By: Vanessa Horwell, Chief Visibility Officer
It looks like American International Group Inc, aka AIG is trying to win back the American public’s goodwill (read: hearts and wallets).
The insurance behemoth that became the symbol of Wall Street’s greed and excess during the 2007-2010 financial meltdown recently created a YouTube channel – launched on July 26 – replete with a number of warm-and-fuzzy videos assuring taxpayers that it has seen the error of its pre-crash ways. Oh how thou suffereth.
Before we get all mushy, though, let’s back up to September, 2008. You know, that horrible month in that horrible year when the (financial) world was collapsing beneath us. AIG was on the verge of a mammoth collapse because it couldn’t honour the billions in contracts it had sold to insure bundles of way-too-complicated mortgage-backed investments that tanked when the housing market imploded. Our government very kindly channeled $182.5 billion of taxpayer funds into AIG’s coffers – the most received by any single American company – to bail them out. Too big to fail, remember?
AIG’s excessively risky bets and massive government-funded windfall made it the poster child for the cancer eating away at our financial system and the target of widespread public fury, particularly after it was revealed in 2009 that the company had decided to reward the geniuses who oversaw those risky bets – with $165 million in bonuses. Classy move, no?
It was during this time the AIG brand became so toxic that the company was forced to ditch it, renaming itself AIU Holdings shortly after the bonus brouhaha.
But an elephant never forgets as they say, so it’s too soon to determine if Americans will be won over by the videos, which include clips – overlaid with feel-good music – of AIG/AIU Holdings employees lauding the company, a short history of the 90-year-old insurer and of AIG’s CEO, Robert Benmosche, trumpeting the fact that the company has returned to profitability. That’s where there could be a problem.
Nowhere do the videos mention the handsome $17.7 billion tax break the Treasury Department quietly slipped to AIG in February 2012. Elizabeth Warren – who is currently running for Scott Brown’s Senate seat in Massachusetts – and other consumer watchdogs denounced the tax break as a “stealth bailout.”
Why does AIG need more taxpayer largesse if it is as profitable as Benmosche says? That’s the kind of sketchy move that will throw a wrench in any kind of campaign the company’s PR team can dream up. You don’t have to be a financial whiz to know that, given the company’s record, this will look dodgy no matter what.
No amount of advertising – which is meant to deliver the promise of a culture, product, service or brand – can make the public forget AIG’s role in the financial crash. Even without any further missteps, that alone makes it difficult for any advertiser to deliver a believable promise from AIG. Add a lack of transparency in accepting more taxpayer funds and the advertiser’s job becomes impossible.
Yes, as of May 2012, AIG has paid back about 75% percent of the bailout funds. And yes, the Treasury has made over $23 billion selling AIG stock. That’s good and all, but by failing to disclose the February tax break, it leaves very little doubt as to whether the company can truly be trusted.
Once bitten, twice shy.