BofA-Merrill Scandal: A Scapegoat Will Be Found

Congressman Darrell Issa (R-CA) claims to have evidence supporting Ken Lewis’ original contention that he as threatened by government officials for contemplating pulling out of the BofA-Merrill (BAC) deal.

Let’s review. Two weeks ago, Lewis pointed the finger at Paulson and Bernanke in testimony before Congress (see my post). This came after claims of government coercion that Lewis made in a he said-she said drama between Lewis and John Thain, the former head of Merrill Lynch. Clearly, someone is lying and this drama has become a political football. Translation: a scapegoat will be found – justifiably or not.

So, now we have Issa going after the Fed after Obama presents his banking reform package asking to increase Federal Reserve power. The narrative against the Fed reads as follows: first these guys were asleep at the wheel on regulation, allowing a mortgage bubble to spin out of control. Then, they recklessly lower interest rates, encouraging speculation and making the bubble that much larger. Now, we see the Fed strong-arming banks in a desperate attempt to clean up the mess they made. And, they are covering it up to boot. Do you want these people to have more power?

This argument is coming to a TV screen near you very soon – and most of it is justified.

Below is the clip of Issa making his case that the Federal Reserve coerced Lewis and is now covering it up. (By the way, I should point out that this doesn’t get Ken Lewis off the hook for potentially disregarding his fiduciary responsibilities.)

Comments

[user396040]

Based on Lewis's current position, it appears that he was in violation of his fiduciary duty to B of A shareholders and should have gone public at the time rather than knuckling under and whining about it now.

2009 Jun 25 12:15 PM

[notsosmart]

this is easy.just blame made-off.he's in the can already.all these hearing before congress.anybody ever go to jail for perjury?

2009 Jun 26 03:08 PM

[user396040]

Alger Hiss, for one.


On Jun 26 03:08 PM notsosmart wrote:

> this is easy.just blame made-off.he's in the can already.all these
> hearing before congress.anybody ever go to jail for perjury?

2009 Jun 26 03:40 PM

[notsosmart]

alger hiss.LOL

2009 Jun 26 09:15 PM

[EttU]

Lewis should be fired and both he a Thain should do a little jail time.

Greed, corruption should not be rewarded. Their bonuses should be clawed back and payments made to the board should be clawed back as well.

All of this is wishful thinking, since when do these people pay the price for destroying stockholder value and helping to destroy our nations economy.

A disgruntled BofA customer and investor.

2009 Jun 27 05:49 PM