NEW YORK: Embattled insurance company, American International Group (AIG), has retained Burson-Marsteller for PR services. In doing so, it suspended corporate advertising and other paid outreach efforts to offset the cost, PRWeek has learned.*

The hire, which was first reported in the New York Post, was confirmed to PRWeek by Peter Tulupman, corporate PR manager for AIG.

"We have hired Burson-Marsteller to help us respond to the huge volume of requests for information we are receiving from customers, employees, and the media," Tulupman said in an e-mail to PRWeek. "We have more than offset the cost by canceling advertising and sponsorships."

Tulupman declined to comment on the contract amount, or to name the other firms that AIG works with for PR. Moreover, Tulupman said it was the firm's expertise rather than its high-profile CEO, Mark Penn, that drove its decision to hire Burson.

“We work with other firms, but we're not going to name them,” he wrote. “We retained Burson-Marsteller because of their broad capabilities and global presence. It did not have anything to do with a particular individual.”

Burson declined to comment.

Earlier this month, Bloomberg quoted an e-mail between AIG spokesman Nicholas Ashooh and George Sard, CEO of Sard Verbinnen, discussing the possibility of placing ads to explain why AIG was planning a company conference at a California Ritz-Carlton resort.

“To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,” Bloomberg quoted from Sard's e-mail.

A spokesperson from Sard later confirmed to PRWeek that it is working with AIG as part of a preexisting relationship.

In September, the Federal Reserve loaned AIG $85 billion; the company received an additional $37.8 billion earlier this month. Some members of Congress had criticized an AIG event that took place after the company received government help. Most recently, AIG was criticized for steep executive payouts, but the company announced on October 22 that the payouts, which included $19 million to its former chief executive Martin Sullivan, were suspended. And last week, AIG agreed to suspend all junkets and perks not justified by legitimate business needs.  

CLARIFICATION: An earlier version of this article stated that AIG had canceled some advertising and sponsorships to "help" offset the cost of hiring Burson. An AIG spokesperson, however, later clarified that the suspension of corporate advertising and other paid outreach like sponsorships would completely offset the cost of hiring the PR firm.