Friday, June 12, 2009

Ken Lewis Speaks Out

Ken Lewis' Congressional testimony yesterday painted an interesting picture of a guy trying to have it both ways.

According to today's Wall Street Journal reporting on the event, Lewis both claimed he was strongarmed and coerced by Bernanke and Paulson to close the Merrill Lynch purchase, but then claimed it was a good deal, just the same.

How could both be true? If it was a good deal, why did Lewis need to be coerced?

Lewis also seems to be backtracking somewhat on the disclosure aspect of the deal. Prior to this, I am reasonably sure Lewis claimed that Bernanke told him not to disclose his concerns to shareholders prior to the vote to close the Merrill Lynch sale.

Now, Lewis is saying Bernanke didn't tell him to hide "something that should be disclosed."

One wonders whether Lewis is taking this line in order to protect himself from SEC charges.

Overall, reading the article, I'm struck with how Lewis is complicating the story as the consequences of his statements, as originally reported, have become clearer. Perhaps, too, having been relieved of his chairman role at BankAmerica, Lewis may realize that the company will not be going to bat for him if he comes clean about what really happened.

His own apparent hiding of his concerns from shareholders, and true feeling that the Merrill purchase should not have been closed, would, today, likely end in serious penalties for Lewis.

Now that this is clear, he seems a whole lot more tentative about speaking truth to power, doesn't he?

Once again, we see the results of government intervention and coercion on business and truth-telling, in general.

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