March 12, 2009

Cuomo Catches Merrill Lynch Lying in Bonusgate Probe

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What has Andrew Cuomo done to deserve this disrespect from Bank of America and Merrill Lynch?

As we’ve previously noted, Cuomo, New York’s attorney general, is on the warpath against Bank of America, which swallowed up Merrill Lynch late last year with the help of billions of taxpayer dollars. Cuomo is peeved that Merrill Lynch doled out $3.6 billion in early bonuses even though it knew it was about to lose $15.31 billion in the fourth quarter of 2008. And now Cuomo seems to have caught Merrill’s lawyers in a lie. The Wall Street Journal reports:

In a Nov. 24 letter, a lawyer for Merrill Lynch & Co. assured the head of a House committee that “incentive compensation decisions for 2008 have not yet been made,” … But the firm’s compensation committee actually voted two weeks earlier to pay bonuses to Merrill employees in December, according to testimony from a Merrill director.

That sure looks like someone’s lying. And that’s not all. Depositions Cuomo filed with the New York Supreme Court yesterday indicate that, as Cuomo suspected, Merrill didn’t even think about reducing its bonus pool when it became apparent that it was going to suffer a steep loss. If Cuomo can continue to paint Merrill and Bank of America as irresponsible, lying scumbags, he’ll probably eventually get what he’s really after: the names of the employees that the two financial giants made into millionaires last year. The PR cost to B of A from his continued investigation will eventually become greater than the PR cost of releasing the names. But so far, B of A is still holding out on him.

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That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

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