Cuomo: Merrill Lynch Misled Congress On Bonuses

[babylonsister]

I hope Cuomo is making them all sweat bullets! I don't think Congress is going to take this lightly. Stand by. :popcorn:


http://tpmmuckraker.talkingpointsmemo.com/2009/03/cuomo_merrill_misled_congress_on_bonuses.php?ref=fp3

Cuomo: Merrill Misled Congress On Bonuses
By Zachary Roth - March 12, 2009, 11:18AM


It looks like Andrew Cuomo has escalated things in the Merrill Lynch bonus probe.

Cuomo is now accusing the firm of misleading Congress on the matter. In a court filing made yesterday, according to the Wall Street Journal, Cuomo included a November 24th letter, sent by Merrill to a House oversight committee, assuring lawmakers that no decisions on yearly bonuses had yet been made. Cuomo also filed testimony from a Merrill director, saying that on November 11th, the firm's compensation committee had decided that Merrill would pay bonuses in December, rather than January, when bonuses were usually paid (and when the firm would be under the control of Bank of America.)

Cuomo is trying to convince a judge to force Bank of America to disclose information about who got the bonuses -- which the company has so far been refusing to do.

The House Oversight committee, chaired at the time by Rep. Henry Waxman (D-CA), had asked Merrill for information on the bonuses, as part of an effort to ensure that the firm wasn't using bailout money for compensation.

There's another interesting nugget in the Journal's report:

Mr. Cuomo also disclosed that John Thain, Merrill's chairman and chief executive, was told that he would lose any chance of succeeding Kenneth Lewis as CEO of Bank of America if Mr. Thain kept pressing Merrill directors last fall for a 2008 bonus of as much as $40 million.

"He was told very strongly that you should not do that; that you would damage yourself with the Bank of America board if you do that, and if you ever wanted a chance to be in the running for my job, then that would eliminate it," Mr. Lewis said in his testimony last month, according to the filing.

Thain soon lost his chance to succeed Lewis anyway, as he was ousted in mid January amid anger over the bonuses and Merrill's massive fourth quarter losses.

[babylonsister]

1. UPDATE: Congress Probing Merrill For Obstructing Bonus Investigation

http://tpmmuckraker.talkingpointsmemo.com/2009/03/congress_probing_merrill_for_obstructing_bonus_inv.php

Congress Probing Merrill For Obstructing Bonus Investigation
By Zachary Roth - March 12, 2009, 1:44PM


The House Oversight Committee has launched an investigation into whether Merrill Lynch misled it when the firm told the committee, in a letter sent last November, that no decisions had been made on bonuses.

As we noted earlier today, New York Attorney General Andrew Cuomo, who is probing the bonuses, included the letter, dated November 24, in court filings made yesterday. Cuomo also included testimony from a Merrill director, saying that the firm decided November 11th to award bonuses that December. Cuomo, who is trying to persuade a judge to compel Bank of America to disclose information on the bonuses, suggested that the testimony implies Merrill's letter was designed to mislead the committee, which was conducting its own invesitgation of the bonuses, and was chaired at the time by Rep. Henry Waxman (D-CA).

Congress rarely takes kindly to being misled, and this appears to be no exception. The committee's current chair, Rep. Ed Towns (D-NY), today issued a statement asserting that the Cuomo filings "raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee's investigation," and adding that Towns had directed committee lawyers to begin a "detailed investigation of this allegation."

Lying to a Congressional investigation, even in a letter, could potentially lead to perjury charges. There's an important difference between misleading and lying, however, and neither Cuomo nor Towns have accused Merrill of the latter.

Still, things are getting interesting...

The full statement from Towns follows after the jump ...


CHAIRMAN TOWNS STATEMENT ON THE POSSIBLE OBSTRUCTION OF THE COMMITEE'S INVESTIGATION INTO EXECUTIVE COMPENSATION AWARDS

"The Committee takes very seriously Attorney General Cuomo's allegation that Merrill Lynch provided misleading information to Congress regarding bonuses for its top executives. These filings raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee's investigation into executive compensation practices and the awarding of bonuses at the company.

"To get to the bottom of this matter, I have directed Committee attorneys to begin a detailed investigation of this allegation, focusing on two primary issues: (1) did Merrill Lynch executives attempt to cover-up the decision to pay its top employees $5.8 billion in bonuses on the eve of its merger with Bank of America; and (2) as a part of this cover up, did Merrill Lynch executives deliberately attempt to mislead this Committee in their November 24, 2008 letter, asserting that 'incentive compensation decisions for 2008 have not yet been made.'

"Committee attorneys are also reviewing the responses of other major financial institutions to our October 2008 letters regarding executive compensation and the use of TARP funds. We will not hesitate to exercise every means at our disposal to protect the integrity of the Congressional investigation process and to bring real transparency to the use of TARP funds."

[Supersedeas]

2. meanwhile the shiny happy people at CNBC gaze at Erin Burnette's smile

[babylonsister]

3. Haven't heard a word about this from anyone, not just cnbc. Pretty

sad.

[redqueen]

4. Yet hardly surprising. (nt)

[babylonsister]

5. The media is dumping on this admin because of the bailout, and

they can't cover this? You're right, not surprising, but geeze. Ignorant.

[redqueen]

7. Oh no, not "can't"... "won't".

Seems to me that the rich are a protected class. IMO Madoff wouldn't be getting the treatment he's getting if he hadn't screwed over so many other wealthy people so badly.

[malaise]

6. We'll hear about this from KO, Rachel, Shuster

and Bill Moyers. M$Greedia doesn't want to annoy advertisers. I'm shocked I tell you...shocked.

[babylonsister]

8. It's a shame. Why even cover up for these bastids? 'It's our money',

but I guess that only matters when they're blaming the Obama admin. :eyes: