Source: Hill Hearings Coming On Bank of America
A House oversight panel is planning hearings to examine assertions by Bank of America chief executive Ken Lewis that government officials told him not to reveal billions in losses associated with the bank's acquisition of troubled brokerage Merrill Lynch, according to a Hill source with direct knowledge of the situation.
The House committee on Oversight and Government Reform will ask Lewis to testify under oath to back his February testimony to N.Y. Attorney General Andrew Cuomo that he felt pressured by Fed Chairman Ben Bernanke and former Treasury Secretary Hank Paulson to complete the September deal to buy Merrill, even though he wanted to pull out after discovering the brokerage's big losses.
Lewis also said that he believed Bernanke and Paulson wanted Bank of America not to publicly disclose Merrill's troubles, for fear of damaging an already-spooked market.
Bank of America paid $50 billion to buy Merrill Lynch in a September deal criticized as hasty. Since then, Bank of America has received $20 billion in federal bailout money to help it absorb Merrill's $15 billion in losses.
The push for hearings is coming from the subcommittee on Domestic Policy, chaired by Rep. Dennis Kucinich (D-Ohio). No date for hearings has been set, but subcommittee investigators are plowing through thousands of pages of documents, making this a "major priority," the source said.
Bernanke strongly refuted Lewis's assertion Tuesday in testimony to Congress's joint economic committee, saying: "I absolutely did not in any way ask Mr. Lewis to obscure any disclosure or fail to report information he should be reporting."
Further, Bernanke offered to turn over all "papers, documents and notes related to those meetings." Bernanke said he detailed all this in a letter sent to Congress last week.
May 7, 2009; 10:12 AM ET
Categories: The Ticker | Tags: Bank of America, Ben Bernanke, Hank Paulson, Ken Lewis
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