By Silla Brush - 07/16/09 07:21 PM EDT
Paulson, making one of his first public appearances since leaving government, defended his tenure and said that the government’s actions “averted calamity.”
But Democrats and Republicans alike continued to lash out at the government’s role in a deal that resulted in roughly $20 billion in bailout money supporting Bank of America.
The bank was considering pulling out of the deal because Merrill was expected to report billions of dollars in losses. But the bank decided to move forward, completing the acquisition in January.
Paulson testified that it would have been “unthinkable” and shown a “colossal lack of judgment” if Bank of America scuttled the deal. He defended his comments to Lewis in December that the bank management could be removed by the Federal Reserve.
Bernanke has denied making any such threats, and Paulson said that he was speaking on his own behalf.
Democrats and Republicans are concerned that federal officials overstepped their bounds, but it’s unclear if there is any evidence of illegality.
“The American people, investors and the Congress were kept in the dark,” he said. “This is unacceptable and must be prevented from happening again.”
Rep. Dennis Kucinich (D-Ohio) said that he was concerned that federal officials prevented Lewis from disclosing information to bank shareholders about potential losses at Merrill Lynch. Paulson denied making any such comments.
“The lasting contribution of this committee’s investigation will be exposing Treasury’s and the Fed’s failure to require meaningful accountability from systemically significant banks in exchange for federal bailout,” Kucinich said.