Lewis had his doubts about the transaction, but Paulson convinced him it was not in the CEO’s “best interest” to walk away, according to the testimony given in February as part of New York attorney general Andrew Cuomo’s investigation into the merger and bonuses paid to Merrill execs.

But the investigation raises questions about more than just the bonuses; questions so serious, according to Cuomo, that senior Congress members need to be made aware of them.

Here then, is Cuomo’s full letter, sent to the heads of the Senate Banking Committee, the SEC, the House Financial Services Committee and the Congressional Oversight Panel, with selected highlights from us.

Dear Chairpersons Dodd, Frank, Schapiro and Warren:

I am writing regarding our investigation of the events surrounding Bank of America’s merger with Merrill Lynch late last year. Because you are the overseers and regulators of the Troubled Asset Relief Program ”TARP”, the banking industry, and the Treasury Department, we are informing you of certain results of our investigation. As you will see, while the investigation initially focused on huge fourth quarter bonus payouts, we have uncovered facts that raise questions about the transparency of the TARP program, as well as about corporate governance and disclosure practices at Bank of America. Because some matters relating to our investigation involve federal agencies and high-ranking federal officials charged with managing the TARP program, we believe it is important to inform the relevant federal bodies of our current findings. We have attached relevant documents to this letter for your review.

via FT Alphaville .

zyakaira notes: Hank Paulson may have done it based on the nation’s best interest per the progam and scenario he had in place. However I also do not subscribe to any such illusions in the market that there were other scenarios to choose from

Was BofA asked to play along because the other guys did not want to be singled out as the bad guys. If so then how come Goldman Sachs survived.

If Goldman Sachs’ survived then how is it that all their traders are moving to Deutsche Bank. If it is the European Banks then, how come the hole in Europe is larger and without recourse. Unfortunately, we are too far away from the action and testimonies are usually able to hide any factual revelations in either the testimony or in the questioning. Reasonable doubt has to be.

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