The House Oversight Committee has launched an investigation into whether Merrill Lynch misled it when the firm told the committee, in a letter sent last November, that no decisions had been made on bonuses.
As we noted earlier today, New York Attorney General Andrew Cuomo, who is probing the bonuses, included the letter, dated November 24, in court filings made yesterday. Cuomo also included testimony from a Merrill director, saying that the firm decided November 11th to award bonuses that December. Cuomo, who is trying to persuade a judge to compel Bank of America to disclose information on the bonuses, suggested that the testimony implies Merrill’s letter was designed to mislead the committee, which was conducting its own invesitgation of the bonuses, and was chaired at the time by Rep. Henry Waxman (D-CA).
Congress rarely takes kindly to being misled, and this appears to be no exception. The committee’s current chair, Rep. Ed Towns (D-NY), today issued a statement asserting that the Cuomo filings “raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee’s investigation,” and adding that Towns had directed committee lawyers to begin a “detailed investigation of this allegation.”
Lying to a Congressional investigation, even in a letter, could potentially lead to perjury charges. There’s an important difference between misleading and lying, however, and neither Cuomo nor Towns have accused Merrill of the latter.
Still, things are getting interesting…
The full statement from Towns follows after the jump …
CHAIRMAN TOWNS STATEMENT ON THE POSSIBLE OBSTRUCTION OF THE COMMITEE’S INVESTIGATION INTO EXECUTIVE COMPENSATION AWARDS
“The Committee takes very seriously Attorney General Cuomo’s allegation that Merrill Lynch provided misleading information to Congress regarding bonuses for its top executives. These filings raise the disturbing possibility that Merrill Lynch executives may have obstructed this Committee’s investigation into executive compensation practices and the awarding of bonuses at the company.
“To get to the bottom of this matter, I have directed Committee attorneys to begin a detailed investigation of this allegation, focusing on two primary issues: (1) did Merrill Lynch executives attempt to cover-up the decision to pay its top employees $5.8 billion in bonuses on the eve of its merger with Bank of America; and (2) as a part of this cover up, did Merrill Lynch executives deliberately attempt to mislead this Committee in their November 24, 2008 letter, asserting that ‘incentive compensation decisions for 2008 have not yet been made.’
“Committee attorneys are also reviewing the responses of other major financial institutions to our October 2008 letters regarding executive compensation and the use of TARP funds. We will not hesitate to exercise every means at our disposal to protect the integrity of the Congressional investigation process and to bring real transparency to the use of TARP funds.”