Posted on 07/16/2009 1:40:59 PM PDT by Ernest_at_the_Beach
WASHINGTON (Reuters) - U.S. lawmakers on Thursday slammed former Treasury Secretary Henry Paulson over the government's role in Bank of America's merger with Merrill Lynch, saying authorities suppressed information about losses and bullied executives into going through with the deal.
"The American people, investors, and the Congress were kept in the dark," Rep. Edolphus Towns told Paulson at a hearing.
"There was no oversight to determine whether this arrangement made sense. In my view, this is unacceptable and must be prevented from happening again," said Towns, the New York Democrat who chairs the House of Representatives Oversight and Government Reform panel.
Paulson gave little ground, acknowledging that he told Bank of America chief executive Kenneth Lewis the bank's management and board could lose their jobs if the company backed away from the merger, but arguing he had done nothing inappropriate in warning Lewis that such a move would be a colossal blunder and might have repercussions.
"I was attempting to send a very strong message to Ken Lewis," he said.
Government pressure on Lewis and Bank of America to go through with the deal came to light in April and has become a focal point of congressional ire over extensive bailouts of the financial system. Federal Reserve Chairman Ben Bernanke and Bank of America's Lewis testified at previous hearings.
"As most people look at this, they see a clear pattern of intimidation and deception," Rep. Jim Jordan, an Ohio Republican, said on Thursday.
(Excerpt) Read more at reuters.com ...
Live-Blogging Henry Paulson on Capitol Hill
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Former Treasury Secretary Henry M. Paulson Jr. testified before Congress on Thursday about his role in persuading Bank of America to complete its acquisition of Merrill Lynch. Zachery Kouwe of The New York Times live-blogged the hearing on DealBook, with the most recent posts at the top.
2:56 p.m. | It’s a Wrap: The hearing is adjourned. Maybe Mr. Paulson can still make that 4:45 flight.
2:51 p.m. | Bair and Cox Next?: In his closing remarks, Mr. Towns asks how Merrill’s losses went from $9 billion to $20 billion in such a short amount of time late last year. Mr. Paulson says he simply doesn’t know how Merrill’s losses accelerated so quickly. “I saw and witnessed things I never had seen before,” he says, referring to the state of the markets at the time.
Mr. Towns says the committee needs to hear from Christopher Cox, the former chairman of the Securities and Exchange Commission, and Sheila Bair, the chair of the Federal Deposit Insurance Corporation.
In a particularly contentious exchange, Marcy Kaptur, Democrat of Ohio,...
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2:15 p.m. | Goldman and Warren Buffett: In a particularly contentious exchange, Marcy Kaptur, Democrat of Ohio, claims Mr. Paulson knew all along that there were problems in the financial system and orchestrated the TARP to be the biggest public bailout of the private sector in history.
“It looks like some very rich people are now profiting,” Ms. Kaptur says, referring to the record-setting quarterly profits at Goldman Sachs. She compares the terms of the government’s TARP investment in Goldman with the terms that Warren Buffett, the famous investor, got on his preferred stock investment in Goldman. Why did Mr. Buffett get a better deal than taxpayers?
Mr. Paulson’s answer: At the time, Mr. Buffett’s type of capital wasn’t available. “You do not stop a financial panic by offering capital to banks at the only terms available in the middle of a crisis,” he says.
Paulson and Bernacke would be under indictment in the Dept of Justice wasn’t totally corrupt.
Paulson: Government's action wasn't perfect, but needed ( Congressional Flogging continues )
Under indictment ...for what?
OK, how many stories can there be where Congress says “we don’t know what’s going on” before the American people start to acknowledge that they don’t?
Bush's Sec. of Treas? He's up next.
Paulson/Goldman/Congress/Obama/Bush2 and many others need a Special Prosecutor to investigate. The SP needs to be assigned by the Taxpayers that were against their will made LIABLE for $10 TRILLION...it is clearly unconstitutional!
That was 750B and 10% has already been paid back. (Of course the libtards are putting it toward new spending as THEY careen toward trillions of new debt.)
Cumulative taxpayer liabilities would seem to be > $10T...adding all stimulus from the last 12 months.
The commies are responsible for the rest.
If you need any more proof that Congress, the inmates, are running the Asylum, you’re not paying attention.
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