Sorry Bernanke and Paulson, we need more than an off-the-record statement through Steve Liesman on Ken Lewis’s claim that he was told to clam up about troubles at Merrill Lynch.
So far, all we have is the Bank of America (BAC) CEO’s story, but if Attorney General Andrew Cuomo is actually serious about figuring out what happened, then he has to get both Ben Bernanke and Hank Paulson under oath. And if there are serious disagreements between what they say and what Lewis is saying, then someone’s committing perjury.
Withholding critical information from shareholders is not something to be taken lightly. What was the justification for this? Bernanke and Paulson may have believed that in an exceptional circumstance — the entire financial system hanging in the balance — that this law ought to have been ignored.
But the implication is that it was somehow the responsibility of Bank of America shareholders (who have suffered greatly since the deal) to bail out the broader system. If bailouts are official government policy, then the costs should fall to everyone.
All this being said, we wonder if Cuomo has bitten off more than he intended to chew. He might’ve imagined this all to be something of a political stunt in the beginning. You know, grill Ken Lewis, get some headlines, let it slide. But he’s stumbled onto something fairly profound that will force him to talk to some fairly big fish. Is he up for it?