- Insurance giant AIG is under fire for a holding a $350,000 sales conference at a luxury resort at the same time it was in negotiations to adds billions more to its federal bailout.

Now a Maryland Congressman is demanding AIG's CEO step down.

At the conference in Arizona last week, AIG asked the Pointe Hilton Squaw Peak Resort not to post any signs with its name on it in the area, leading KNVX-TV, the ABC affiliate in Phoenix, to send a reporter in undercover.

"Is this registration for the all-secretive AIG?" asked the undercover reporter. "Yes, it is," replied a hotel employee in an exchange caught on hidden camera.

The reply confirmed AIG was heading a meeting at a luxury resort, complete with cocktail parties, limousines and nice dinners. It was all happening as the company received billions of dollars of federal bailout money.

"Why don't you just post the darn AIG sign?" asked the undercover reporter.

"No, no, no, no, no," replied the employee.

"They tell you guys not to post it?" asked the KNXV-TV reporter.

"Oh yeah," replied the hotel worker. "We can't even say the word."

AIG said months ago it would stop "all nonessential conferences, meetings and activities that do not clearly maximize value and service given the current conditions."

But AIG is defending the conference, calling the report misleading.

"We reviewed this one. This one did not slip by," AIG spokesman Nick Ashooh said Tuesday. "Some of the things we've done in the past certainly can be criticized, but this was a totally legitimate event that wasn't even for AIG employees."

Company officials said the meeting was a sales training and education conference for about 150 independent financial advisers in its AIG Advisers Group.

Such financial planners were responsible for generating almost $200 million in revenue this year for AIG as of Sept. 30, the company said.

"It is essential for AIG to conduct seminars of this kind to keep independent financial planners abreast of investment products and services including those offered by AIG," AIG Chief Executive Edward Liddy said in a statement.

"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 U.S. taxpayer," Liddy said. 

While some AIG employees were present, the cost was "minimal" to AIG, with more than 90 percent of the event paid for by attendees or by sponsors, Ashooh said.

"It's the way we do business. We have to hold these events," he said. "You have to hold them somewhere."

"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 U.S. taxpayer," AIG said in a statement.

Some lawmakers aren't happy.

"The problem is that they've come to us and said, 'Save us, please. Congress save us.'" said Rep. Elijah Cummings, a Maryland Democrat. "A person who is drowning doesn't then go jump up and start partying."

In recent months, AIG has come under fire for picking up a $440,000 tab for a weeklong retreat at the posh St. Regis Resort in California for top-performing insurance agents, just days after the U.S. government stepped in to save the company with a $85 billion taxpayer-funded loan. AIG also spent $86,000 for a hunting trip in England as the faltering company reaped another $37.8 billion in taxpayer funded loans.

Lawmakers investigating AIG's meltdown said they were enraged that executives of AIG's main U.S. life insurance subsidiary spent $440,000 on the retreat, complete with spa treatments, banquets and golf outings.

Company officials said the activities had been planned months before the bailout. On Oct. 10, the company pledged to do everything possible to end such extravagances and has since agreed to freeze millions of dollars in compensation and bonuses for former executives.

The most recent event held in Phoenix, came as the government announced new financial assistance to AIG, including pouring $40 billion into the company in return for partial ownership.

Liddy said the company conducted a "top-to-bottom review of all expenses of the Phoenix meeting in advance and found that it was consistent with my Oct. 10 directive."

The company has canceled more than 160 events, since, AIG officials said.