Excerpted letter from Rep Kucinich to Ben Bernake:
Kucinich: Did U.S. know more than Bank of America shareholders? $3.6 billion in Unusual Bonuses to Top Merrill Lynch Executives Weeks before Federal Cash Infusion
Washington D.C. (March 30, 2009) – In letters to Federal officials involved in the merger of Merrill Lynch and Bank of America, Congressman Dennis J. Kucinich, Chairman of the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee, requested documents about their knowledge of $3.62 billion in bonuses Merrill Lynch paid top executives at the company just weeks before $25 billion in Federal aid was given to Bank of America for the merger.
The Merrill bonuses were 22 times the size of the bonuses AIG awarded. They also constituted a significant share (36.2%) of TARP funds allocated to Merrill. Furthermore, they were not locked in by preexisting contract and were performance bonuses, as opposed to retention bonuses. Also unusual, the Merrill Lynch Compensation Committee awarded these payments on December 8, 2008, before the end of the fourth quarter, in which Merrill lost more than $15 billion, and after Merrill was informed that it would be allocated $10 billion in TARP funds.
These payments raise significant questions about what information Merrill Lynch and Bank of America executives shared with federal officials that oversaw the Merrill acquisition by Bank of America. Ordinary shareholders were unaware of the details of the bonus payments, but the U.S. government held 800,000 shares in preferred stock and warrants at the time and federal officials regularly met with both Bank of America and Merrill Lynch executives.
Congressman Kucinich sent a similar letters to Mr. Ken Lewis, CEO of Bank of America, Mr. Ben Bernanke, Chairman of the Federal Reserve, and Mr. Neel Kashkari, Interim Assistant Director of Financial Stability. In the letter, Kucinich requests all documents and communications between employees of Bank of America and Treasury and/or the Federal Reserve, and Merrill Lynch and Treasury and/or the Federal Reserve, related in any way to Merrill’s compensation packages, bonuses, and/or Bank of America’s receipt of TARP monies. LINK – afterdowningstreet.org