AIG bailout, companies cancel business retreats, companies save money on business retreats, congress travel, nancy pelosi
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A worker replaces letters on the American Express sign at the financial services company world
headquarters building in New York. (AP)

Congress Under Fire for Travels During Recess

February 20, 2009 02:01 PM
by Rachel Balik
Congress is attacking big corporations for wasteful spending; meanwhile, congressional delegations to Europe are drawing scrutiny.

Trips to Europe Necessary, Congress Says, But Not All Constituents Agree

In the weeks surrounding the controversial stimulus package and corporate bailouts, members of Congress have been relentless in their criticism of corporate spending. Meanwhile, members of Congress have been making numerous international trips during recess, much of which is financed by taxpayers. They say the travel is essential so that they can learn about other countries and make better decisions as representatives, the Milwaukee Journal Sentinel reported.

Rep. John Tanner (D-Tenn.), who is leading one such trip to Europe, responded to criticism by providing an itinerary of the trip, which he said was almost all work, ABC News reports. The trip includes stops in Brussels (headquarters of NATO; Tanner is currently NATO president), Vienna and Paris.

A recent congressional delegation to Italy, headed by House Speaker Nancy Pelosi, is the particular focus of negative attention during a time when many feel Congress members should remain at home, aiding their constituents. Although she has met with the pope on her trip, she has also been visiting museums and has even been presented with the gift of her Italian grandparents' birth records, MarketWatch reported.

Some conservatives have alleged that Pelosi's flight to Italy cost $200,000.  Rumors have been circulating for quite some time that Pelosi uses a 200-seat Air Force jet for her flights, and that she is the first Speaker to regularly fly on military planes. However, nonpartisan Web site explains that, in fact, Speaker Dennis Hastert was the first to make regular use of Air Force planes, and that Pelosi uses the same type that he did, a 12-seater.

Related Topics: Corporations cut back on travel; Congress continues with junkets

For years, top employees were rewarded with upscale vacations in the guise of business trips and retreats. But even companies not receiving federal bailout money are trimming their budgets these days, and extravagant corporate retreats have been the first perks to get cut. Cancellations and cutbacks on such trips have been so dramatic that hotels and resorts are panicking about the backlash that new temperate spending will wreak on the travel industry.

Some companies have continued with events that have a necessary purpose, such as business trips, but many are cutting back. The New York Times reports that outerwear manufacturer The North Face recently had its employees camp out in tents on a recent retreat to save money on hotel rooms.

The cuts are about more than saving money—they’re also about saving face. Few companies are eager to join the list of those that have been singled out for extravagant or luxury spending.

Struggling financial corporation Citigroup has received significant criticism recently for expenditures that many people see as unnecessary. At the end of January, Reps. Dennis Kucinich, D-Ohio, and Ted Poe, R-Texas, joined a growing chorus of public critics of Citigroup’s $400 million deal to name the New York Mets’ new home stadium Citi Field, when they sent a letter to Treasury Secretary Timothy Geithner asking him to dissolve the deal.

“It’s just totally unacceptable that Citigroup should be able to spend $400 million in naming rights when they’re the recipients of a massive federal bailout,” Kucinich said, according to Newsday.

The close scrutiny of corporate spending first arose in the wake of the AIG bailout in the fall of 2008. Soon after the insurance giant received billions in government loans, executives went ahead with a scheduled executive retreat in California. The company ran up a tab of $440,000, and U.S. News & World Report published the invoice from the controversial AIG retreat, provided by the House Oversight and Government Reform Committee. The retreat included over $20,000 in spa treatments for the executives.

But The Wall Street Journal reported that the Republican members of Congress continued on with a retreat to a Virginia resort, right in the midst of criticizing the stimulus package for its "pork." The party did not fund the trip with taxpayer dollars, but they did use campaign funds to pay for luxury room and board. The Journal also reported that Democrats took a two-day trip that did rely on taxpayer dollars to hold an "issues conference." A spokeswoman for the Caucus emphasized that the trip involved intense and focused work. Meanwhile, both the House and Congress increased their own salaries this year by $4,700, justified as a cost of living raise.

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