover controversial retention payments AIG made to executives in its financial products division in March 2009. The payments, and news reports of expensive corporate outings, caused an uproar.

Several sections of the agreement restrict how AIG can handle executive retention payments and bonuses. Other sections of the agreement outline other restrictions on how AIG may spend money while it is on the government dole.



http://online.wsj.com/article/SB124022481818534555.html