Ben Bernanke and Henry Paulson may have leaned on Bank of America CEO Ken Lewis too heavily last year when he tried to back out of a deal to acquire Merrill Lynch, say congressional investigators. In fact, a GOP briefing document says the two Bush officals "put a gun to the head" of Lewis "in order to force through a merger, even though (Lewis) felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal,” Politico reports. Lewis appears before a House panel today.
The BofA CEO wanted to scrap the acquisition when the true picture of Merrill's dire financial straits emerged, but former Fed chief Bernanke and former Treasury chief Paulson wouldn't have it. Bernanke dismissed the threat as a "bargaining chip" in an email, one of several that have been subpoenaed from the Fed as part of the congressional investigation.