I knew it!
Wall Street Journal reporter Anne Flaherty reported yesterday that the Federal Reserve threatened to force the ouster of Bank of America CEO Kenneth Lewis if he didn’t follow through with plans to buy Merrill Lynch & Co. This has apparently been confirmed by Republicans involved with the House Oversight and Government Reform Committee after reviewing internal documents. But, Republicans also said there was evidence that the government tried to restrict information related to the merger from being publicly released.
According to an internal memo prepared by the committee’s Republican staff, Paulson and Bernanke “put a gun to the head” of Lewis and Bank of America’s board of directors to force the merger even though Lewis “felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal.”
The Committee is investigating claims that top government officials, including then-Treasury Secretary Henry Paulson and Federal Chairman Ben Bernanke, urged Lewis to go through with the acquisition and not disclose to shareholders the details of Merrill Lynch’s deteriorating financial state.
Lewis is scheduled to testify, this very day, before the panel, which is chaired by Representative Edolphus Towns, (D-N.Y).
Background: Bank of America has received $45 billion from the government’s $700 billion Troubled Asset Relief Program. As part of that money, the bank received $20 billion in January after Lewis requested it to help offset mounting losses at Merrill Lynch.
According to Prudent Society (of Optimistic Gentlemen) Brothers in-and-around Capitol Hill, as proof, Republicans cite several documents including an e-mail by an employee at the Richmond Federal Reserve who said Bernake had made it clear that if Bank of America backed out and needed financial assistance, “management is gone.”
Chilling and sinister to say the least, if true.
Thomas Jefferson worked hard to prevent it, and Ayn Rand certainly called it.
Peace be to my Brothers and Sisters.
Brian Patrick Cork