Congressman Dennis Kucinich (D-OH), Chairman of the Domestic Policy Subcommittee, and Congressman Edolphus Towns, Chairman of the Oversight and Government Reform Committee, today sent a letter to Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner. The letter cites a Wall Street Journal article published this morning that reports that Bank of America (BofA) CEO Ken Lewis, was pressured to withhold details pertaining to the BofA acquisition of Merrill Lynch from investors.
The full text of the letter to Chairman Bernanke follows:
April 23, 2009
Mr. Ben S. Bernanke
Chairman
Board of Governors of the Federal Reserve System
Twentieth St. and Constitution Ave. N.W.
Washington, D.C. 20551
Dear Mr. Bernanke:
As you know, on March 30, 2009 the Domestic Policy Subcommittee sent the Federal Reserve (“Fed”) a request for documents pertaining to discussions between the Fed, Treasury and Bank of America (“BOA”) that concerned BOA’s acquisition of Merrill Lynch & Co. Unfortunately, the Fed and Treasury have allowed the deadline to pass without producing the requested documents or informing the Committee about a date of compliance.
Today, The Wall Street Journal’s article on Ken Lewis’s statement under oath with the New York State Attorney General strongly implies that you and Secretary Paulson instructed Bank of America to file fraudulent reporting documents with the Securities and Exchange Commission (“SEC”). As you know, Mr. Kucinich asked SEC for an investigation into whether BOA made material omissions in filings with SEC, and SEC has confirmed that such an investigation is underway. If Mr. Lewis’s statement, as reported by the Journal, of discussions that occurred between you, Mr. Paulson and himself is accurate, then federal officials were potentially involved in knowingly denying BOA investors material information.
The implications of Mr. Lewis’ testimony, if accurate, are extremely serious. Under these circumstances failure to comply with the Subcommittee’s request raises the prospect that we will be forced to consider compulsory means to achieve compliance with our request. However, we would prefer your voluntary compliance. Therefore, we repeat the earlier request, and expand it to include “all documents prepared for internal use related to discussions with Bank of America and/or Treasury about compensation packages, bonuses, annual losses at Merrill Lynch, and federal guarantees against losses on Merrill Lynch assets, for the period August 1, 2008 through January 19, 2009.” We emphasize that the original and this expanded request also covers discussions relating to public disclosure of information about compensation packages, bonuses, and annual losses at Merrill Lynch, for the period referenced above. This request, we also emphasize, covers any federal loans or guarantees against potential losses at Merrill/BOA and public disclosure of those loans or guarantees. We further request that you provide a written response specifically to the implication that you suborned the filing of misleading information by BOA with SEC.
The Oversight and Government Reform Committee is the principal oversight committee in the House of Representatives and has broad oversight jurisdiction as set forth in House Rule X. An attachment to this letter provides information on how to respond to the Subcommittee’s request. In recognition of the fact that we are expanding the original request, but that a substantial portion of it reiterates a previous request, we ask that you provide all of these documents and the written response as soon as possible, but in no case later than 5:00 p.m. on Monday, May 4, 2008.
Dennis J. KucinichEd Towns
Chairman
Chairman Domestic Policy SubcommitteeOversight and Government Reform Committee
cc: Jim Jordan
Ranking Minority Member
Domestic Policy Subcommittee
Darrell Issa
Ranking Minority Member
Oversight and Government Reform Committee
1. Letter from Mary Schapiro, Chairman, Securities and Exchange Commission, to Congressman Dennis J. Kucinich (Apr. 13, 2009).
