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Lawmaker seeks more data in BofA-Merrill deal

WASHINGTON (Reuters) - A U.S. Republican lawmaker involved in a congressional probe of government influence over Bank of America’s purchase of Merrill Lynch has asked for more documents from the Treasury Department and the New York State Attorney General to shed light on government intervention in the banking system.

A Bank of America branch is pictured in New York May 7, 2009. REUTERS/Shannon Stapleton

Lawmakers have pressed the Treasury Department and the Federal Reserve for details surrounding Bank of America's BAC.N acquisition of Merrill late last year at the height of the financial crisis.

In a series of tense congressional hearings on the deal, some lawmakers criticized Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson for exerting undue pressure on Bank of America to go through with the purchase even as huge losses at Merrill became apparent. Other members of Congress charged authorities with forcing Bank of America to withhold information of Merrill’s problems from shareholders.

Bernanke said the Fed acted with integrity and denied pressuring the company to withhold any information.

The panel, the House of Representatives Committee on Oversight and Government Reform, will hear testimony from Paulson on Thursday. The hearings have given vent to congressional anger at authorities over bailouts of large banks and financial firms but have not conclusively demonstrated any clear wrongdoing or illegal actions.

The committee’s top Republican, Californian Darrell Issa, wrote to Treasury Secretary Timothy Geithner July 2 asking for all records surrounding an October 13 meeting and decision to use government bailout funds to buy equity in financial institutions.

Last October, Congress gave the Treasury Department under Paulson a $700 billion bailout fund to buy soured credits from banks to rebuild shattered credit markets. Instead, it used money from the fund to buy equity stakes in banks instead, arguing that would be more effective to restore bank health.

Issa also asked the Treasury to provide records and communications, including notes and e-mails from a range of officials, relating to the Bank of America-Merrill merger from August 1 though February 1.

Issa also asked New York Attorney General Andrew Cuomo in a July 1 letter to provide transcripts of interviews with Paulson and any other communications with federal officials on the Bank of America-Merrill merger.

Cuomo’s assertion in April that Lewis acted under pressure from authorities was the revelation that launched the congressional investigation.

The panel, led by Committee Chairman Edolphus Towns, a New York Democrat, in early June subpoenaed and subsequently made public Fed e-mails relating to the transaction.

In contrast, Issa’s July letters are requests. A spokesman for Issa said Democrats were not seeking a wide array of documents for the investigation ahead of the Thursday hearing.

Towns’ office could not immediately be reached for comment.

Editing by Phil Berlowitz

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