WASHINGTON — Federal Reserve officials harshly criticized Bank of America Corp. and its chief executive in emails after the bank tried to pull out of its deal to buy Merrill Lynch, according to documents unearthed by congressional investigators.
During the December standoff between the big bank and top government officials, Federal Reserve Chairman Ben Bernanke dismissed the pullout threat as a “bargaining chip.” Fed attorneys called the bank’s arguments “not credible.” And a top examiner said Chief Executive Kenneth Lewis’s own claim that the bank was surprised by Merrill’s mounting losses “seems somewhat suspect.”
Documents uncovered by congressional investigators reflect a heavy-hand by the Fed in the Merrill Lynch deal. We are beginning to see the veil of secrecy that has covered over the Fed lifted just a bit. The super-secret central bank, which has hired a PR flak from the Clinton years to lobby against HR 1207, which will mandate a public audit, usually provides documents to Congress in secret, and Congress usually agrees to keep those documents secret. (The CIA’s job is to steal and to keep secrets; and we know more about it than we do the Fed.)
Contact your Senators and Representatives and let them know that HR 1207 has to pass, there is much more corruption that must be unveiled and quickly before documents are destroyed, the country is destroyed.
This time around, Congress used its subpoena power to compel the Fed to produce documents that exposed its behavior in the B of A/Merrill Lynch deal; and the Congress revealed the documents it received to the public.
That deal, in which B of A (then) Chair (and still present) CEO Ken Lewis attempted to rescind the offer to acquire Merrill Lynch for $50B when he discovered it was only worth about $35B, was the subject of intense pressure from the Fed, the Treasury, and the FDIC. One regional Fed bank president even threatened to get Lewis fired if he did not go through with the deal.
So now we have documentary proof, from the Fed’s own internal files, that it extorted B of A to buy Merrill Lynch.
Think about the horror of this:
A government in a democracy forced a private banker to waste—to throw away—FIFTEEN BILLION DOLLARS of his shareholders’ and depositors’ money. Surely, an indictment and civil litigation must be coming.
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