A 'Global' disgrace
More than $1 billion remains missing, but executives at collapsed firm MF Global will still get bonuses
This is a rush transcript from "On the Record," March 9, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Well, you might want to sit down for this one! MF Global, the company with $1.6 billion in missing customer funds and headed by former U.S. senator Jon Corzine, has some news tonight. You are sitting down, right? Bankrupt MF Global is about to pay executives to bonuses to three big executives.
Louise Story of The New York Times is here to tell you. Nice to see you, Louise.
LOUISE STORY, NEW YORK TIMES: Thank you.
VAN SUSTEREN: And I have -- I have -- my voice is dripping a little bit with sarcasm. But so what is the story? Why would a bankrupt company with $1.6 billion of missing customer funds have bonuses being given out?
STORY: Well, so the person overseeing MF Global has a responsibility to try to return as much money as possible from MF Global to its creditors. So you're right, you say, Why pay out money to these executives?
And the reason is that they are the ones overseeing the unwind process. And basically, the argument is, if you don't pay these executives, they might leave. And if they all leave, who's going to unwind this company in a responsible way? And so they're arguing they should give them bonuses of a few hundred thousand dollars apiece if they do a good job in the unwind.
VAN SUSTEREN: All right, it has a little bit of sending the fox out to guard the chicken coop to me. I mean, the three bonuses are the COO, the CFO and the general counsel. All three, in my mind, as an outsider, I would think would have some responsibility in how the company was run in the lead-up to the October 31st bankruptcy filing.
So it's a little bit, like, what in the world were they doing? Were they doing their jobs? Why weren't they making sure that money wasn't getting lost? You know, it's not -- it's not that easy to lose $1.6 billion. I mean, you sort of have to work at it. So do they have their fingerprints at all on any sort of activity that led to the disappearance of this money?
STORY: Well, you know, the irony here, Greta, is that, actually, some of these people could become embroiled in the civil or criminal investigations that are going on into the missing $1.6 billion.
Now, we don't know yet if they did anything wrong at all. They might not have. But you could see these very same people later on being called to account for possible wrongdoing with that money.
Now, the other thing to keep in mind, even though a few hundred thousand dollars sounds like a ton of money -- I think most Americans would love that sort of bonus -- for these executives and for Wall Street standards, it's not that much.
One of the executives, the chief operating officer, you know, in 2010, he made $8 million. And when MF Global filed for bankruptcy, he had his pay go down to $60,000 a year.
And so the reason this money is justified, according to the person overseeing the MF Global bankruptcy, is because these executives are used to making more and they could possibly make more if they could get jobs at other Wall Street firms. I'm not sure other Wall Street firms would hire these MF Global people right now, but you know, stranger things have happened.
VAN SUSTEREN: You know, I guess I can't -- I can't get past the sort of the -- I almost see it as a question of -- of -- I don't know if morality's the right description, but to have three people who have been involved in a corporation that has destroyed so many lives, I'd rather clear the deck and get rid of them and not have their so-called expertise because their so-called expertise wasn't particularly helpful with this $1.6 billion of losses.
So you know, it's sort of hard for me to think, like, get -- I don't - - I don't think you can be -- I think -- I think you couldn't be worse off getting rid of them -- I just don't think you could be worse off.
STORY: There is some precedent if...
VAN SUSTEREN: Oh, there's precedent!
(CROSSTALK)
VAN SUSTEREN: ... ton of precedent! That's the bad part!
STORY: A lot of these companies...
VAN SUSTEREN: I mean, that's...
STORY: ... when you file bankruptcy, it becomes a boondoggle for all the executives who stay behind to clean up the mess and the lawfirms and the workout (ph) and the restructuring firms. There is so much money made off of bankrupts in this country. And you know, MF Global will be another one, where all the kind of fixers take their cut.
VAN SUSTEREN: I mean, talk about -- I mean, we can get back to the lawyers' fees. I mean, it's full employment act for the lawyers. I mean, we -- we had Liz MacDonald on of Fox Business the other -- last week, and it -- or maybe it was this week, I don't know. We had her on recently. And it is astounding the millions and millions and millions of dollars in legal fees that are paid because everybody knows it's just, like -- you know, it's an endless pot! Just keep billing and send 15 lawyers to every deposition when only one can talk!
It is the most incredible scam in this whole process! And it's so -- I mean, it's unbelievable what it's doing to the American people!
STORY: Yes, a bankruptcy can be a real boondoggle for the people who help clean it up.
VAN SUSTEREN: Louise, as always, thank you very much.
STORY: Thank you.
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