http://www.cnbc.com/id/31528412/
The Federal Reserve sought to hide its extensive involvement and concerns about Bank of America's [BAC 12.35 0.12 (+0.98%) ] acquisition of Merrill Lynch amid the latter's
Source: U.S. Congress
Rep. Darrell Issa
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worsening financial condition, a top Republican congressman said on Wednesday.
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"The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the 'shotgun wedding' that was the Merrill Lynch acquisition," Rep. Darrell Issa of the House Oversight and Government Reform Committee said in a statement released to Reuters.
"The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," the statement said.
Bernanke said in a statement to Congress obtained by CNBC that the Fed acted with the "highest integrity" and denied exerting any undue pressure in the deal.
The committee has obtained a number of emails and documents from the U.S. central bank about its behind-the-scenes role in the merger, according to sources familiar with documents.
In an interview with CNBC, Issa said Congress will explore the allegations in further detail during upcoming hearings.
"We can't tolerate government officials using their power," he said. "We hope that we'll be vindicated all through the process as we ask our witnesses to answer some tough questions."
Bernanke is "going to have to answer for this role" in the deal, though Issa said the final package put together for the BofA-Merrill deal was not illegal.
"There's nothing wrong with the deal as it turns out, but there is something wrong with interfering with businesses taking normal due diligence and informing their stockholders," he said.
As Bernanke's appointment nears its expiration, the turmoil over the merger could play a factor in whether President Obama will grant the chairman another term.
"The fact is that Bernanke has to be held accountable for how handled this wreck both publicly and privately, and right now there is serious doubt about whether privately he in fact handled it correctly," Issa said.
