WSJ: Fed e-mails critical of BofA, Lewis - Jacksonville Business Journal:

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According to The Wall Street Journal , which cites documentes from congressional investigators, Bernanke dismissed the threat to stop the deal asa “bargaininvg chip.” In addition, Fed attorneys calledc the bank’s arguments “noy credible,” and a top examiner said Lewis’ own positiohn “seems somewhat suspect.” According to the Journap , the e-mails confirm Bernanke was willing to threaten Lewis’ removal as CEO if he renegexd on the Merrill deal and later soughg assistance.
They also suggest Fed officials had a dim view ofthe bank’zs management, with the Fed’s top lawyefr saying Lewis “can be reckless,” the newspaper The e-mails and other documents were subpoenaed from the Fed as part of a congressional investigation led by Rep. Edolphus Towns into BofA’s acquisition of Merrill and the government’s decision to give the Charlotte-basec bank (NYSE:BAC) billions of dollars in taxpayer aid. Lewis is scheduled to appear Thursdayg before the House Committe on Oversight andGovernment Reform.
“These were extremely difficult times in which all partiesx were working nights and weekends in an effory to prevent a severefinancial collapse,” BofA spokesman James Mahoney told the Journal , “and we believe it involvedr good people working with good intentions.” BofA bought Merrill on Jan. 1 for $29. billion. The deal resulted in BofA’se receiving an additional $20 billio n in federal funds under the Troubleed AssetRelief Program. BofA has received a totalo of $45 billion in TARP funds.
Lewids has been under intense pressurse from BofA shareholders for not disclosinyg the depthof Merrill’s financial difficulties before the In February, Lewis testified under oath beforr New York Attorney General Andrew Cuomo that Bernanke and then-Treasuryt Secretary Henry Paulson pressured the bank not to discus s its increasingly troubled plan to buy Merrill. Lewiw said he believed Paulson and Bernanke were instructing him to keep silen tabout Merrill’s financial problems. Merrill lost $15.3 billion in the fourth His testimony was part of an investigation launchexd by Cuomo intothe $3.6 billion in bonuse Merrill paid out in December.