The Story of the $100 Million Recession Bonus

This is a rush transcript from "On the Record," July 27, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Caution! Your head might explode when you hear this story! As you probably remember, you bailed out the bank CitiGroup to the tune of $45 billion -- that's with a B -- billion. Well, guess what? A top trader for CitiGroup could end up getting a bonus package worth $100 million. Yes, you hard right, a bonus for a single person, $100 million, just one man, $100 million.

Joining us live is Steve Moore, senior economics writer for The Wall Street Journal editorial page. That's not a bad paycheck, $100 million!

(LAUGHTER)

STEPHEN MOORE, WALL STREET JOURNAL, "THE END OF PROSPERITY" CO- AUTHOR: Right, and...

VAN SUSTEREN: What'd he do?

MOORE: Well, he's...

VAN SUSTEREN: First, who...

MOORE: ... an oil trader.

VAN SUSTEREN: OK.

MOORE: And he actually has made a lot of money for Citi, but this is a company that lost tens of billions of dollars last year. Of course, we own it. It's a company that was bailed out by the federal government. And now he wants this $100 million pay-out. And even though...

VAN SUSTEREN: (INAUDIBLE)

MOORE: ... he was making money for the company, I still think when you're talking about a company that was essentially bankrupt and it had to have a federal taxpayer bail-out, I don't see where you get the nerve to ask for $100 million bail-out.

VAN SUSTEREN: Well, apparently, in the last five years or so, he's gotten about a quarter of a billion dollars in...

MOORE: Yes.

VAN SUSTEREN: ... in...

(CROSSTALK)

VAN SUSTEREN: He's had good pay days, so the guy's not starving if he doesn't get a full $100 million.

(LAUGHTER)

VAN SUSTEREN: (INAUDIBLE) all right, now, what is it, that he gets a percentage of how much money he makes when he trades?

MOORE: That's right. And he -- and he -- look, he has been a spectacularly successful trader. He...

VAN SUSTEREN: Why is he so good? I mean, what was...

MOORE: Because, well, he called the oil market. Remember when the price of oil went up to -- as high as $150 a barrel, he called that and so made, you know, hundreds of millions of dollars for the company. So I don't have a problem with that. I don't have a problem with his past bonuses. But I do have a problem with him asking for bonuses when the company went down the drain and it -- that company wouldn't even exist today if it hadn't been for a taxpayer bail-out.

VAN SUSTEREN: Let me ask you this, though. Would we be bailing out CitiGroup more if they didn't have this successful trader on their hands...

MOORE: Probably.

VAN SUSTEREN: ... who was making all this money? So maybe...

MOORE: That's the...

VAN SUSTEREN: ... in some sort of perverse way...

MOORE: Yes.

VAN SUSTEREN: ... he's made it easier on us. We might not have been bailing Citi-Group out to the tune of $45 billion, it might have been $48 billion.

MOORE: I'm sure if he were here right now...

VAN SUSTEREN: That's the (INAUDIBLE)

MOORE: ... he would make that case. But here's -- here's, I think, the bigger picture that I think viewers need to be aware of. As these banks start to pay back this money -- and we bailed out 10 of the 15 largest banks -- I suspect that you're going to start to see these CEOs and directors coming (INAUDIBLE) saying, We're owed these big bonuses. And that's kind of an outrage because the companies would not exist had not taxpayers put money into these things.

VAN SUSTEREN: What -- what did he do, though, that's worth $100 million, other than take a -- I mean, he probably had a huge portfolio, and then when he trades the portfolio...

MOORE: Well, he was trading billions of dollars of...

VAN SUSTEREN: Right. So but -- so, like -- so if you go -- if you have a huge portfolio and if it goes up and you're taking a piece of it or a percentage of it, you're going to make a huge amount of money.

MOORE: That's right.

VAN SUSTEREN: You can also lose a huge amount of money for the company.

MOORE: Well, that's a question of how much his down side risk was.

VAN SUSTEREN: So if he had a smaller -- if he had a smaller -- a smaller portfolio at the bank, he wouldn't be making these huge amounts for the bank.

MOORE: No, he wouldn't. And the truth is, as I said, you know, when making a good call, you're entitled to that. But why is it that these people on Wall Street feel entitled to these massive amounts of bonuses, you know, in a losing market, in a market where companies lost tens of billions of dollars? The people who should really be angry about these kinds of bonuses being paid out, not just taxpayers but the shareholders because remember, the shareholders were essentially wiped out and those -- that's everybody who owned stock in these companies.

VAN SUSTEREN: Is his work -- not to be disrespectful to him -- a little bit sort of gambling, he's betting on the price of oil?

MOORE: That's -- that's what he does.

VAN SUSTEREN: He's a gambler.

MOORE: Yes.

VAN SUSTEREN: So he's basically -- this is a guy...

(CROSSTALK)

MOORE: ... gambling. I mean, look, commodities traders, they do a lot of research. They examine what these things are going to be worth. They play a role in our capitalist system. And I got to...

VAN SUSTEREN: Well, if they -- but so I don't understand -- I mean, where did the -- where's the loss? I mean, this company was also failing. Where were they losing money?

MOORE: Well, he was essentially working for a subsidiary of the company, of Citi, that was making -- not every part of Citi was losing money. The company itself folded (ph). And if -- again, this is what he would say, is, Look, my -- my component of the company was making money. That's what all of these guys who want bonuses are saying, Greta. I mean, a lot of them are saying, Look, I made money for the company. The fact that...

VAN SUSTEREN: And they're going to say, We had a contract. We had a deal. A deal's a deal.

MOORE: Right.

VAN SUSTEREN: I made money, so I'm entitled to it.

MOORE: Right. But you know what? When people are losing their pension funds and things like that -- I mean, it's -- it's rather almost disgusting that these -- and I'm in favor of bonuses if people perform, and this guy performed, but he's working for a company that failed. And these big bonuses have to cease right now until we're out of this economic crisis.

VAN SUSTEREN: Steve, thank you.

MOORE: Thank you, Greta.

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