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Feds Put 'Gun to Head' of BofA's Lewis on Merger

By John Johnson, Newser Staff

Posted Jun 10, 2009 11:32 PM CDT

(Newser) – 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.

Bank of America CEO Ken Lewis in February. (AP Photo/Mary Altaffer, file)

Bank of America CEO Ken Lewis in 2008. (AP Photos/Bebeto Matthews, file)

Federal Reserve Board Chairman Ben Bernanke. (AP Photo/Ron Edmonds)

Treasury Secretary Henry Paulson. (AP Photo/Gerald Herbert)

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COMMENTS

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Showing 3 of 4 comments

northeast

Jun 11, 2009 5:52 AM CDT

Wow, Newser's a little slow...this has been out for almost a month lol

drlarrymitchell

Jun 11, 2009 5:10 AM CDT

Rational people blame greedy, short-sighted assholes for this.

gilgordan

Jun 11, 2009 4:36 AM CDT

I wonder how it felt for Mr. Lewis, he in the past has put a number of guns and even pulled triggers on a bunch of folks, internally and externally in his global dealings. Now he cries foul, what a leader! As much as despised his predecessor, at least he would have taken a bullet rather than be bullied.

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Feds Put 'Gun to Head' of BofA's Lewis on Merger

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Feds to Bank of America: Get Your Act Together

Or else face public action

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Geithner: Bernanke Ouster Would Freak Out the Market

But Treasury Secretary isn't worried about reconfirmation

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Fed, Treasury want banks to raise more capital first

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Ben Bernanke • Bank of America • Federal Reserve • Henry Paulson • merger • Merrill Lynch • Treasury Department • John Lewis • Wall Street bailout

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Feds to Bank of America: Get Your Act Together

Or else face public action

Fed Duo Sounded Alarm Over AIG 'Gifts' to Banks

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

Geithner: Bernanke Ouster Would Freak Out the Market

But Treasury Secretary isn't worried about reconfirmation

Citi, Wells Fargo Clash With Feds Over Repaying TARP

Fed, Treasury want banks to raise more capital first

Far Right, Left Rage Against Bernanke

Unlikely coalition of activists of all stripes target Fed chair

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More News

What is Newser?