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Ex-Wall Street Boss Offers $1.2 Million Refund For Sprucing Up His Office

POSTED: 01:20 PM ET, 01/26/2009 by Derek Kravitz

John Thain

Former Merrill Lynch CEO John Thain -- ousted as head of the Wall Street firm last week after the company posted unexpectedly large fourth-quarter losses following its merger with Bank of America -- has offered to reimburse Bank of America $1.2 million for pricey office renovations he ordered a year ago.

Thain has come under fire after a CNBC and Daily Beast report found he had hired President Barack Obama's celebrity decorator and spent $87,000 on an area rug, $68,000 on a 19th century credenza and $1,400 on a "parchment waste can," among other items.

In a parting memo to employees, Thain called the spending a "mistake" but said it came during "a very different environment." He added that the $1.2 million figure was used to renovate his office, two conference rooms and a reception area.

In the same memo, Thain said Merrill Lynch had been "completely transparent" with Bank of America executives regarding the firm's financial footing, adding that they "learned about these losses when we did."

"The acting CFO of my businesses was Bank of America's former Chief Accounting Officer," Thain wrote. "They had daily access to our p&l, our positions and our marks. Our year end balance sheet target (which we more than met) was given to us by Bank of America's CFO."

(Thain is slated to speak with CNBC's Maria Bartiromo at 4:15 p.m. Eastern)

Thain, who 13 months ago had been brought in to Merrill Lynch as a proverbial "Mr. Fix-It," and Bank of America have been sparring in recent days about the use of $4 billion in company money on bonus payments in December, as the firm struggled and privately approached the federal government for bailout help.

The merger between the two companies went through on Jan. 1, but Bank of America feared that Merrill "was losing so much money that the deal might fall through" unless it could get more government backing, according to Forbes.

A little more than two weeks later, Bank of America brokered a deal to get $20 billion in government aid from the Treasury Department's emergency bailout fund and $118 billion worth of guarantees against bad assets.

By Derek Kravitz |  January 26, 2009; 1:20 PM ET
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