Merrill Lynch, "in a surprising fit of corporate irresponsibility," had "secretly moved up" the date of last year's bonus plan, "and then richly rewarded their failed executives" with $3.6 billion in bonuses, New York State attorney general Andrew Cuomo tells U.S. House banking committee chairman Barney Frank in this letter.
Merrill parceled the bonus cash shortly before reporting a "disastrous" $15 billion fourth-quarter loss that provoked a $20 billion U.S. taxpayer investment to Merrill's "complicit" new owner, Bank of America Corp., Cuomo added.
He admits that the $3.6 billion was spread "upon thousands of employees." But he notes that 696 Merrill executives received $1 million or more -- in a year in which the company lost huge sums for clients.
He asks if the Merrill and BofA boards "were derelict in their duties and violated their fiduciary obligations," resulting in "inappropriate use of taxpayer funds."
In case that sounds like he's building toward a civil or criminal case, and to tie his political fortunes to the wave of popular revulsion at Wall Street bonuses and subsidies, Cuomo has already subpoenaed ex-Merrill CEO John Thain and BofA Chief Adminstrative Officer J. Steele Alphin (but apparently not BofA head boss Kenneth Lewis) to tell more.