Pacino Unavailable, Cuomo Takes Over

Need a lawyer? Andrew Cuomo (above) can fill the bill, although right at the moment he is busy protecting the People of the State of New York. Cuomo is outraged that Merrill Lynch, in its dying days as a stand-alone company, funneled billions in year-end bonuses to executives. The hand-outs cannot reasonably be linked to employee performance, as Merrill lost money hand over fist in 2008. It is likely that Merrill's white knight, Bank of America, would have reduced or even denied the bonuses had they been considered after the two firms merged officially on January 1.

Cuomo, as the state's attorney general, believes that he has standing because taxpayers' money was used to grease the merger. He also raises a second, more troubling issue: that material financial information may have been withheld from Bank of America shareholders when they met on December 5 to approve the merger. They voted with knowledge neither of the coming bonuses nor of Merrill's stupendous fourth-quarter loss. Such a lack of disclosure would be a violation of New York securities laws.

President Barack Obama calls the bonuses "shameful," and Senate Banking Committee Chairman Christopher Dodd (D-CT) promises his own investigation. But they have themselves to blame as well, having pushed all along for a federal bailout of the banking industry. This is what happens when you let foxes into the hen-house. Bank of America alone has benefitted from $45 billion in cash infusions and another $118 billion in loan guarantees. Now it looks like some of that dough will be spent in litigation. And if the Treasury officials who masterminded the BofA-Merrill merger are somehow implicated in the cover-up of pertinent financial information, who knows what the eventual price tag for taxpayers will be?