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Letter (re: exec bonuses) from Cuomo and Frank to Bank of America's Ken Lewis

Letter (re: exec bonuses) from Cuomo and Frank to Bank of America's Ken Lewis

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Published by DealBook
From DealBook: Letter from Andrew Cuomo, New York attorney general, and Barney Frank, chairman of the House Financial Services Committee, to Bank of America's Kenneth Lewis demanding information on Merrill Lynch bonuses.
From DealBook: Letter from Andrew Cuomo, New York attorney general, and Barney Frank, chairman of the House Financial Services Committee, to Bank of America's Kenneth Lewis demanding information on Merrill Lynch bonuses.

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categoriesBusiness/Law, Finance
Published by: DealBook on Mar 09, 2009
Copyright:Attribution Non-commercial

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01/09/2012

 
New
York St:neUnited StatesOffice
0
f
the Attorney Gener;tlCongress
March
9,
2009
KeJUlethD.
LewisChairman, Chief Executive &.PresidentBank
of
America Corporation
100
Tryon StreetCharlotte, North Carolina 2820 Ic/o Cleary Gottlieb Steen & Hamilton
Re:
Bonus InformationDear
Mr.
Lewis:
We
write
to
demand
on
behalf
of
taxpayers
that
Bank
of
America immediately discloseindividual bonus data
for
all
individuals
at
Merrill Lynch
andBank
of
America
who
received2008 bonus awards
01'$:1
million or
more.
We
bel ieve that
as
a matter
of
transparency
and
disclosure, taxpayers
have
a
right
to
know where their
tax
dollars
go
once received
by
TARP recipients. Accordingly,
all
TARPrecipient institutions should disclose individualized executive bonus information
to
taxpayers.
As
you know, late last year Merrill Lynch moved
lip its
plalUled
date
to
allocate bonuses
and
then richly rewarded many
of
its executives.
MelTill
Lynch did this knowing
full
well
thatIhey
were going
to
suffer huge losses
for
the fourth
quarter
andthe
year.
At
the time
of
thebonusawards,
Merri
II
was
in
theprocess
of
beingacquired
by
Bank
of
Americo,
aT
ARP
recipient. Moreover, Merrill
Lynch
also
knew
at
t'he
time
thatthey
had
received a credit
line
of
billions
of
dollars
,in
TARP
funds.As
a result
of
Merrill's
h'uge
losses, taxpayers
were
forced
to
help
Bank
of
Americaacquire MerriU
by
providing billions
of
additional TARP
funds
as well
as
insurance againstlosses
from
Merrill's toxic portfolio.
In
short,
the
combined
Bank
of
America-Merrill Lynchentity received
$45
billion
in
taxpayer
funds aswell
as
$188
milUion
in
taxpayer-fundedinsurance.Despite
this
massive infusion
of
taxpayer money, Merrill Lynch
paid
out bonuses totalingapproximately $3.6 billion
and
Bank of America distributed a pool
of
more
than $3.3
billion.

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