Photo: Wiikipedia

Citigroup CEO Vikram Pandit is lobbying — okay, let's just say it, begging — Treasury Secretary Tim Geithner to let him pay out retention bonuses to employees at Phibro, the bank's energy-trading unit, which is pretty much at this point Citigroup's only money-making operation. If they don't pay the bonuses, Pandit has told the Treasury secretary, the employees will leave, and Citi will, really and truly this time, fall apart. Geithner is reportedly mulling this over, or pretending to; in reality, he's probably muttering to himself, I am so effed right now.

Needless to say, we at Daily Intel do not have granular knowledge of the situation inside Citi or the federal government. But even so, we are pretty confident that there is no way the administration will agree to give these guys their bonuses. Not that they don't deserve them. In fact, they probably do! But giving them taxpayer money wrapped in a bow is very likely going to ignite another wave of populist rage, culminating in the embarrassment of Citigroup and the Obama administration. Again. Why are we so certain of this?

Because, for one, Andrew Hall, the head of the Phibro unit, owns a castle.

No really, he does! An actual castle! It is called Schloss Derneberg. It's outside Hanover in Germany, it is 1,000 years old, and Hall bought it to house his vast collection of contemporary art. Hall loves art: He actually tried to install an 80-foot-long concrete sculpture on the lawn of his Greek Revival mansion in Southport, Connecticut, but the neighbors complained.

Honestly. How in could Vikram "I Get The New Reality" Pandit have the temerity to even ask for a retention bonus for this dude? Does he really think that Congress, the media, and the American taxpayer will not notice they giving an injection of taxpayer cash to a guy who already has obvious, nay, flamboyantpreponderance of money, as detailed in an easily accessible Wall Street Journal story from just last year? Which also says incidentally that in 2005, Hall was paid $125 million, around five times that of then-CEO Chuck Prince? This is the kind of thing that Gary Ackerman dreams about. And so we reiterate: There is no way. Which Hall probably fine with. He doesn't want to deal with this crap, anyway.

In the Phibro situation, Mr. Hall, who runs the energy-trading unit, has been agitating to leave Citigroup to avoid the pay curbs, people familiar with the matter said.

Even last year, the Journal reported "after 15 straight profitable years, Mr. Hall has considered breaking out on his own. Last year, for the first time, he began managing outside money for clients including investment giant Blackstone Group and others."

So let him go. Spin off the unit, sell it to Japan, hire a monkey to trade oil futures at Citi. Anything to spare us from the histrionics that are sure to ensue once cable news finds out about the castle.

Citi Seeks Approval To Pay Out Bonuses [WSJ]