Hank Paulson Threatened Bank Of America CEO into Accepting TARP

The facts behind the story are emerging in frightening detail. This is how a socialist government implements control.

The cavalier use of brute government force has become routine, but the emerging story of how Hank Paulson and Ben Bernanke forced CEO Ken Lewis to blow up Bank of America is still shocking. It’s a case study in the ways that panicky regulators have so often botched the bailout and made the financial crisis worse.

……Mr. Lewis has told investigators for New York Attorney General Andrew Cuomo that in December Mr. Paulson threatened him not to cancel a deal to buy Merrill Lynch. BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger. But Washington decided that America’s financial system couldn’t withstand a Merrill failure, and that BofA had to risk its own solvency to save it. So then-Treasury Secretary Paulson, who says he was acting at the direction of Federal Reserve Chairman Bernanke, told Mr. Lewis that the feds would fire him and his board if they didn’t complete the deal.

Mr. Paulson told Mr. Lewis that the government would provide cash from the Troubled Asset Relief Program (TARP) to help BofA swallow Merrill. But since the government didn’t want to reveal this new federal investment until after the merger closed, Messrs. Paulson and Bernanke rejected Mr. Lewis’s request to get their commitment in writing.

“We do not want a disclosable event,” Mr. Lewis says Mr. Paulson told him. “We do not want a public disclosure.” Imagine what would happen to a CEO who said that.

http://online.wsj.com/article/SB124078909572557575.html

Obama’s regime is forcing trillions of taxpayer’s dollars at corporate failures to give a false sense of security. It’s not working. You cannot prop up hundreds of collapsing businesses without the economy taking a serious hit. It’s not just the failures the government interferes with, it’s the successful businesses as well. The FDIC recently pressured a community bank in Boston—East Bridgewater Savings—for not lending enough to high risk borrowers, and making a profit, to boot. East Bridgewater Savings ended 2008 with $135 million in assets and deposits of $84 million; on average, one of the more successful banks in the U.S.

This jack-booted method of taking control of the nation’s economic infrastructure is pure socialism, and will lead to a catastophic depression.

How’s that ‘change’ working for you?

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