Citigroup is asking the U.S. Treasury for permission to pay out bonuses to some employees, the Wall Street Journal reported, citing people familiar with the matter.

People at Citi’s energy-trading Phibro unit are threatening to leave the firm because of pay restrictions tied to the U.S. government bailout of the New York banking giant.

The unit’s leader, Andrew Hall, earned about $100 million last year, the report states. Citigroup’s commodities trading activities a pretax revenue of $667 million in 2008.

Citigroup is considering spinning off the unit into an independent hedge fund or open it to outside investors to avoid the federal restrictions, the Journal reports, citing people familiar with the matter.

The company is also seeking special bonuses for other employees at the rest of the company. Citigroup chief Vikram Pandit met earlier this month with U.S. Treasury Sec. Timothy Geithner to attempt to persuade him to allow the bonuses, which the report describes as “retention” awards.

The Treasury has not made a decision about allowing the bonuses, a person familiar with Sec. Geithner’s thinking told the Journal.

Timothy geithner Citigroup Vikram pandit