Senate lawmakers unite in blasting potential MF Global bonuses

By Peter Schroeder - 03/15/12 04:10 PM ET

The entire Senate Agriculture Committee is blasting a reported plan to pay bonuses to executives of the imploded financial firm MF Global.

Every Democrat and Republican on the panel said it was "offensive on its face" to consider bonuses when the company is still missing $1.6 billion in customer funds in a letter sent Thursday to the trustee steering the company through bankruptcy. Sen. Debbie Stabenow (D-Mich.), the chair of the committee, led the effort, and among those signing on was Senate Minority Leader Mitch McConnell (R-Ky.), who holds a seat on the committee.

"It is difficult to understand why you would even consider paying anyone a bonus" with the money missing, they wrote, adding "it is absolutely outrageous to propose paying bonuses to the very people who were responsible for the firm's operational, legal, and financial management at the time customer money disappeared."

The letter came following media reports that the trustee charged with steering the firm through bankruptcy, Louis Freeh, was planning to ask a bankrupcy judge to sign off on a retention plan that would include bonuses for top MF Global executives. The Wall Street Journal reported that bonuses for executives including the company's general counsel, chief financial officer and operating officer could total hundreds of thousands of dollars apiece, but Freeh has since said no decisions have been made yet.

In a Congress, where bipartisanship has been hard to find, lawmakers have been united in their outrage over the high-profile collapse of the commodities firm, which was brought down by extensive investments in risky European debt.

Its bankruptcy was the eighth-largest in the nation's history, but the key flash point was the revelation that over $1 billion in customer funds, which should have been kept segregated from the company's and protected during the collapse, went missing. Customers have recovered nearly three-quarters of those missing funds.

Adding to the intrigue was the fact the head of the firm was former New Jersey Governor and Democratic Senator Jon Corzine. The former Goldman Sachs executive took over the firm after losing his reelection bid to Gov. Chris Christie, and ended up being subpoenaed by three separate congressional committees, where he weathered hours of fierce questions from lawmakers on both sides of the aisle, including former Senate colleagues. He resigned from the company in November.

Corzine, and other executives at the firm, have repeatedly said they do not know where the money went, and no criminal charges have been filed related to the bankrupcy.