U.S. Senator Debbie Stabenow, Chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, and Senator Pat Roberts, the Committee’s Ranking Member, introduced and passed a bipartisan resolution opposing bonuses for MF Global executives, with unanimous support in the Senate. According to news reports, Louis Freeh, the trustee overseeing the bankruptcy of MF Global Holding Ltd, may submit a plan in the coming weeks asking a bankruptcy judge to pay bonuses to top MF Global executives—even though the company is now bankrupt and thousands of its customers’ money is still missing. MF Global’s bankruptcy last year, the eighth largest in U.S. history, resulted in a loss of as much as $1.6 billion for the firm’s customers. Thousands of farmers, ranchers and small business owners are still owed tens or hundreds of thousands of dollars.
(For more, see: Corzine denials continue as MF Global scandal deepens)
“It’s absolutely outrageous to suggest that bonuses should be paid to the same people who were in charge when the company went bankrupt and lost its customers’ money,” said Stabenow. “This was a terrible failure of leadership. The people in charge should be held accountable, not rewarded with bonuses.”
“This is not your ordinary Chapter 11 bankruptcy,” Roberts said. “The process to return customer funds to their rightful owners will take years. This unprecedented loss of segregated customer funds may well have occurred at the direction of MF Global officials. Any recovered funds should go to customers instead of winding up in the hands of those who mismanaged the funds in the first place.”
On March 15, Chairwoman Stabenow and Ranking Member Roberts sent a bipartisan letter with all of their colleagues on the Agriculture Committee to Mr. Freeh urging him to drop any proposal to award bonuses to top executives. Mr. Freeh responded on March 16 and declined to commit to the Committee’s request. Last December, the Agriculture Committee convened a hearing to investigate the collapse of MF Global, where top executives testified and indicated that they didn’t know where customer money had gone. Two of those very executives are among those who may receive bonuses.