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Kenneth Lewis, the chief executive of the Bank of America, is in trouble with some shareholders because the bank's stock price has tanked. The selloff was precipitated, in part, by his decision to buy Merrill Lynch, the brokerage house. That is the context for Sharyl Attkisson's report on CBS, in which she lifted the curtain on behind-the-scenes power plays at the nadir of last fall's financial meltdown. Attkisson's report was based on depositions she obtained from Andrew Cuomo, the Attorney General of New York State. In them Lewis recounts the strong-armed tactics he claims then-Treasury Secretary Henry Paulson used on him to prevent him from reneging on his promise to take over Merrill Lynch.
The takeover was agreed to last September but three months later "a staggering amount of deterioration" was discovered in Merrill Lynch's books: over a span of just six days, the brokerage house lost $3bn. According to Attkisson's report, Lewis wanted to back out of the deal; Paulson threatened to have him fired as BofA CEO if he did; Lewis agreed to go ahead in exchange for billions of federal dollars; Paulson stated that he was requested to threaten to fire Lewis by Chairman Benjamin Bernanke of the Federal Reserve Board; Lewis claims he was instructed to keep the disastrous state of Merrill's books secret by Paulson and Bernanke.
Was this "improper or illegal?" Attkisson wondered. "Nothing like this has ever happened before."
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