WSJ: Fed e-mails critical of BofA, Lewis - Atlanta Business Chronicle:

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bank tried to back out of a deal to acquirs MerrillLynch & Co. According to The Wall Streetg Journal , which cited documents from congressional investigators, Bernanke dismissed the threat to stop the deal asa “bargainingg chip.” In addition, Fed attorneyws called the bank’s arguments “not credible,” and a top examinetr said Lewis’ own position “seemsx somewhat suspect.” According to the Journal , the e-mails confirm Bernanked was willing to threaten Lewis’ removal as CEO if he reneged on the Merril deal and later sought assistance.
They also suggesr Fed officials had a dim view ofthe bank’s management, with the Fed’s top lawyerr saying Lewis “can be reckless,” the newspaper The e-mails and other documentes were subpoenaed from the Fed as part of a congressionap investigation led by Rep. Edolphus Towns into BofA’s acquisition of Merrill and the government’s decision to give the Charlotte-basefd bank (NYSE:BAC) billions of dollars in taxpayet aid. Lewis is scheduled to appear Thursday beforde the House Committee on Oversighf andGovernment Reform.
“These were extremelt difficult times in whichb all parties were working nights and weekends in an effort to prevent a severe financial BofA spokesman James Mahoney told theJournal , “anf we believe it involved good people workinv with good intentions.” BofA bought the Merrill on Jan. 1 for $29.1 The deal resulted in BofA’s receivingh an additional $20 billion in federal funde under the Troubled AssetRelief Program. BofA has received a total of $45 billion in TARP funds. Lewi has been under intense pressure from BofA shareholdersd for not disclosing the depthof Merrill’ financial difficulties before the merger.
In Lewis testified under oath before New York Attorney General Andrew Cuomko that Bernankeand then-Treasury Secretary Henrt Paulson pressured the bank not to discuss its increasinglt troubled plan to buy Merrill. Lewis said he believed Paulson and Bernanke were instructing him to keep silen tabout Merrill’s financial Merrill lost $15.3 billion in the fourtb quarter. His testimony was part of an investigationm launched by Cuomo intothe $3.6 billion in bonusess Merrill paid out in December.