Timothy Mayopoulos was fired as general counsel by Bank of America (NYSE: BAC) in December 2008, but his insight did not end there. Mayopoulos is scheduled to testify before Congress for the first time on Tuesday as a House oversight panel examines the $45 billion federal bailout of the second-largest U.S. bank and its shotgun acquisition of Merrill last year at the height of the financial crisis.
Mayopoulos offered details regarding his firing on December 10 of 2008, saying that the firm’s chief risk officer told him that Lewis had made the decision “quickly and recently.” He was told to “leave the premises immediately,” and a HR rep then gave him his severance papers and took his corporate ID, company credit card, BlackBerry and office keys, he says.
The deposed top attorney of Bank of America Corp. says he played no role in drafting the bank’s agreement to allow Merrill Lynch to pay billions of dollars in bonuses to its employees, nor in decisions on whether to disclose the bonuses to shareholders. Congress has begun to dig deeper on the firms holding TARP funds, as a House oversight panel is examining the $45 billion bailout given to the firm last year, amidst its shotgun acquisition of Merrill Lynch during the financial crisis.
The House Oversight and Government Reform Committee has been investigating the government’s role in pushing the hastily arranged takeover of Merrill, the tumultuous events surrounding the deal and the payment of the bonuses to Merrill employees. Accusations have assailed Bank of America trying to get out of the deal after examining the books, only to allegedly be told by the Treasury Chairman and Federal Reserve President that it was not an option. Mayopoulos says in his testimony he advised Bank of America executives that the bank couldn’t make a case that Merrill’s huge losses provided legal grounds for it to back out of the merger deal.”I concluded that there was no basis to conclude that a material adverse change had occurred with regard to Merrill Lynch” that would justify calling off the merger, he says.
Bank of America CEO Ken Lewis also came under attack after Merrill, with the knowledge of BofA executives, gave billions in bonuses to its employees even as Bank of America was asking for more rescue money from the government. Current Bank of America execs will also be called on Tuesday for testimony, while Committee Republicans are also calling for testimony from the Treasury Secretary and other government officials.
