- The Washington Times - Wednesday, June 10, 2009

House lawmakers on Tuesday said they have subpoenaed the Federal Reserve to hand over e-mails, notes and other documents related to its role in Bank of America Corp.’s acquisition of Merrill Lynch & Co.

The lawmakers issued the subpoena after claims that top government officials pressured Bank of America Corp. Chief Executive Officer Ken Lewis to complete the bank’s purchase of Merrill Lynch, threatening his job security. Mr. Lewis has testified that he had been advised by the officials, former Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke, not to disclose details of Merrill Lynch’s difficult financial position, said New York State Attorney General Andrew Cuomo.

The Fed and Mr. Paulson have denied pressuring Bank of America to buy Merrill Lynch.

“We expect to respond completely and fully as requested beginning today,” a Federal Reserve representative said.

The subpoena was issued by the House Oversight and Government Reform Committee. Bank of America’s Mr. Lewis planned to testify Thursday before the panel.

In prepared remarks, Mr. Lewis said his company considered stopping the deal at one point because of “significant, accelerating losses” at Merrill Lynch. The bank moved forward with the deal after the government offered to provide assistance, he said.

A few weeks after the deal was completed, Bank of America’s fourth-quarter earnings report showed the hit its balance sheet took on the Merrill Lynch transaction, making Mr. Lewis the target of shareholder anger. In January, Bank of America reported a $2.39 billion fourth-quarter loss and Merrill disclosed a more than $15 billion loss. The bank received $20 billion from the federal government in January after Mr. Lewis requested it to help offset mounting losses at Merrill.

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