Corporate Governance

Bank of America CEO Ken Lewis has been walking a fine line during his testimony before the House Government Reform and Oversight Committee.

The committee is investigating claims that the Fed and/or Treasury Department improperly pressured Bank of America to go through with its acquisition of Merrill Lynch despite the latter company's worsening losses in the fall and winter of 2008.

Lewis has acknowledged that the Treasury department said they would fire both him and his board if they backed out of the deal, but Lewis refuses to characterize that as a "threat."

Instead, he says that the seriousness of Treasury's position convinced him that they must be right about the necessity of the deal.

Committee members of both party's have ridiculed that characterization. The fiercest of those critics so far has been Rep. Elijah Cummings (D-Md.)



Rep. Jeff Flake (R-Ariz.) agreed with Cummings incredulity, but with a lighter touch:



Lewis hasn't yet given way, but the strikingly bipartisan consensus of the hearing so far is that the Treasury and Fed overstepped their bounds.

Transcripts of both exchanges after the jump:

Read more...

Senate Intelligence Committee Chairwoman Dianne Feinstein (D-Calif.) on Wednesday said she has asked the Obama administration for access to the photos of detainees that President Barack Obama decided to withhold.

Feinstein said she wants the photos as part of the committee's investigation into the interrogation techniques used by the CIA under the Bush administration.

"I have just asked to see if these are the same vintage photographs as the earlier Abu Ghirab photographs were, and I was told that they are," Feinstein said. "I think the Intelligence Committee should obtain these photographs, because my understanding is that some of them had to do with interrogation techniques, and we want to evaluate them as part of our study. Obviously, they are a useful part of our study, if in fact they deal with conditions of interrogation and detention. And I think we've established that we're going to have to have the information if we're going to do the study. They would remain classified, with us, but we would at least be able to evaluate them."

- J. Taylor Rushing

Rep. Spencer Bachus (R-Ala.) puts the number of socialists in the House at 17.

"Some of the men and women I work with in Congress are socialists," Bachus told local government leaders on Thursday, according to the Birmingham News.

Bachus gave the specific number of House socialists when pressed later by a reporter.

He made the comments during a breakfast in Birmingham in which he praised President Obama. Bachus said that Obama is a better listener than President Bush, but that Obama was being steered to the left by Congress.

"He tries to get ideas from people," Bachus said. He added that he has "some hope" for the new president.

Bachus, the top Republican on the House Financial Services Committee, actually voted for last fall's bank bailout that other Republicans had opposed and criticized as socialism. Bachus, however, has been critical of the way the bailout has been conducted and has called on the Treasury Department to be more transparent in how they make decisions.

Washington, D.C.'s metro system has already surpassed its all-time record for single day ridership on Monday, the Washington Metropolitan Area Transit Authority (WMATA) announced Tuesday afternoon.

866,681 passengers rode the D.C. subway during Monday's Martin Luther King Day holiday, WMATA said.

The tally surpasses the previous record by roughly 12,000 passengers. That record was set July 11, 2008, during which a Washington Nationals baseball game and a Women of Faith Conference took place concurrently.

There has been no official announcement of Inauguration Day's ridership, but reports had pegged ridership above 200,000 by 7:00 a.m. The metro opened at an unusually early 4:00 a.m. to accommodate high ridership.

The inauguration crowds have caused problems for WMATA. A passenger was hit by an oncoming train at the city's downtown Chinatown station, forcing the close of that station and another major downtown hub. WMATA announced the closure of downtown's Federal Triangle metro stop, as well.

President-elect Barack Obama said that bank executives can show responsibility by giving up their holiday bonuses.

Obama, in an interview with ABC's Barbara Walters, also suggested that auto executives were "a little tone-deaf" when they took private planes to Washington to ask lawmakers for a $25 billion bailout.

Read Obama talk about executives in the ABC interview below:

WALTERS: How did you feel when you read about the three heads of the auto companies taking private planes to Washington?

B. OBAMA: Well, I thought maybe they're a little tone-deaf to what's happening in America right now. And this has been a chronic problem, not just for the auto industry -- I mean, when people are pulling down $100 million bonuses on Wall Street and taking enormous risks with other people's money, that indicates a sense that you don't have any perspective on what's happening to ordinary Americans.

WALTERS: Should bank executives -- it's almost Christmastime -- forego their bonuses?

B. OBAMA: I think they should. That's an example of taking responsibility. I think that if you are already worth tens of millions of dollars and you are having to lay off workers, the least you can do is say, "I'm willing to make some sacrifice as well, because I recognize that there are people who are less well-off who are going through some pretty tough times."

AMERICAblog's Chris in Paris already supports the idea of getting workers to give up bonuses at a time when Americans are losing jobs. There's no word yet from Obama's more business-friendly conservative critics.

Congress, not the the Bush administration, first proposed spending $250 billion to buy stakes in large U.S. banks, Rep. Barney Frank (D-Mass.) said on MSNBC on Tuesday.

"It's something that I and other members of Congress pushed [Treasury Secretary Henry Paulson] to do, not simply to buy up distressed assets, bad mortgages, but to put money into the banks," Frank said. Paulson received the power to purchase the bad assets in the bailout bill passed by Congress two weeks ago.

Frank said that Paulson is now taking the right step to unfreeze credit.

"He's doing it even more enthusiastically than I had hoped he would: He's going to provide money to the banks, to the big banks," Frank said.

He added that the new coordinated effort among industrial nations should help to stem the economic crisis. European nations, including by Great Britain, have also called for using public money to recapitalize troubled banks.

"You know, a couple of weeks ago, our European allies were, kind of, gloating that America was in trouble," Frank said. "That didn't last very long. They're gloating; suddenly they realized they're in this same situation."

Now Cindy Sheehan, the anti-war activist and House candidate, is attacking House Speaker Nancy Pelosi (D-Calif.) over the $700 billion bailout.

A day after House Republican leaders blamed a Pelosi speech for the bailout bill's failure, Sheehan said Pelosi is working "for corporate interests" by backing the plan.

"She put this bill forward and voted against the will of her district," said Sheehan, who is running as an independent for Pelosi's San Francisco seat. "Thankfully my opponent wasn't able to get the votes she needed in her own House to get it to pass. I am heartened that 'We the People' won the first round in the corporate bailout of irresponsible and greedy bankers."

Sheehan, in a press release, also called for a "bottom up" rescue plan that would place a moratorium on foreclosures and include more help for homeowners.

Sheehan, whose son, Casey, was killed in Iraq while serving in the Army, has been critical of Democrats' inability to end the war. She said she's running against Pelosi because she hasn't brought up articles of impeachment against President Bush.

The House Republicans who voted against the $700 billion bailout package are proposing their own changes to the bailout bill.

Rep. Marsha Blackburn (R-Tenn.) said she supported the proposal backed by Barack Obama and John McCain to increase the amount in bank accounts that is federally insured. The government insures accounts up to $100,000, while Obama and McCain have called for increasing that limit to $250,000.

Blackburn also called for a suspension of mark-to-market accounting rules that have been blamed for the undervaluing of assets and for a decrease in capital gains taxes.

"There are so many free market-oriented portions of this proposal, of the discussion, that are still there," Blackburn said on CNN Tuesday. "And I think what we saw yesterday was people responded to constituents who were saying let's make certain we put some more free market components. They want to see Wall Street have some skin in the game. They want it to be a workout plan and not a bailout plan. And we're all committed to finding a resolution to this."

Rep. Tom Price (R-Ga.) echoed Blackburn's suggestions and suggested that Congress revisit a House Republican proposal for an insurance system for the bad mortgage assets. Conservatives have preferred an insurance system that relies on private money instead of a bailout in which the government would purchase those assets.

"Those kinds of things are positive principles that could come to the table and, I think, that kind of bill would have a majority of support on the House of Representatives right this second," Price said on MSNBC.

House Speaker Nancy Pelosi (D-Calif.) pushed back against Republican suggestions that she and Democrats are to blame for Monday's failure of the proposed $700 billion economic rescue package in the House.

"Today, when the legislation came to the floor, the Democratic side more than lived up to its side of the bargain," she said, noting that a majority of Democratic House members voted in support of the bill while most Republicans opposed it.

The bill failed 228 to 205.

Pelosi added that she told Treasury Secretary Henry Paulson, who has lobbied hard for the bill, that it wasn't her side that failed. She said that Democratic members gothis message that the package was needed to stabilize markets and protect taxpayers from a financial collapse.

"Clearly, that message was not -- has not been received yet by the Republican Caucus, but, again, we extend a hand of cooperation to the White House, to the Republicans so that we can get this issue resolved for the benefit of America's working families, to strengthen our economy and therefore strengthen our country," she said.

Sen. Judd Gregg (N.H.), one of the lead Republican negotiators for the $700 billion bailout bill, acknowledged that the measure won't help lawmakers politically.

"This is a tough vote," Gregg said on CNBC Monday. "There's no upside to casting this vote politically. People who cast this vote are going to know they did the right thing. They're going to know they backed us away from a precipice."

He said he also understood that some lawmakers are "wrapped around the ideological issue" of spending billions of taxpayer money for Wall Street.

You know, some people are wrapped around the ideological issue, which is a purity position. And, you know, I guess you can understand that.

"But you ought to be realistic, too," he said. "We are facing a calamity of incalculable magnitude. I mean, Alan Greenspan says this is a hundred-year event. Warren Buffet says he's never seen anything like it. And people who know the situation say that this is going to have a devastating effect on just ordinary Americans."

Gregg added: "You know, you can always cast the no vote and hope it passes, and then you get the perfect world, I suppose. But that's not our job. We're supposed to step up when there's a tough issue, make a -- make a tough decision and go forward."