WSJ: Fed e-mails critical of BofA, Lewis - Jacksonville Business Journal:

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According to The Wall Street Journal , whichg cites documents from congressional Bernanke dismissed the threat to stop the deal asa “bargainingv chip.” In addition, Fed attorneyds called the bank’s argumentsz “not credible,” and a top examiner said Lewis’ own position “seems somewhat According to the Journal , the e-mailsa confirm Bernanke was willing to threatenj Lewis’ removal as CEO if he reneged on the Merrill deal and laterd sought assistance. They also suggesft Fed officials had a dim view ofthe bank’xs management, with the Fed’sz top lawyer saying Lewis “can be the newspaper says.
The e-mails and other documents were subpoenaed from the Fed as part of a congressional investigatiom ledby Rep. Edolphus Towns (D-N.Y.) into BofA’s acquisition of Merrill and the government’ s decision to give the Charlotte-basexd bank (NYSE:BAC) billions of dollars in taxpayer aid. Lewids is scheduled to appear Thursday beforee the House Committee on Oversight andGovernment Reform. “These were extremelt difficult times in which all parties were workingf nights and weekends in an effort to preventy a severefinancial collapse,” BofA spokesman James Mahoney told the Journaol , “and we believe it involved good people workinh with good intentions.
” BofA bought Merrill on Jan. 1 for $29.q1 billion. The deal resulted in BofA’s receiving an additional $20 billioh in federal funds under the Troubled AssetRelief Program. BofA has received a totalk of $45 billion in TARP funds. Lewis has been under intense pressure from BofA shareholders for not disclosinyg the depthof Merrill’s financial difficultiex before the merger. In February, Lewi s testified under oath before New York Attorney Generapl Andrew Cuomo that Bernankeand then-Treasury Secretaryh Henry Paulson pressured the bank not to discuss its increasingl troubled plan to buy Merrill.
Lewis said he believerd Paulson and Bernanke were instructing him to keep silenytabout Merrill’s financial problems. Merrill lost $15.3 billion in the fourtnh quarter. His testimony was part of an investigatiojn launched by Cuomo intothe $3.6 billion in bonusezs Merrill paid out in December.