Freedom, how long will it last?

Republicans say that the Federal Reserve threatened to expel Bank of America Chief executive Kenneth Lewis if they did not go along through with the strategy to overtake Merrill Lynch & Co. This came after they reviewed investigation documents. They also said that there was proof that the government withheld information related to the merger from the public, exactly violating the Freedom of Information Act. Luckily, there was no confirmation that the government attempted to get Bank of America to hide Merrill?s losses from shareholders.

The House Oversight and Government Reform Committee is currently looking into preliminary claims that several top government officials, including then Treasure Secretary Henry Paulson and Fed Chairman Ben Bernanke, tried to get Kenneth Lewis to go through with the Merrill purchase and not unveil to shareholders how badly Merrill Lynch was doing fiscally. Lewis is thought to be testifying in front of the board today.

Bank of America has received $45 billion in bailout money, but as said here a week or so in the past, they have been working on raising capital to become independent of the government assistance. So far, they have sold $17 billion or more in extra stocks and raised at least that in liquidation funds. Some of the federal support was apparently going to put back the losses they would incur by buying Merrill Lynch.

Republicans said in a memo that Paulson and Bernanke ?put a gun to the head? of Lewis and the board of directors at Bank of America to force the merger between Bank of America and Merrill Lynch even though CEO Lewis allegedly ?felt it was hi duty to his shareholders to try his luck in the legal system and back out of the deal.? Republicans refer to several documents including an e-mail by an employee at the Richmond Federal Reserve that said that Bernanke made it apparent that if he backed out of the transaction, ?management is gone,? as evidence of the intimidation.

Just a small amount weeks after the transaction was finished, Bank of America released their fourth-quarter information where they said a $2.39 billion loss while Merrill Lynch claimed a loss of over $15 billion. Thus far, Merrill Lynch has fallen more in the pits of ?no man?s land? whereas Bank of America has been cutting losses with talented financial decisions and the sale of company interest.