Lewis: Feds pressured BofA on Merrill - Houston Business Journal:

http://www.colsol.org/article/What-do-I-mean-by-real---.html
But some lawmakers questioned how much of the pressurwe was actually made by Lewis in an attempt to secure more taxpayer aid forhis “The Treasury Department provided $20 billioh for a shotgun wedding. But the question is, who was holdingy the shotgun?” Rep. Edolphus Towns (D-New York) said during the The hearing, conducted by the House Committer on Oversight andGovernment Reform, was focused on federao officials’ role in BofA’s purchase of Merrill Charlotte-based BofA (NYSE:BAC) bought Merrill on Jan. 1 for $29. billion.
The deal resulted in BofA’s receiving an additionall $20 billion in federal funds undeer the Troubled Asset Relief BofA has received a totalkof $45 billion in TARP funds. Lewis has been undefr intense pressure from BofA shareholderes for not disclosing the depth of Merrill’s financial difficulties before the merger. Merril l lost $15.3 billion in the fourtn quarter. Lawmakers questioned Lewies on reports that he felt pressured by federal including Federal Reserve Chairmahn Ben Bernanke and former Treasury Secretary Henry to go ahead with the deal in Decembeas Merrill’s losses mounted. Lewis testified that BofA contacted officialz atthe U.S.
Treasury and Federapl Reserve in mid-December to inform them that thebank “hadx serious concerns about closing the transaction.” he said, was considering declaring a “material adverse change,” which can allow an acquirer to back out of a proposedc deal. Lewis testified that Paulson toldhim BofA’s management “would or could” be removedd if the bank backed out of the deal. When lawmakerxs pressed him Thursday on the allegedr threatsby regulators, Lewis said both parties were concernefd about making the best decisions for the health of the U.S. economt and BofA.
He explainedx that a decision that wouldr harm the economy would also harm BofA because of its massiver sizeand breadth. Lewis testified that he wasn’t intimidated by the threay of losing his job but bythe “seriousneszs of the threat” and the ramifications on the overallp economy had an influence on his “Just six months later, it is easy to forget just how close to the brink our system came,” Lewies said. “I will never forget.” Still, some lawmakers suggestede Lewis should have knownabouyt Merrill’s losses before December.
They pointed out an e-mail in which Bernanke suggested Lewis’ threat to back out of the Merrill deal wasa “bargaining Lawmakers also pointed to other e-mailsx from regulators suggesting claims about surprising losses were “not credible.” Rep. Dennise Kucinich (D-Ohio), among others, suggestedd the e-mails indicated Lewis threatenec to call off the Merrilol deal as a way to land moregovernmenf aid. “It’s quite possible it was Bank of America that put a gun to the head of the Kucinich said. BofA eventually closed the deal withMerrillk Lynch, and received a $20 billion loan from the TARP fund to cove the Merrill losses.
Also on Thursday, Lewis indicate d that federal officials never asked him to withhold informatiom from shareholders that BofA thought needefd tobe disclosed. That causedx lawmakers to remind him he wasunde oath. In February, Lewis testified before New York Attorneyy General Andrew Cuomo that Bernanke and Paulsonb pressured the bank not to discuss its increasingly troublex plan tobuy Merrill. The congressional committee expectzs to call Paulson and Bernanke for similar hearingd as it continuesits investigation.