Hearing Of The Subcommittee On Domestic Policy Of The House Committee On Oversight And Government Reform - "Bank Of America And Merrill Lynch: How Did A Private Deal Turn Into A Federal Bailout? Part IV"

Statement

Thank you Chairman Towns, Chairman Kucinich, and Ranking Member Issa for working together to hold this ongoing series of important hearings on the merger of Bank of America and Merrill Lynch. Today's hearing is the fourth in a series, which has revealed troubling insights into the negotiations that resulted in a private acquisition becoming a federal bailout.

After hearing testimony from Bank of America CEO Kenneth Lewis, Federal Reserve Chairman Ben Bernanke, and former Treasury Secretary Hank Paulson questions still remain as to the role the government played in the negotiations, the adequacy of Bank of America's due diligence process, and the motivations behind B of A's attempt to claim a "material adverse change" (MAC) and terminate the merger.

E-mails and notes recently disclosed by Bank of America have revealed startling insights into the final negotiations with federal officials. 15 days after the merger was finalized Bank of America announced for the first time that they would be receiving an additional $20 billion in TARP funds, and I am concerned that Bank of America viewed the MAC less as a viable option to end an unwise business deal, than as a bargaining chip with which to procure more taxpayer dollars.

With the unemployment rate at 10.2% nationally, and at least 12.7% in my district in Los Angeles it is crucial that the decisions that turned a private business transaction into a public bailout are thoroughly scrutinized.

Thank you Mr. Chairman, I would like to thank today's witnesses for their testimony, and I yield back my time.

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