If this story is true it is very disturbing and raises many questions about Henry Paulson and Ben Bernanke, again. The other problem that this story raises is where has Congress been? As much as I think Andrew Cuomo is fantastic and exactly who we need to move this mess along it's hard to imagine where Congress has been. What are they doing? Are they so deeply tied to Wall Street that they can only put together made-for-nightly-news TV clips with snappy questions? Those meetings in front of TV cameras are consistently a big waste of time because they rarely accomplish anything other than keep the faces of a few in the nightly news reports. Great personal PR but what about follow through that benefits the public?
Meanwhile, Cuomo is getting the goods and will make the information public later today.
The Journal said in Thursday's edition that Lewis doesn't say in the transcript that he was told specifically to remain silent about Merrill's burgeoning losses. But the paper quotes Lewis as testifying that disclosing that information "wasn't up to me," and that he was warned by Paulson and Bernanke that failing to complete Merrill's takeover would "impose a big risk to the financial system."It may even be worth calling in Paulson to speak in front of the cameras one more time just to see the look on his face.
Citing a person familiar with the matter, the newspaper said Paulson told the NY AG's office last month that Lewis may have misread some remarks about Treasury's disclosure requirements as instead pertaining to his bank's obligations.
The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under and insurer AIG received its initial government support. Both the government and Wall Street were under substantial pressure to contain the financial meltdown.
