The Federal Reserve didn’t advise Bank of America or CEO Ken Lewis “on any questions of disclosure,” a spokeswoman for Fed Chairman Ben Bernanke said.
Lewis has told New York’s attorney general that then-Treasury Secretary Henry Paulson and Bernanke pressured him in December not to discuss issues with its pending purchase of Merrill Lynch.
“It has long been the Federal Reserve’s view that questions of this nature are best addressed by individual institutions and their legal counsel, as they are in a position to understand clearly their obligations and responsibilities,” the spokeswoman, Michelle A. Smith, said.–WSJ
Of course, this doesn’t answer the question of whether Bernanke told Paulson to “advise” (e.g. threaten) Lewis,* or if he and Paulson came to that decision together, only that Bernanke himself didn’t directly go to Lewis and say “do it and die, pal!”
*Which is what Cuomo’s letter claims.
Update: Paulson says he was not acting at the behest of Bernanke when he threatened Lewis, as was previously stated by Cuomo.
Then-U.S. Secretary Henry Paulson was delivering his own message, and not the Federal Reserve’s, when he told Bank of America CEO Kenneth Lewis that the bank was in a binding merger contract with Merrill Lynch and Co., a spokesman for Paulson said on Thursday. “Secretary Paulson’s words were his own,” the spokesman said. “(Fed) Chairman (Ben) Bernanke did not instruct him to indicate any specific action the Fed might take,” a spokesman for Paulson said in a statement. New York Attorney General Andrew Cuomo said on Thursday that Lewis was pressured by Paulson and Bernanke to go through with Bank of America’s planned merger with Merrill Lynch.
Is Paulson backtracking or did Cuomo have it wrong all along?
Did KL go into a dark room at a Lincoln Nebraska University frat house?
What Michelle A. Smith said is that the Fed will not be answering any questions, so Cuomo can go pound sand.
And furthermore, Bank of America is on its own here and had better lawyer up if they are going to be talking to the AG and the press because there will likely be a slew of shareholder suits.
But what Michelle really wants to say is that banking executives should understand their obligation to “forget” that these conversations ever happened or, since they were foolish enough to leave the details in the Board minutes, they should plead the 5th.
Do you know who I am? I’m Ken Lewis! I made my bones in this business when you were still chasing cheerleaders!
So maybe he was told not to disclose negative aspects of the deal, but did Hank and Benji tell him to tout this as the greatest deal ever (since his last greatest deal ever)?
If you’re sitting at a table and you don’t know who the patsy is – it’s KL.
http://www.americanbanker.com/article.html?id=20081201CJERI6GU
It’s just the timing that makes it so much fun.
@EricM
The timing = December 5, 2008
@ 4
What is different about Ken Lewis lying and everyone else lying now?
Hope is the new “best strategy”.
If we have the “poltical will” we will prevail.
Same as going onto Iraq.
Bottom line don’t argue with the federal government. They are trying to save America. And don’t question how they are doing it.
Look @ Bernanke. Look at the expansion and polticalization of the Chairman of the Federal Reserve.
So 2 years from now when the U.S. is looking at defaulting on it’s debt do what start to question the wisdom of what we are doing now?
It took 2 years for the MSM to start to question what the hell was going on in Iraq. And we still don’t know what happened to the planes full of money that the U.S sent to iraq.
The unintended consequences of what the U.S. is doing now will be catastrophic.
Thanks for cutting the top off the pic Bess.
One more look at Pizza-the-Hut and I was going to throw up my mother’s meatballs.
Leave Ken alone!!!!
@6,
Yes, the proximity, the proximity.
8,
I know it’s late, and I just got home from work…but that was all sorts of great.
@3 “I’m Mickey Abott!! I was playing Punky Brewster when all of yous was nothin’!!”
Paulson: “Bring out the Gimp.”
Bernanke: “Gimp’s sleeping.”
Paulson: “Well, I guess you’re gonna have to wake him up now, won’t you?”
@7 I agree that you should get a gun and lock yourself in a room.
One think I don’t understand is why you default on debt when you have the ability to print money.
This is ridiculous and bordering on comedy.
Arrest them all for racketeering, embezzlement, fraud, treason and terrorism for good measure!
CODE PINK!
FUCK YEA!
Something is very wrong! I can remember a time when Integrity, Honesty and Truthfulness were very important character traits that most people valued so highly in our leaders.
Especially our own government leaders! What has happened? Why have our standards been lowered to our current embarrassing levels?
This can not go on! We can no longer accept and tolerate this disgraceful behavior!
Where is the “We the People’s” missing 1.2 TRILLION? It’s not The Fed Scam’s” money! This money belongs to “We the People” of the United States of America!
Watch this video in disbelief!
Alan Grayson (High Quality Version): Is Anyone Minding the Store at the Federal Reserve? You Tube
http://www.youtube.com/watch?v=cJqM2tFOxLQ&eurl=http%3A%2F%2Fwww%2Etomdavidd%2Ecom%2Fblog%2F&feature=player_embedded
I want to know the truth now!
Did Ben Bernanke embezzle our money?
http://www.tomdavidd.com/blog/
Something is very wrong! I can remember a time when Integrity, Honesty and Truthfulness were very important character traits that most people valued so highly in our leaders.
Especially our own government leaders! What has happened? Why have our standards been lowered to our current embarrassing levels?
This can not go on! We can no longer accept and tolerate this disgraceful behavior!
Where is the “We the People’s” missing 1.2 TRILLION? It’s not The Fed Scam’s” money! This money belongs to “We the People” of the United States of America!
Watch this video in disbelief!
Alan Grayson (High Quality Version): Is Anyone Minding the Store at the Federal Reserve? You Tube
http://www.youtube.com/watch?v=cJqM2tFOxLQ&eurl=http%3A%2F%2Fwww%2Etomdavidd%2Ecom%2Fblog%2F&feature=player_embedded
I want to know the truth now! Did Ben Bernanke embezzle our money?
http://www.tomdavidd.com/blog/