Is Ken Lewis the government's fall guy?

Posted by Zack Smith - email

CHARLOTTE, NC (WBTV) - The plot thickens in the Bank of America / Merrill Lynch saga.

B of A's recently released secret files make the merger look less like a shady, backroom business deal and more like a cover-up that everybody was in on.  And by everybody, that means all the way up to the White House.

The bank's shotgun wedding to Merrill Lynch has been a point of contention all year, and a symbol of the economic collapse.  There have been questions about whether the feds pressured Ken Lewis and company into gobbling up Merrill.

Now we can tell you, thanks to those secret files just obtained by the Washington Post, top Obama Administration officials signed off on the merger.  They offered to protect Bank of America from financial ruin if B of A promised to go through with the deal.   All this even before President Obama took office.

But it wasn't just the Obama administration in on all this.

Rewind back to June -- Ken Lewis on Capitol Hill.  He testified before Congress that the Bush Administration threatened to force him out as CEO if he didn't go through with the Merrill Lynch deal.  At the time Lewis said, under oath: "If we went through with calling them back that the government could or would remove management and the board."

These new documents continue to fuel speculation that Lewis was forced into an early retirement.  He'll step down at the end of the year and he's not saying why.

More top B of A officials will soon have a chance to explain who knew what and when they knew it.   Two bank board members, Chad Gifford and Thomas May, about to testify before Congress.  Incidentally, these are the two guys who traded the infamous "screw the shareholders" emails, two weeks after the merger.  They are scheduled to testify before a House Congressional Panel this Thursday.