Accountability Series: The Banker of the Year 2008 on Capitol Hill

Today I was watching testimony of Ken Lewis - Bank of America President, CEO and former Chairman of the board - before the House Oversight and Government Reform Committee regarding the bank's purchase of Merrill Lynch in 2008.

(But first - a quick disclaimer. I am a former employee of Bank of America and I still have some unfinished business with the company in a form of Sarbanes-Oxley complaint against the company. For those who don't know, Sarbanes-Oxley Act of 2002 protects employees of public companies who disclose fraud and securities violations against management retaliation.)

So, here he was - the Master of the Universe, Banker of the Year, the Captain of the Industry sitting sweating and red-faces in front of congressmen and cameras and lying through his teeth, "not remembering" events that happened just a few month back, but knowing full well that nothing - NOTHING - will come out of these meetings.

Again and again he was told by various congressmen that they don't believe his story, that he better tell them the truth, and so on. Yet, he knew that they cannot and will not do anything to him. So he stuck to his story.

Some questioning was somewhat tough. Rep. Dennis J. Kucinich asked some really pointed questions. His point was that it was not Fed and Treasury that were pressuring BofA to buy Merrill Lynch, but it was BofA pressuring Fed to get more TARP money. Although it is possible, I am not sure that the bank was in the position to do so.

The question I was looking for was asked by Rep. Darrell Issa. It was reported that Lewis told New York Attorney Andrew Cuomo that then Treasury Secretary Hank Paulson threatened to fire Lewis and BofA board of directors if they don't buy Merrill. This was discussed during the hearing also. What was not clear was HOW could Treasury Secretary actually do so and why Lewis thought that they could? So, when Issa asked Lewis why he thought it was possible, Lewis mumbled something about him being under impression that Fed could do it and neither Issa, nor anybody else, follow up with an obvious questions - like, could not you talk to an attorney to find out for sure?

The bottom line - there was a biggest robbery in the US history. Managers of companies like Merrill Lynch, Bank of America, Lehman, Bear Sterns, etc. got away with millions of shareholders' and, later, taxpayers' money while running their companies to the ground.

Not even a year after these events, there was a clear effort on the part of many congressmen to let Mr. Lewis to get off easy. And why blame congressmen? Even BofA's shareholders stripped Lewis of only one of his titles - he is still running the show at the bank.

Which brings me to the conclusion - this country has not learned the lesson. The same people who robbed us before, will rob us again.