Hank Paulson tells Congress he threatened Ken Lewis
Former Treasury Secretary Henry Paulson said he warned Bank of America (BAC) CEO Ken Lewis that regulators could remove him and other executives at the company if they pulled out of a deal to buy Merrill Lynch, he told a congressional committee investigating the deal.
Paulson told the House Oversight Committee that he "intended to deliver a strong message" to Lewis that "it would be unthinkable for Bank of America to take this destructive action for which there was no reasonable legal basis and which would show a lack of judgment."
Paulson's testimony follows appearances before the committee by Lewis and Federal Reserve Chairman Ben Bernanke. Lawmakers are trying to figure out whether Paulson and Bernanke improperly pressured Lewis to complete the deal even though Merrill Lynch's financial health was rapidly deteriorating.
"I believe my remarks to Mr. Lewis were appropriate," Paulson said. That echos Bernanke's comments. The Fed chief said the central bank acted with "the highest integrity" during talks with Bank of America when he testified before the panel three weeks ago.
The committee is also seeking to determine whether Lewis threatened to scuttle the merger in an attempt to gain additional government support for the deal. Lewis denied that during his testimony last month.
Rep. Edolphus Towns (D-N.Y.), the committee's chairman, called the merger a "shotgun wedding" during the panel's first hearing on the subject last month. Today, he said the deal seemed more like a "marriage of convenience" in which both Bank of America and the government got what they wanted.
"Was Bank of America really forced to go through with the deal, or was this an old-fashioned Brooklyn shakedown?" asked Towns, whose district is in that New York City borough.
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Reader Comments (Page 1 of 3)
7-16-2009 @ 12:19PM
bill said...
maybe there was more than a threat...this looks like the ole mafiosa deal..."do me now and I will protect you later". Why would a well bank buy a sick company that does nothing that is related to the bank's core business?
and let us not forget who made ML sick...the government's insistance to float bad loans made to sicker consumers using the market to "spread the risk" upon. the rest of the world...
Remember that FNMA was accused of hiding excess earnings? maybe someone then knew there was decay in the portfolio that was going to burn down the house.
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7-16-2009 @ 3:18PM
Mark said...
That's not all this SOB should admit to! He and his cronies are directly responsible for constructing this entire economic collapse for their profit and benefit!!! Want proof??? Just look at Goldman Sachs, JP Morgan, etc...they are all reaping, no, scratch that, RAPING the profits from Americans!! They should all be drug out into a town square and shot....Period.
7-16-2009 @ 1:04PM
Andy said...
Total mafia here. So i guess paulson is the fall guy. No matter, he is protected by the courts,banks and government. He will get off with nothing being done. Just more in your face banks saying yea we can do anything and what about it.
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7-16-2009 @ 1:40PM
Sandy said...
Paulsen is a liar from day one. He set the whole bailout thing in motion with his scare tactics. Now we have the entire administration not wasting a good crisis to steal trillions from Americans without any oversight. Just the same way they did with Frannie/ Freddie Mac in the 90's giving mortgages to poor people who shouldn't have them. Keep up the give away, America is just about bust and that useless healthcare Bill and cap and trade taxes should just about bankrupt whatever is still left. THIS BLAME FALLS ON THE DEMOCRATS NOW. Bush is gone the economy has spent triple of any administrtion on useless bribes for our so called leaders. America you will pay dearly especially the poor for your socalist votes.
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7-16-2009 @ 1:47PM
Dr Liz said...
I do not see where Paulsen had the authority to make, advise BAC of, and then impose an opinion on whether there was legal standing to invoke the MAC clause. That was for BAC's lawyers and a judge to hash through. Paulsen is an economist and does not have a license to practice law. He belongs in jail.
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7-16-2009 @ 2:02PM
Tom said...
Bush's appointing Paulsen was like appointing the fox to guard the henhouse.
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7-16-2009 @ 2:09PM
paulz said...
Paulson is now The biggest thief in the history of the world, big tough guys Bush/Cheney were obviously afraid of him, since they got on their knees before him, I don't expect anything better from Barry Obama, he takes his orders from Goldman Sachs as well
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7-16-2009 @ 2:29PM
ajgorm said...
The poor people should get the loans period.. They the note holders deregulated our system so they could sell the notes world wide in 1999/ regulation prevented them from selling them prior to this. Congress should not have allowed them to be insured with your jobs so to speak selling the loans or call them the notes guanteeing the deal giving false hopes that asset value would holdt he value it had. RECESSION. All the notes sold commercial too are holdinhg up this market by the FDIC and AIG with bail outs it is much bigger than sub prime loans this is world wide. The fed is trying to save the titanic from sinking with a bucket.
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7-16-2009 @ 2:58PM
Larry said...
Just shows that the crooks who control Wall Street are manipulating the politicians like puppets, ala "The Godfather" - pulling the strings
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7-16-2009 @ 3:15PM
Donna said...
What I want to know is why is not ONE SINGLE member of Congress standing up to this and to those Czars? Where is anyone in Congress with any moral integrity? I can think of only two with *some balls and that is Michelle Bachman and Bohener from Ohio and those two are not screaming loud enough about this!
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7-16-2009 @ 3:57PM
dang1067 said...
Now you see where all those TRILLION$$$$ of Stimulus the RepubliCvnts robbed from the taxpayers to pay BIG CEO's Bonuses and Golden parachutes linked to???
And Paulson wasn't alone, Bernake, Chenney and many other RepubliCvnts and few scvm two faced, fence jumping DemonCraps...
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7-16-2009 @ 4:05PM
ajgorm said...
paulson explained it to lewis only not both parties he is suppose to represent both parties fairly it is his duty to represent both parties fairly that is his job. You cant tell me what is wrong with this picure. If you buy my car and paulson our friend tells you it runs but leaves out the part about the cost to fix the engine that is dishonest you can not trust him to be honest to both parties..
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7-16-2009 @ 4:14PM
Pepe said...
REMEMBER THIS ADMINISTRATION WAS GOING TO BE TRANSPARENT!
NO ONE WHO MAKES LESS THAN $250,000 A YEAR WILL HAVE A TAX INCREASE.
THE NATIONAL DEBT WILL BE CUT IN HALF
AND CHRISTMAS WILL BE HERE SOON.
WAY TO GO DEMIs!
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7-16-2009 @ 4:34PM
befilga said...
GOVERNMENT OFFICIALS DEALING IN BLACKMAIL AND POWER PLAYS !
HMMM, NOTHING NEW HERE !
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7-16-2009 @ 4:49PM
lmc3959 said...
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." - Thomas Jefferson
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7-16-2009 @ 4:59PM
b said...
Transformational marxism known only to the public as "change."
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7-16-2009 @ 5:02PM
Jayhawk said...
Paulson wasn't the fall guy at first. They tried to blame it on Bernanke and Obama, but they couldn't.
It doesn't seem right that Wall street continues to oversee Wall street. Were not a society of family value republicans who bellieve in health car for all were a family of greedy take it while you can, fast trading republicans. Maybe we're not a democratic. society; we're just an economy.
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7-16-2009 @ 5:11PM
Russ said...
When are the guillotines going to start coming out is what I want to know?
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7-16-2009 @ 5:39PM
vladimir said...
By the way, in 1929, bankers were jumping out windows and haging themselves from the rafters of their offices..... NOW they cash bonus checks and buy beachfront condos at default prices for what THEY did to this economy. NOW they go on lavish vacations and flip the middle bird at America, while NOT looking like a banker on their off days so not to get their lights punched out! They steal from America due to the open door and safe combination the republican, capitallist machine of ZERO regulation handed to the thieves in the form of "Free Markets"! 5th largest bonus year - the SECOND largest economic disaster in our country's history! Makes sense to the ties and white shirt lot - and John Boehner and Michelle Bachman, for your edification suggest a majority owner shareholder, OUR GOVT, should NOT have a say on whether bonuses be paid or NOT - they say Govt STAY OUT..... I say shut your trap, you funged this thing up, you came to America to bail your a$$ out of the fire of YOUR making, and the PRETEND "conservatives" shout in alarm... Here is a nugget for you - you don't want intervention, get off your drugs by yourself. You don't want Govt imposition of policy, then DON'T ASK FOR THE AMERICAN'S MONEY, BRIGHT-LIGHTS!
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7-16-2009 @ 7:01PM
johnb said...
people only want to listen to infromation if its entertaining .i have talked about this stuff for years .but all you get are blank looks or ridicule,its a shame people dont tune out media nonsense ,but the powers that be dull the senses and do there work ,so to answer your question there will be no guillotine . they own the guillotine and have chopped away societies thirst for knowledge of themselves and everything else,still the truth is out there .spread it! its everyones civic duty.
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