NEW YORK - American International Group (AIG), the insurance giant that was partly-nationalised in a government bailout that tops US$152 billion (S$228.4 billion), defended itself on Tuesday against reports it wasted taxpayer money on a seminar.

In a statement, Mr Edward Liddy, chairman and chief executive of AIG, said the media reports had 'mischaracterised' a seminar organised by the company held in Phoenix, Arizona, last week.

The latest news reports revived last month's controversy over an AIG outing at a luxury hotel just days after US authorities launched a record US$85 billion (S$128 billion) rescue that gave the government a 79.9 per cent stake in the company.

'Recent news reports have grossly mischaracterised an American International Group seminar for 150 independent financial planners held in Phoenix last week,' Mr Liddy said on Tuesday.

'The financial planners are not AIG employees. In addition, the cost to AIG for this event was minimal. More than 90 per cent of the costs were paid either by sponsors or by the independent financial planners themselves.'

Earlier reports of an expensive outing for AIG executives at an upscale hotel in California raised eyebrows and an outcry. AIG said the hotel stay had been arranged for independent traders, not AIG executives.

But subsequently the company came under criticism for flying executives to a hunting party in Britain in early October, amid concerns about the price of the bailout.

Mr Liddy said on Tuesday he had asked his employees and subsidiaries on October 10 'to reduce expenses and conserve cash, including cancelling all nonessential conferences or meetings, unnecessary travel and excessive overhead.'

Mr Liddy said it was 'essential' for AIG to conduct seminars such as the one in Phoenix 'to keep independent financial planners abreast of investment products and services including those offered by AIG.'

He said the financial planners had generated almost US$200 million in revenue this year for AIG as of Sept 30.

'This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the US taxpayer,' he said.

The US government announced on Monday an expanded bailout for AIG of more than US$150 billion, as the Treasury tapped into emergency funds originally set for banks.

The latest bailout plan, the largest in US history, came as AIG burned through billions of dollars of cash and reported a third-quarter loss of US$24.47 billion.

The original Federal Reserve rescue of US$85 billion in mid-September, at the time the largest in corporate history, was expanded by US$37.8 billion just a few weeks later.

The Treasury will replace the entire previous package with a larger, longer-term US$152.5 billion programme, including a US$60 billion five-year loan and US$52.5 billion to buy up distressed securities.

The Treasury will tap its Troubled Asset Relief Program for US$40 billion to buy preferential AIG shares.

Defending the deal, tope Treasury official Neel Kashkari said the government was setting 'stringent' limitations on executive compensation for AIG's senior executives, corporate expenses, and lobbying. -- AFP