Paulson Finally To Face Music On Govt. Role In Bank of America-Merrill Merger
The House Oversight Committee has been like a dog with a bone with last year's $50 billion merger between Bank of America and troubled brokerage Merrill Lynch. (To be fair, so has The Ticker, as well, probably.)
The committee -- specifically, GOP members led by Rep. Darrell Issa (R-Calif.) -- believes that not only did Fed Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson force Bank of America chief executive Ken Lewis into going through with the merger, even as he was getting cold feet, they believe Bernanke's Fed covered up the strong-arming.
The only person yet to be heard from on this has been Paulson. That will change on July 16 at 10 a.m., when he will testify under oath before the committee on the merger, the committee said moments ago.
“These hearings are not supposed to and should not be about whether the Merrill Lynch deal with B of A was good or bad for either company – they are about whether pressure or the power of government was inappropriately used," Issa said in a statement. "With Congress actively pursuing new policies that would give the federal government expanded regulatory authority, there must be a clear line that marks what is appropriate and what is not. It’s been said that there are three sides to every story, we’ve heard two of those sides already and I am looking forward to hearing the third from Mr. Paulson.”
Bernanke got a good grilling from the committee last Thursday and emerged bloodied but unbroken.
Bank of America got $10 billion in government money to help swallow Merrill, which ended up with something like $12 billion in losses at the end of last year.
-- Frank Ahrens
June 29, 2009; 6:11 PM ET
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