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Edolphus Towns Is Latest Shark In Ken Lewis Chum-Filled Pool
There is blood in the water... that of Ken Lewis, and the sharks are all over it. The latest to join the dismemberment party of one Bank Of America Chief Executive Officer, is New York Representative, and Chairman of the Committee on Oversight and Government Reform, Edolphus Towns. And while the traditional defense provided by Lewis, BofA, and respective lawyers, has been one which delegates any wrongdoing to the attorney-client privilege gray area, Towns has told the bank it "cannot use attorney-client privilege when dealing with Congress." The last piece of armor that Lewis had has just been torn off. From a strategic point of view, the question now becomes whether Ken Lewis, soon to be faced with the traditional prisoner's dilemma, will out his "dealer" Hank Paulson, in exchange for a slap on the wrist, as the alternative could be a much more gruesome fate easily involving an 8x10 cell.
From the New York Times:
In a sternly worded letter on Friday, Mr. Towns, a New York Democrat, said the bank must divulge when it became aware of the enormous losses at Merrill last year, when it received a commitment from the federal government for a second round of bailout money and what legal advice its management received about whether it had to disclose those developments to the bank’s shareholders.
Mr. Towns gave the bank until noon on Monday to provide answers and relevant legal documents. He said it seemed that the bank was “hiding information.” The bank replied to Mr. Towns’s committee late on Saturday, asking him to delay that request until after Tuesday, when Mr. Towns meets with Anne Finucane, the bank’s chief strategy and marketing officer, who oversees public policy at the bank. But a spokesman for Mr. Towns said on Sunday that he was sticking to the deadline.
At this point Lewis is done. Whether it is the judicial track spearheaded by Rakoff, the criminal one where Andrew Cuomo shows no signs of relenting, or the Congressional, now that Towns has joined the fray, the CEO is over. The question is will he go down quietly, and be the sacrificial lamb for a confluence of many different interests, or will his fall be one of flames not only for the former Treasury Secretary but also for the current Chairman of the Fed, both of whom have been indirectly implicated in a massive conspiracy to defraud BofA shareholders in exchange for the "greater good" (and Ken Lewis' job). Maybe the BAC CEO has had enough and is about to squeal. If so, this has been the best coordinated attack against the old guard ever witnessed, which by focusing on the weakest link could easily reach to the very top of the Wall Street oligarchy. David Skeel, a Penn law professor, is dead right in his description of the situation that a witless Lewis has been thrown in, courtesy of Hank Paulson:
"What makes it complicated is it’s not just two parties, it’s not just three parties, it’s six or seven parties. It’s like a multiplayer chess game where each party is making different moves from a different strategic position and each party has a huge amount at stake."
Furthermore, the lines of inquiry have expanded. At some point even Lewis will forget just what it is he is purposefully "not recalling" at any given occasion:
There is also a maze of issues underlying the investigations. While the S.E.C. case focused only on the bonuses paid out at Merrill before the merger, Mr. Towns and Mr. Cuomo are looking at surprise losses at Merrill as well as Bank of America’s suggestion that it considered backing out of the deal last year as a result of the losses. Mr. Towns instructed the bank to tell its current and former employees that they should not assert attorney-client privilege when they are interviewed by his committee.
As to whether Towns really has jurisdiction to revoke the Attorney-Client shield behind which all guilty parties in this affair are now hiding:
While Bank of America acknowledged that Congress had the authority to disregard attorney-client privilege, the bank’s Washington law firm, WilmerHale, argued that that would set a bad precedent and referred Mr. Towns’s staff to the Attorney-Client Privilege Protection Act, which passed in the House but never became law.
Would a massive alleged shareholder fraud orchestrated by the bank's executive committee and possibly its board of directors not have a worse precedent? We leave that one to the much less conflicted law firms than WilmerHale, someone like Wachtell Lipton for example.
(Zero Hedge is trying to obtain the actual letter sent by Rep. Towns. If any readers have encountered it, please bring it to our attention).
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Just put John Thain in The CEO seat already, GS needs to run Citibank.
Here's a link to the letter...
http://oversight.house.gov/story.asp?ID=2582
imagine ken lewis in an orange jumpsuit....
lewis is a sacrificial lamb and possibly weak link....the real criminals are paulson but even more so the foul tempered potty mouthed ben bernanke - crook of the century to alan greenspan's quack of the century....
and yet above this layer are others yet not named the likes of whom are david and jay rockefeller, the bush crime syndicate, and an assorted selection of wall street executives doing their best impressions of financial terrorists....
i loved the line about no extensions and no executive privilege....i mean client attorney privilege....
but it is all hot air at this point...the proof is in the pudding...i only hope that lewis is a weak link and that he sqeals (like the pig that he is)....
Lewis already sunk his ship with his "I didn't perceive it as a threat" testimony, poor guy probably thought he was taking one for the team not knowing he wasn't on the team. Hanky Panky and Kamikaze Ben are probably having a few chuckles.
that line was only excelled by ben's "i don't
recall" which he invoked dozens of times during
congressional "testimony"....
so we have a man leading the federal reserve
who can't recall events or conversations just
6 months prior....and yet kenyan rockefeller
sock puppet re-appointed him to another term
with an advanced case of alzheimers....great
judgment barry..
www.RevokeTheFed.comMarch 2008
WHEREAS, Article I, Section 8 of the Constitution of the United States of America authorizes Congress "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures";
WHEREAS, on December 13th, 1913 the US Congress enacted the Federal Reserve System;
WHEREAS, the Federal Reserve System is considered an independent agency within the federal government, with oversight of Congress and containing appointed public officials on its board of directors;
WHEREAS, the Federal Reserve System Controls the Federal Reserve Note, the official currency of the great nation of the United States of America;
WHEREAS, there may be controversies regarding the legality and constitutionality of the Federal Reserve System, it is recognized that the said system has operated continuously as the central banking system of the United States since the inception of the Federal Reserve Act of 1913;
WHEREAS, the Constitution of the United States of America granted Congress the authority to create the current Federal Reserve System, it also does grant Congress the authority to modify or revoke the Federal Reserve System;
WHEREAS, the actions of the Fedreral Reserve System represent the credit and currency of the United Stated of America to the citizens of this great nation and to the world;
WHEREAS, the Federal Reserve System, acting independently within the federal government allowed, supported, and even promoted parasitical and non-productive uses of the money and credit of the United States of America;
WHEREAS, the United States and likely the entire world's financial system is undergoing massive de-leveraging of the said parasitical and non-productive uses of the credit and money of the United States of America (as well as other nations' currencies);
WHEREAS, the US dollar, the "Federal Reserve Note" is declining in value due to these parasitical activites, as well as potentially other causes;
WHEREAS, it is recognized that the citizens of the United States and other nations did willingly participate at some level in the creation and propogation of said parasitical activities;
WHEREAS, it is also recognized that the United States of America, a sovereign nation, has the legal, moral, and God given authority to take actions to benefit its citizens and to protect its good name, credit and money in times of difficulty;
WHEREAS, it is recognized that the current time is such a time of great difficulty;
WHEREAS, it is recognized the parasitical financial institutions and their activities are at odds with citizens of the United States of America and the good credit and money thereof;
WHEREAS, the current indications are that the Federal Reserve System is acting to preserve the financial system currently flooded with the parasitical activities;
WHEREAS, the current indications are that the neither the Federal Reserve System, nor the Congress of the United States, nor the people of the United States have access to the books of the institutions being preserved by the Federal Reserve, and therefor the degree of inter-connectivity and risk associated with the institutions and other entities cannot be determined;
WHEREAS, the Federal Reserve System is accepting non-performing assets as collateral for credit with ultimate taxpayer responibility to entities not under its legislative mandate;
IT MUST BE CONCLUDED, that the Federal Reserve System is not acting to the benefit of the people of the United States of America, its credit, money, and good name;
WHEREAS, it is recognized that the political will and capability of the government of the United States of America may not be up to the task of prosecuting this proclamation ; It is also recognized that this may be the only hope for the continued survival of the United States of America as the great nation as it has historically existed.
NOW THEREFORE, it is PROCLAIMED by those supporting this Proclamation that the Congress of the United States of America FULLY NATIONALIZE the Federal Reserve System, and take full control of the credit and money of our great nation; The Congress must take whatever action necessary to seperate out, sequester, disown, or otherwise neutralize the effect of the parasitical financial activities which led to the current crisis; The Congress of the United States of America must reorganize, replace, or terminate the Federal Reserve System as appropriate; or otherwise devise a system for creation of the national currency.
IT IS FURTHER PROCLAIMED, that the Congress of the United States of America in cooperation with the Executive of the United States of America contact allied nations and any other nation willing to participate in the overhaul of the failing and parastical financial sytem currently in operation and create new treaties and alliances as necessary to create a sane and productive system of finance with the express goal of supporting a productive national, and by extension and through voluntary cooperation, world economy;
FURTHERMORE, it is PROCLAIMED that it should be the goal of such an international effort to maintain fair international trading practices allowing for protection in national interest of labor, resources, and productive capabilities;
WHEREAS, it is recognized that such a move on the part of the United States of America may result in the necessity of an isolationist policy IF the other developed nations do not follow our lead; If such occurs, so be it.
SO HELP US GOD!
So BAC is paying a WilmerHale partner $900 per hour to give legal advice based on a PROPOSED law that the legislative branch never voted in to law?
If that's the best he come come up with, I would expect Kenny boy to plead the fif.
Pointing to a proposed law that was passed by the house is political code for saying we have some political support, just look at who voted for the bill in the house.
However, does the term "grasping at straws" ring a bell?
While this poor guy apologizes for robbing a Bank of America branch to pay his mortgage and buy medicine for his 73 year old wife, the Bankstas pay themselves multi-million $ bonuses, courtesy of the U.S. taxpayer.
http://latimesblogs.latimes.com/lanow/2009/09/elderly-bank-robber-in-san-diego-says-mortgage-drove-him-to-crime.html
what a great way to go to bed. there is hope.
let's get the truth out.
I couldn't agree more...Start with the moron and let his fear of Bubba open up Pandora's Box.
I really hope that this would bring down all party involved (ie Bermonkey, Paulson)... But in the end, I really doubt it... They will be protect by "someone" or "someone" will put a stop to all this... POS...
Roland Arnall got to be ambassador to the Netherlands. Angelo Mozilo is still floating around on his yacht. Hank Paulson still has his tax free $700M and GW Bush still has his 90k acres in paraguay. Ben Bernanke is still hiding the salami, the Oman is still frying the skin off of children. Yeah, Ken Lewis is the culprit, I wonder which CONgreffcritter lost money in BAC stock? :rolls eyes:
It's all a jigsaw. Every piece counts.
To say this is a multi-layered chess game with different & competing players and interests is the understatement of the week. Wheels within wheels.
Too Many Secrets are now at potential of creating a cascading effect of disintegrating window dressing.
Thanks TD.
Well, it looks like Cuomo's price has been met. Obama wants one of only 2 blach governors to step
down so Cuomo may ascend. It was an even bet whether or not he was serious about pursuing
his targets. It seems we have our answer on which way he's breaking. It will take a large rug to
sweep the B of A stuff under. And what of the judge?
BofA and the attendent swirls are simply symptoms or indicators of the larger issues at hand. You are quite correct that we have arrived at the point where either there is not a rug big enough or there is insufficient space created by the rug. Regardless, the quantum universe is exerting itself in the actions of the judge and others. Just as a two year olds temper tantrum in a supermarket check out runs out of steam when its attention is diverted by new events, so will the corrupted powers that be attention be diverted by newer and more attention grabbing events as they unfold. However, the preceding events will be left hanging and unresolved as the condition of overwhelmed panic is more fully achieved.
Facts of life.
I would not bet on it, Layne. The Fat Cats will allow drama, but not defeat. The stakes are too high for that. Those who become a real threat, will be no more. That, I should think, is the lesson from Lincoln and JFK, and others.
oh my god....there is one more person on the planet
who understands the death of jfk.....
and well said about drama vs defeat....the
newsfakers in the cia controlled press will provide
plenty of the former....
Since the topic is banks don't forget Louis T. McFadden. My bet is that KL takes the hit and gets comped by a family promotion into the club. The payoff will be delivered to his progeny long after the dust has settled.
The progeny may get a title, but never will they really belong. After all, real membership is defined by actions taken once membership is attained and as far as title holders are concerned, holding title is the be all and end all.
Facts of life
The simple fact of the matter is that there is an ever increased portion of those encompassed by events that are aware. The situations that are developing can no longer be so easily controlled. Although the news media is simply one more survivor series in practice, it has also been compromised in the minds of the aforementioned target audience of the aware. a target audience that is growing by the very minute.
The "fat cats" appreciate this fact quite well, but are left with only the old tools in their tool bags to deal with these new developments. After all, it would be difficult for them to kill everyone since to do so would eliminate their source of power. The basis of the current structure rested upon the willful compliance of those encompassed by the system in return for sustainable increases in living standards and security of the person & society. This quid pro quo has been destroyed by the actions of the so called fat cats themselves. Advantage, opposition of the current structure of compromised systems and structures.
ware imminent OD of aspirin...
http://www.nytimes.com/2009/09/21/opinion/21krugman.html?_r=1
"I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”
That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that."
nope, he is an idiotus
i would liken him more to a sock puppet...
with this one remark he has shown himself
sucking bankster cock....and put to lie all
of the claptrap he peddled during his campaign...
i was astonished that so many people believed
his crooked lies were it not for the instructive
examples of mein kampf and hermann goerring.
in some ways though the comment is not entirely
misplaced....arbitrarily capping pay is wrong....
the real solution is taxing capital gains
and rentier activities at a more appropriate
rate which removes the incentives to pay
banksters so extraordinarily...in other words
the fire sector overshadows the productive
sector in an extradordinarily unhealthy way....
If Ken Lewis wasn't the village idiot, he would have been secretly recording every converstaion with Paulson.
if ken ends up in prison, i hope his cellmate is madoff.
that would be too funny =)
Kenny:
Take da fifth before Congress or develop a faulty memory.
Start measuring yourself for a 42L orange jumpsuit, and get ready to spend a lot of quality time with some guys named Bubba and Jojo.
Don't worry - Bermonkey and HankPo will shortly be joining you.
http://www.youtube.com/watch?v=Cbxh3-ML2ls&feature=related
Now THAT was hilarious!
God I hope he fights this tooth and nail. If he does, this could (and should) get equally dicey for Hanky and Berspanky
Someone is selling, selling, selling in Italy
Tyler, Your conclusion that "the CEO is done" is a bit over-wrought. Anyone can be compelled to appear before Congress...and anyone can invoke the 5th Amendment, and refuse to testify. Since the 5th applies prospectively and to "any criminal case" (including state cases), Congress can't grant immunity to circumvent that right, either.
Ken Lewis will just quietly turn up "dead" and buy a house next to Ken Lay in Barbados or somewheres.
Reggie Middleton has a few more details and copies of teh letters I think.
http://boombustblog.com/Reggie-Middleton/1146-Those-Giuys-from-Brooklyn-...
Excuse me, but does anyone here really think this will lead to meaningful disclosure? These guys call the tune. If they sacrifice Lewis it will only be for a much larger win.
no but it is fun to fantasize....
it's drama for the sheople....
JWalker: invoking the Fifth is but the first step in a rapidly closing net. If Lewis invokes the 5th, we are looking at an immunity deal in exchange for testimony on the other participants in the securities fraud conspiracy. Again: the prosecution's theory is very simple, and the easy part is the crime: there was an intentional and deliberate intent to defraud by the omission of both of both the Merrill bonuses and the massive losses in the BofA proxy solicitation. If the losses and bonuses had been disclosed, the shareholders would not have approved the deal. Now that we have the crime, who committed it? Those who signed the registration statement, and those who had knowledge of it, aided it, encouraged it, demanded it, threatened if it did not appear, etc. etc. and employed any insturmentality of interstate commerce (wire, telphone, email etc.) to accomplish it. Remember that phone call bertween Paulson and Ken?
Standard of proof to prove the crimes is high, and Ken's testimony, which suffers from the infirmity of being contrary to his prior, sworn testimony, is absolutely necessary.
but congress does not have jurisdiction over
such matters except as a matter of inquiry....
if there is no judicial follow-up then this
goes no where...the anemic interest if not downright
cover-up by the sec suggests that there is
very limited appetite for follow through by
the executive....
the only hope is some pissed off boa shareholders
but do they care enough?
in fact the very making of a spectacle in congress
rather than in the courts is almost a cover-up
in itself...
NedZeppelin: Two comments:
(1) Please distinguish between federal and state charges, since the 5th applies to /both/, and please note that the topic is a Congressional inquiry.
Thus, Lewis can take the 5th on the grounds that his testimony would be self-incrimination on the federal or state level.
Net: congressman Towns can go jump off a bridge, he has no leverage over Lewis. (Fastow from Enron is an example; Congress could not compel his testimony.)
However, if you believe a blanket (fed+state) immunity could be granted by /Congress/, then /please/ cite statute, reg or case law. (That is /not/ an argument or challenge; I'd like to learn!)
(2) Back to Tyler's post being over-wrought: if Lewis does receive a blanket immunity (fed+state), then perhaps he is not "done" as Tyler wrote, but "free as a bird"?
JWalker:
Given prosecutorial discretion, you can make a deal however you need to in order to get the job done... When Congressman X says, "guess what's going to happen to your funding if you don't play along," things get fixed in a hurry at the state level.
Rosie is going to be in Bloomberg in minutes.
PS.: the request of some zerohedge commenter was satisfied and deidre is wearing glasses today. She even has a little less of a robotic look today.
I think the pussball will squeal and I hope that it's loud enough to take down Paulson.
http://oversight.house.gov/documents/20090910162107.pdf
Towns just needs to look good for his next election. Populist politics. As long as he looks good he doesnt need results.
Ken L must be feeling alot like Butch Cassidy (famed bank robber!) these days --he's been tracked and feds are gunning for him. He's met more sharks with bigger teeth.
Sheriff Ray Bledsoe: [to Butch and Sundance] "You should have let yourself get killed a long time ago when you had the chance. See, you may be the biggest thing that ever hit this area, but you're still two-bit outlaws. I never met a soul more affable than you, Butch, or faster than the Kid, but you're still nothing but two-bit outlaws on the dodge. It's over, don't you get that? Your times is over and you're gonna die bloody, and all you can do is choose where."
Let's start with Sheila Bair next - for the theft of Washington Mutual.
More GS games - ZH did an article about GS and their conviction buy rating list and then later they are the underwriters of a 2ndary/offering.
Here we go again:
21-Sep-09 06:14 ET In Play Spirit AeroSystems announces $300 mln senior notes offering due 2017 (18.34 )
17-Sep-09 07:35 ET In Play Spirit Aerosystems raised to Conviction Buy from Buy by Goldman Sachs - DJ (16.85 ) :
It is easy to jump on the populist bandwagon and pummel Ken Lewis. Pause first. The public knows few of the facts of this deal, and the "extreme pressure" that was placed on the bank and board to consummate this deal (on December 5th). Look for the hand behind the curtain pulling the puppet's strings (namely: Paulsen and Bernanke). The only question that remains in our mind is, will Lewis really be forced to "out" Bernanke and Paulsen -- both of who were directly and intimately involved in dictating the terms of this deal (including disclosures). ZH has discussed at great length the government's direct hand, and manipulation, in our markets today. Does anyone realistically believe the U.S. Government stood passively by last November on the BAC/Merrill deal. Answer: NO. There is a lot more to this story...
John Thain is out doing reputation repair, calling KL a liar. So, I guess we know what card is going to be played by hanky panky and bendover benny.
Thain angling for something??
What's not to like ? The thieves turning on each other......the only way to get to them !!
Here are the back and forths between Towns and BAC... via Deal Book
http://dealbook.blogs.nytimes.com/2009/09/21/bank-of-americas-back-and-f...
Look this whole deal goes way beyond anything in the public spectre and way back in time. We've always heard follow the money. Well it's certainly never been more relevant than the shotgun ML/BAC union. It's well documented ML was going the way of Bear & Lehman had the BAC arranged marriage not taken place. There are some very very old names on the largest ML shareholders roster, particularly those same names one would find in the original articles of incorporation to the New York Fed. For you see this arrangement has more to do with bloodlines and heirarchies than finance. Do you think it was a coincidence Lewis was at Blankfein's home in Vail when Thain (former Goldman MD) reached out. No one in the money hierarchy was going to let MER go down the way of Bear and Lehman. MER's bloodlines run too deep into the kingdom. Further, don't discount the fact that BAC has managed to merge its way into its own significance at the annual Fed shareholders retreat hosted by the Rothschild/Rockefeller electronic digital credits cabal. Lewis knew damn good and well it would be the legacy BAC shareholder who would take the hit whether at $50 billion or $19. Either way, legacy BAC didn't/doesn't share the same bloodlines as legacy MER. But what he was told behind the scences was that once the transaction was complete those same monied bloodlines would tary off and get out of the way allowing good ole' Kenny to gut the pig to the core and remove management in any manner he saw fit. Which is exactly what happened. The old money is gone. Kenny knowingly gutted his own shareholders with pre-meditation(and admitted as much in Congressional testimony) and knowingly gutted the legacy MER management so he and Anne could swallow its carcass whole into the BofA dynasty. Charlie Merrill would have blood gushing out of his eyes to watch how Ken Lewis personally destroyed in one quarter what it took him a lifetime to achieve. The ML-BAC brands are permanently and irrevocably damaged.
Just shut the fcuk up and type the damn subpoena.
http://dealbook.blogs.nytimes.com/2009/09/21/bank-of-america-misses-congressional-deadline/?hpw
second that!