Bonus round: Good timing today by Cuomo on Merrill's bad timing last year
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Read between the lines of this afternoon's breaking story. The Wall Street Journal splashes "Cuomo Says Merrill Misled Congress."
It's not like this is the freshest news, although this particular story, based on a Cuomo court filing today (filing and exhibits) appears to be a direct counterattack by the AG to yesterday's reports that Cuomo's probe of the Merrill bonuses might have been hitting a dead end.
Today, the WSJ's Susanne Craig writes:
According to a Nov. 24 letter included with the filing, a lawyer for Merrill told Rep. Henry Waxman (D., Calif.), chairman of the House Committee on Oversight and Government Reform, that "incentive compensation decisions for 2008 have not yet been made."
But Merrill's compensation committee had voted nearly two weeks earlier to accelerate the bonus payments to December from January, according to testimony from the head of Merrill's compensation committee at the time.
Craig characterizes the AG's "disclosures" as "an aggressive turn in Mr. Cuomo's probe of bonuses paid by Merrill in its last days as an independent company, even as the firm was piling up a fourth-quarter net loss of $15.84 billion." She adds:
Sorry, WSJ, but this does not mark an "aggressive turn" in Cuomo's probe. It's just good timing by Cuomo — not only does it follow yesterday's rip at Cuomo for supposedly hitting a snag in his probe, but it also comes on a day when there's little competition for attention, save for the news that the market is making a mild, probably temporary recovery. So this is a the right time for Cuomo to hand this story to reporters via a court filing — late on a midweek afternoon so that it gets good coverage the rest of Wednesday (it's currently atop the WSJ's home page) and in Thursday's papers.
Although the Merrill probe is part of a stirring drama, today's "disclosures" are mostly old news. Go back a month: On February 12, the Daily News's Greg B. Smith reported, in "Cuomo reveals 4 top Merrill Lynch execs grabbed big bucks just before government-financed takeover":
In all, Merrill doled out $3.6 billion in bonuses just days before Bank of America finalized its deal to buy the collapsing firm — with the help of $45 billion in taxpayer money.
Cuomo presented his initial findings ... to Rep. Barney Frank (D-Mass.), whose House Financial Services Committee [was scheduled to hold hearings] in Washington on how banks are spending bailout funds.
"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," Cuomo wrote to Frank.
Returning to the present: You expect Cuomo to play this obvious example of excessive greed by Merrill for all it's worth, and that's what he's doing. Not that Merrill shouldn't be probed till it hurts, but what's an easier target? And what's a better way to get instant coverage than to file court papers in this continuing case?
Not that today's WSJ story is chopped liver. Reporter Craig inserts good background on the probe of Merrill:
Specifically, Mr. Cuomo is concerned that Bank of America and Merrill didn't disclose when the takeover deal was reached in September their agreement to a bonus payout of as much as $5.8 billion, according to people familiar with the investigation. Mr. Cuomo also is scrutinizing Bank of America's role in setting bonuses of several Merrill executives.
In Wednesday's court filing, Mr. Cuomo claimed that Bank of America "clearly could have influenced, if not controlled, the timing" of Merrill's bonuses, despite "its representations to the contrary."
