New York Attorney General Andrew Cuomo on Wednesday accused
of "misleading" Congress about the timing of bonus decisions and asked a judge to deny
Bank of America's
request to keep bonus information under wraps.
The court filing is an intensification of Cuomo's quest to ascertain when Merrill made decisions about the payouts, which executives were responsible for approving them and which employees were rewarded. Merrill distributed $3.6 billion in bonuses at the end of 2008, right before BofA closed the deal on Jan. 1.
In the court filing on Wednesday, Cuomo lays blame at the feet of both institutions, saying that, "
despite its representations to the contrary, Bank of America clearly could have influenced, if not controlled, the timing of Merrill's bonuses." In addition to the bonus accusations, Cuomo implies that Merrill booked losses "quickly and quietly" after the deal was announced, without providing all the information to its new owner.
Cuomo also included a letter with the court filing showing that a Merrill lawyer told Rep. Henry Waxman (D., Calif.) on Nov. 24 that compensation decisions had not been made yet. However, the board's compensation committee had voted almost two weeks earlier to hasten the schedule so that payouts could be made in December instead of January.
The timing of decisions is important because Merrill answered queries from Cuomo and legislators last fall by saying it had not made compensation decisions yet. The ultimate findings of Cuomo's investigation may set the stage for lawsuits or charges against those who were responsible for what he has called "a surprising fit of corporate irresponsibility."
The payouts seem to have been decided as Merrill prepared to report a quarterly loss of over $15 billion. Bank of America has received $45 billion in government loans and $118 billion in guarantees against Merrill's toxic assets to support its acquisition.
BofA says it had no authority over Merrill bonuses before the deal closed and has resisted Cuomo's attempts to obtain more information without a pledge that details would not be made public. Cuomo has refused those terms and on Tuesday asked
to disclose its own bonus information as well.
Former Merrill CEO John Thain testified about the bonuses last month, though a temporary order was put into place to keep that information confidential. A judge will decide on Friday whether that order should be permanent.
BofA's CEO Ken Lewis testified two weeks ago, but did not reveal information about individual bonuses. During that testimony, Cuomo's office subpoenaed Lewis a second time in hopes of eventually getting the information.
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