Stonewalling in Style: Bank of America Subpoenaed
NY Attorney General says Ken Lewis refuses to say who got bonuses.
Feb. 27, 2009— -- In just one day, the president of Bank of America, Ken Lewis, managed to defy both President Barack Obama and New York Attorney General Andrew Cuomo.
On Thursday, Lewis refused to provide a list of bonus payments to the New York Attorney General, after arriving in New York in his $50 million corporate jet. Earlier this week, President Obama said the days of bank executives flying corporate jets "were over." Not for Bank of America.
Click here to watch Lewis arriving in one of Bank of America's luxury corporate jets.
After Lewis refused to disclose just who got what out of $3.6 billion in bonuses given to Merrill Lynch employees before the banks merged late last year, the AG's office responded harshly in the latest saga in the brewing legal battle.
"Bank of America has made the decision they don't want to turn that information over to us and we, therefore, tonight served Bank of America with a subpoena to turn over that information," said Special Assistant to the New York Attorney General Benjamin Lawsky Thursday evening, "and we intend to get that by whatever means is necessary going forward."
Lewis met with the attorney general's office for four hours, and he claimed afterwards that he fully cooperated.
Watch what Lewis had to say after the meeting.
But New York officials told ABC News the session with Lewis was ugly and combative. They accused Lewis and the bank of stonewalling, saying they refused to provide a list of which executives got what of the billions in bonuses.
Watch the attorney general office's response to the meeting.
Lewis Flew in Luxury Corporate Jet
The CEO arrived in style for the meeting, first traveling from the bank's headquarters in Charlotte on a $50 million G-5 corporate plane, and then in a premium SUV from a private jet airport in New Jersey to the Manhattan office.
Lewis flew back to Charlotte Friday morning on the same jet.
Congressman Elijiah Cummings, (D-MD), decried such "outlandish activity" by the CEOs, telling ABC News' Good Morning America today that he thinks "these folks are on another planet" and "just don't get it."
"To be very frank with you," Cummings added, "I don't really think they care."
Click here to watch Congressman Cummings denounce luxury perks for CEOs of bailed-out firms.
The bank, which has received $45 billion in federal bailout money, defended the use of the luxury private plane for the hour-and-a-half flight, saying it was justified for efficiency and timing reasons. It cost at least $5,000 an hour just for gasoline and pilots. According to travel Web sites, a scheduled commercial flight on US Airways would have cost $440.
The immediate issue for Lewis, say investigators, is whether he has told "the whole story" about the huge bonuses paid shortly before Merrill Lynch merged with Bank of America. Appearing before Congress earlier this month, Lewis said he had "no authority" over the bonuses.
John Thain Testified Early This Week
Corporate merger documents read to ABC News, however, say the bonuses would be awarded "in consultation" with Bank of America.
Merrill Lynch's John Thain testified before Cuomo's investigators earlier this week and provided a list of bonus recipients and amounts.
Investigators say 696 employees received bonuses of $1 million or more.
Four top employees were given bonuses totaling $121 million.
Thain, in his first deposition Feb. 19, had initially refused to answer questions regarding the bonuses, according to a partial transcript of that session. On Monday, he was ordered to reappear after the attorney general's office sought and received a court order compelling him to answer the questions.
The bonuses became a subject of the investigation into Merrill's merger with Bank of America by Cuomo's office after the attorney general raised whether the two banks -- which together received about $45 billion in taxpayer dollars -- worked together to arrange the early bonus plan just weeks before the merger was completed.
The bonus package, called the Variable Incentive Compensation Package, provoked outrage when it was revealed that Merrill Lynch lost $25 billion in 2008.
This post has been updated.