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UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See prorev.com for full contents of our site

February 7, 2010

BANK OF AMERICA CEO TRIAL COULD BRING PAULSON AND BERNANKE INTO COURT

Charlie Gasparino, Daily Beast - In defending former Bank of America CEO Ken Lewis against charges that he misled investors, his lawyers will call as witnesses former Treasury Secretary Hank Paulson and the current Federal Reserve Chairman Ben Bernanke, according to people close to the matter. The defense team, led by former U.S. Attorney Mary Jo White, hopes to get Paulson and Bernanke to reveal that Lewis did not mislead the government about BofA's deteriorating financial condition in the aftermath of its Merrill Lynch deal. Those losses prompted a massive government bailout.

White's first order of business is to get the civil case dismissed, according to several sources. But if she's unsuccessful, she plans a vigorous defense, including calling high-level government officials to testify. "If this thing goes to trial you can expect both Paulson and Bernanke to be on the witness list," said one person close to the defense team, "and right now Lewis doesn't want to settle."

"It is unclear if either Bernanke or Paulson have already given testimony to the state attorney general in preparation for bringing today's case, which includes civil fraud charges against former Bank of America CFO Joe Price. (A spokesman for Cuomo's office did not return a call for comment; a spokesman for Bernanke had no comment and a spokeswoman for Paulson didn't return an email request for comment. And a spokesman for Lewis declined to comment on the matter.) So far, both men have given testimony before Congressional committees on the controversial merger. Paulson addresses the matter in On the Brink, his new book about his role in the financial meltdown of late 2008.

In a statement, White said that Lewis is being "publicly vilified by the political search for accountability for the financial meltdown."


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