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A former Treasury Secretary Henry Paulson may be forced out of hiding.
And become their next safe.
To face does not -- angry lawmakers this after bank America's CEO Ken Lewis defended his decision.
To go ahead with last year's takeover of Merrill Lynch he also stayed in the government's sort of threatened to remove him and other executives -- the deal did not go through.
Speaking on last night -- democratic congressman Dennis Kucinich says he's skeptical.
Of the CEO story.
There's plenty of evidence to suggest.
Lewis knew exactly that Merrill Lynch was in a lot of trouble he took it on anyway and then when he took united try to blame the -- -- All right for more reaction Republican congressman Jason -- fits of you Todd joins me from Washington DC.
He's a member of the oversight and Government Reform Committee.
And with me here in studio is -- -- he's an analyst with -- -- security's good morning gentlemen thank you for being here.
All right congressman let me start with Yale what do you think -- -- terms of what you saw and witnessed yesterday.
Dean Ken Lewis justify.
Why he wanted to initially pull out of that -- Merrill Lynch and why ultimately went through effect.
Well in mid December of excuse me of 2008 when he had mentioned.
To the secretary that he was considering.
Pulling out of the Maryland's deal.
It really does appear as -- the Treasury Secretary threatened it now it.
The CEO would use that word threatened but when you offer and suggest that you might fire him.
And let go of the entire board of directors I think they consider that a threat.
And if you look at the the written notes that we see from other people were part of the meetings and telephone conversations.
I think secretary Paulson has a lot -- answer for because it looks like they way overstepped their bounds.
And we can't wait to get him before the oversight and Government Reform Committee and asking these hard questions.
He's a congressman -- -- as you walked out -- along with many of your members on the house oversight committee.
There was talk about how quickly you could get the former Treasury Secretary to testify and perhaps even the Fed Chairman.
Where does that situation stand do you believe you can actually get the Fed Chairman to testify and that's.
Well we -- I think we have questions for mr.
Bernanke we also have that questions for Timothy Geithner because he was involved in many of these along at these steps is well.
And so not only do we have questions about the pressure that was put on Bank of America to make sure they -- on the acquisition.
I think we also have questions about how the TARP money was handled.
Because if you look at the testimony that Jim Jordan -- representative from Ohio was able to draw out.
Basically you had mr.
Lewis who was brought into our room in -- less than an hour of not knowing beforehand what they were gonna talk about.
There was that an extreme amount of pressure for them to take tens of billions of dollars.
An extraordinary amount of money without much as scientific approach to how much money you're gonna get wide -- to get it and we have a lot of questions about that as well.
-- what does this mean for Bank of America's missile which content is this about government intervention is is about -- -- -- -- responsibility to your shareholders.
What is due to be back.
I think it's very important -- the hearings go forward so that stockholders and in taxpayers understand.
Just exactly what happened in this transaction and I think maybe -- get more transparency from Bank of America concerning.
Other transactions that they get involved -- but I kind of feel that mr.
Paulson had no choice but to do would be did and I think that mr.
Lewis made the right decision to buy Merrill -- so in last analysis I think both men did the right things but it's fascinating to understand the process.
He has -- I want to play a little bit of when they can lewis' response yesterday specifically about whether or not that Merrill -- deal was the right deal.
And whether or not he had any regrets -- take a look for a second.
The Bill Lynch acquisition however also came with the promise of significant long term rewards.
Rewards Bank of America shareholders already beginning to -- Through the acquisition of Merrill Lynch we put together what looks to be the preeminent investment bank and brokerage firm in the world.
An organization that has already producing substantial profits not losses.
For a company.
Is that at the end of the day the reality check here was -- a good deal or not and boy was seen in the first quarter it looks like -- a good deal.
Well he paid way too much for the company I think that's that's fair to say but in terms of what he said about it being long term.
Positive for BankAmerica.
It is absolutely correct I mean.
Bank of America's the land -- company United States Merrill Lynch -- -- overseas Bank of America had no capability of selling.
Financial products to the white market it now has 161000 people to do that.
Bank of America was nowhere in equity underwriting Merrill Lynch -- that capability.
Merrill Lynch brings capability in trading that Bank of America didn't have it was a good deal for Bank of America in last analysis.
Congressman one of the things everybody talked about yesterday is why not put all parties on the witness stand together.
It's very hard to get transparency.
-- you have specifically here as CEO.
Who -- chief regulator at the end of the day has to continue to regulate him every single day if they're not sitting together next to each other.
And and revealing deet -- of those conversations.
-- today mean that I think the guy was kind of scared to say the truth.
Well I think you're absolutely right there's extraordinary pressure of mr.
Lewis has to continue to work with these very regulators.
And as says somebody in congress that's my deepest concern is that.
Here you have -- secretary of treasury putting extraordinary pressure on accompany mr.
Lewis's fiduciary responsibility just to its shareholders where the secretary of treasury has a different set of parameters of which is working.
And so I'm very concerned.
But then we have secretary of treasury or wasn't the -- a lot of those exchanges are between the -- -- is that all the app and and it's federal governor it's.
It looks like it's both again that's why we need to talk to mr.
Bernanke and mr.
-- -- you know.
-- I have I have to admit I interviewed Ken Lewis I know the management team over there.
He was very short and to -- in his responses but it was not.
A good day for him.
He didn't get specific on details about why this deal would ultimately be creative specific details about countrywide he was very and they -- all of his responses.
Does that hurt his credibility now with his shareholders and potential law sits.
I think so I think that he's always had this credibility problem ahead of them I think that.
There have been many instances in the past where he's made promises to shareholders which he has not kept however.
I still think he's one of the best CEOs if not the best CEO to run a large bank in the United States so.
-- all of -- flaws with all the problems that he represents in terms of his.
Communicating ability he really knows how to run a bank and I think that would be a shame if he was.
Separated from Bank of America.
Dick and I were sitting there yesterday toward the end of the testimony talking about it together.
First of all Walter Massey means chairman as a result of that annual shareholder meeting.
Where does he -- in in the management company get Ken Lewis were asked to leave and who could run this company.
He doesn't fit -- -- I mean basically Bank of America has a long history of bringing in people as chairman who sit there for a year two years.
And then go -- the chairman's position -- Bank of America is a -- position which means nothing.
-- will have no part in the company going forward I think the gentlemen who are in the running to run the company have to mr.
Lewis would be the head of the you have retail banking operation.
And I think maybe even CFO but I think that that's where you would look.
For the next step presenter on Bank of America but as I say I hope the next business analysts.
Finally congressman before we wrap up here just explain to me for a second why have you got subpoenaed the board of directors.
Well we want to see what sort of extraordinary pressure of the government was putting up on the board of directors as they were on on mr.
We have a lot of questions that have gone unanswered and what I worry about as the extraordinary pressure that the government was putting.
On the board of directors and the CEO to do things that we're not necessarily in the best interest of the shareholders of Bank of America.
All it will congressman in nineteen -- and add to both say gentlemen thank you very much for.
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