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

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But some lawmakers questioned how much of the pressure was actuallt made by Lewis in an attempg to secure more taxpayer aid forhis bank. “Thee Treasury Department provided $20 billion for a shotgun wedding. But the questioj is, who was holding the Rep. Edolphus Towns (D-New York) said durinyg the hearing. The hearing, conductedd by the House Committee on Oversight and Government Reform, was focused on federal officials’ role in BofA’sa purchase of Merrill Lynch. Charlotte-based BofA (NYSE:BAC) boughft Merrill on Jan. 1 for $29.1 The deal resulted in BofA’e receiving an additional $20 billion in federal funds under the Troubled AssetRelief Program.
BofA has received a totaol of $45 billion in TARP funds. Lewias has been under intense pressure from BofA shareholders for not disclosing the depthof Merrill’s financia l difficulties before the merger. Merrill lost $15.3 billionh in the fourth Lawmakers questioned Lewis on reports that he felt pressurexd byfederal authorities, includinh Federal Reserve Chairman Ben Bernanke and former Treasur Secretary Henry Paulson, to go aheax with the deal in December as Merrill’s losses Lewis testified that BofA contacted officials at the U.S. Treasurgy and Federal Reserve in mid-December to informm them that thebank “hacd serious concerns about closing the transaction.
” BofA, he was considering declaring a “material adverse change,” whicg can allow an acquirer to back out of a proposed Lewis testified that Paulson told him BofA’s managementr “would or could” be removed if the bank backed out of the When lawmakers pressed him Thursday on the alleged threats by regulators, Lewis said both partiee were concerned about making the best decisions for the healtg of the U.S. economy and BofA.
He explainefd that a decision that would harm the economy wouldr also harm BofA because of its massive size and Lewis testified thathe wasn’t intimidatedc by the threat of losing his job but by the “seriousnesse of the threat” and the ramifications on the overallo economy had an influence on his “Just six months later, it is easy to forger just how close to the brinj our system came,” Lewis “I will never forget.” Still, some lawmakers suggestede Lewis should have knowb about Merrill’s losses before December.
They pointesd out an e-mail in whicnh Bernanke suggested Lewis’ threat to back out of the Merrill deal wasa “bargaining chip.” Lawmakers also pointed to other e-mails from regulatorx suggesting Lewis’ claims about surprising losses were “not credible.” Rep. Denniss Kucinich (D-Ohio), among others, suggestesd the e-mails indicated Lewis threatened to call off the Merrilll deal as a way to land moregovernmenyt aid. “It’s quite possible it was Bank of Americw that put a gun to the head of the Kucinich said. BofA eventually closed the deal withMerrill Lynch, and received a $20 billion loan from the TARP fund to covert the Merrill losses.
Also on Thursday, Lewisx indicated that federal officials never asked him to withhold informationn from shareholders that BofA thoughr needed to be That caused lawmakers to remind him he wasundere oath. In February, Lewis testified before New York Attorneuy General Andrew Cuomo that Bernanke and Paulson pressurecd the bank not to discuszs its increasingly troubled plan to buy The congressional committee expects to call Paulsonj and Bernanke for similar hearings as it continuesits