tv [untitled] CSPAN June 28, 2009 2:30pm-3:00pm EDT
they have to do research that there appears consider relevant. if they do in up to get tenure, it even more they get promoted. it is really up to individual professors. it is a matter of finding one with the knowledge of financial regulation and law the interest to do this. that is better done and of law school than in a department of economics. people who work on securities regulation. but there are serious problems with the obama justice department and this is an example. the pardon and then the repeal. i did not come here with it in the front of my mind, as of the details are not there. but there is a situation in california where a former basketball star has been elected mayor. there was a similar trail of misuse of the government grant, a criminal investigation. investigation. the criminal investigation has gone away.
host: last fall, republican -- last call, republican from palm beach. caller: we can cut the mycogen as -- michael jackson's, we all have a billion or two coming in. our government itself was basically set up for defense. somehow or other in the last 40 or 50 years it has gone from local people taking care of local needs to where it is inclined with the county, state and federal government that when they go to cut something they cannot because it will cut the federal money and the state money and the county money. all of the local money is going to washington and we have to depend on washington telling us what we need locally. in the education system, the family structure is broken down
so much. instead of one parent, whether it being a male or female being home with the kids, they have to depend on other people. the whole structure of this country has fallen. economics should take care of itself between the seller and buyer. guest: there always is the issue of how far the state should extend itself. the government's was not established for defense. it was provided to provide domestic infrastructure, an integrated, a single market and selling disputes within the states. it was established because of
the necessity for a national government so that states can better prosper together. that is what we have gotten. the state and the federal government extend its hands into our lives. we elect people and we can attack -- continually like people to continue to do this. there is always a question of where do you draw the line? that line will be in a variety of places.s. >> tomorrow, faiz shakir end of kyle from real clear politics discuss a variety of topics.
next, peter brookes will also speak topic. will be lead at 7:00 p.m. eastern on c-span. >> conservation and the beginning of the 20th century was a battle. just like now on land issues. this historian on teddy roosevelt and his leading role in the early days of the conservation movement. >> he was not where you call a holistic. he believed in hunting. he did not believe in hunting so that you would make a species extinct. yes, he cared about butterflies, wild flowers. he wanted to make sure we have a place for that in modern society. >> tonight, part two would douglas brinkley.
that will be at 8:00 p.m. on c- span. or you can listen on xm satellite radio. or listen on podcast. >> this week on prime minister's questions, the fate of british hostages in iraq and a house inquiry. he also in his questions about government spending and u.k. jobs. we will then show you the ceremony to welcome the new speaker, john, who presided over his first questions time since being elected. that is tonight at 9:00 p.m. eastern. on thursday, republican senators were appointed to new leadership positions. this follows the leadership resignation of nevada senator john ensign for allegations of an extramarital affair.
thune will be policy chair and senator murkowski will replace him as senator conference by share. the announcement came at a news conference in the capital. >> good afternoon, a one to introduce you to our two newly elected officials. we're pleased to welcome them to the team. they were already there in a sense. senator tune was vice chair and she was by my department at the leadership table. we have now made these changes and doned i'm happy to call on m for questions. >> thank you, leader.
i want to thank my colleagues for giving me the opportunity to serve as policy committee chair. i am very much looking forward to continue working with the leadership team as we shape an agenda that i think will move america forward and serve as a counter to some of the agenda items we think will be detrimental. i think they have given us a lot of opportunity to work, whether proposing the largest tax increase, spending at unprecedented levels, putting on a new energy tax, nationalizing one sixth of the economy with health care system, taking ownership interest in now over 500 companies. there are so many things out
there that create a great opportunity for us to put up the distinction between our vision and theirs. i look forward to not only challenging democrats, but also advocating an agenda for america's future that will help to address the challenges american people face. i want to congratulate senator rakowski for joining this leadership team also. i think we will have a fun time. we have great chemistry. i think we have a great deal of unity in the things we're trying to accomplish in the senate. >> thank you, leader mitch mcconnell, and to my colleagues for this opportunity to serve in the capacity of leadership. i have been sitting at the
leadership cable during this congress. there is a difference between being there and offering input and inside and actually representing other members of the conference. as senator thune has mentioned, we have opportunities and challenges, and other health care, immigration, the issues are complicated and complex. part of what we need to do at the republican conference is build up the agenda and explained what it is. it is not only an issue pushing back on health care plan that does not deliver what the president seeks to reduce costs
or increase access. we need to be with to express what our republican proposals are and how they truly fit in with the agenda whether from alaska to maim or parts in between. being a member of the leadership team and helping in that capacity as we build our coalition in advance a message that resonates with the americans, this will be a challenge and i look forward to it. thank you. >> what are your feelings and reactions and you hear people with the events regarding senator and sign? then predict more -- than do you predict more moral gloom for the
party going gorward? >> we are addressing important issues here. what to do about guantanamo. the unanimous in view of my colleagues is that we're here to do the people's business. >> is it getting in the way of what you are trying to put forward? has two scandals, two weeks in a row which have dominated the headlines, interfere? >> it is what i have just said. we don't intend to be distracted by any other shoeissues that mit be out there. we are trying to decide what to do about the finest health care system in the world which we already have. it definitely needs fixing. i can speak for all republicans
to say that we do not need the status quo is adequate. but we intend to oppose things like a government-run plan, things like most of my members who are not in favor of the so- called pay or play proposal. we will grapple with health care. >> do you expect an agreement on homeland security this week? >> yes, i believe we will reach a consent agreement. i think the majority will probably go to homeland next intra to get some appropriation bills behind us here in the next recess. thank you, everybody.
>> today, house republican chairman mike pence discusses his party's legislative priorities this year. >> what we do not need is to introduce a government-run option into our private health insurance system. i know there's a lot of talk about competition. americans love competition. i do too, but -- the federal government competes with the private sector the way an alligator competes with a duck. i think most americans, and i saw this at my town hall meeting on monday in richmond, most americans understand the that the federal option became available to all americans that millions of americans would lose the health insurance they have now. not because the government would
mandate in it, but because millions of employers seeing in available public auction would simply inform their employees -- we are no longer a incurring the expense. you can call the government to get it. >> to date @ 6:00 p.m. eastern here on c-span. >> this week, prime minister gordon brown discusses the fate of british hostages in iraq and an upcoming inquiry on the iraq war. he also answers questions on government spending and u.k. jobs. following that we will show you the ceremony to welcome the new speaker, the john burko the presided over his first question time. tonight at 9:00 p.m. eastern. >> and knelt federal reserve
chairman ben bernanke discusses last year's bank of america merger with merrill lynch, a deal that included billions in taxpayer dollars and over $100 billion in government guarantees. this lets about three hours, 16 minutes. -- it lasts about three hours, 16 minutes. >> the meeting will come to order. order. today we are continuing our investigation of the bank of america acquisition with merrill lynch. this was a most unusual transaction. on september 15th, 2008 bank of america announced that it was purchasing merrill lynch, creating one of the nation's largest financial institutions. at the time, it was a merger negotiated between two private parties.
design for the exclusive benefits of private shareholders and paid for exclusively with private money. for months later on january the 16th, 2009, the world discovered that merrill lynch had experienced a $15,000,000,000.4 quarter loss. most importantly, we discovered that the merger had taken place only after the federal government had committed to give bankamerica $20 billion in taxpayer money. in short, bank of america's acquisition on merrill lynch began in september, 2008 as a private business deal, and was completed in january of 2009 with a 20 billion-dollar tax bailout. what happened in the interim? it has been shrouded in secrecy but the broad outline is this.
when bank of america urged its shareholders to approve the acquisition of merrill lynch, on december 5, 2008, there was no public disclosure of any problems with the transaction. i have a bank of america ceo, ken lewis has testified that just nine days after the shareholder vote, he discovered a 12 billion-dollar loss at merrill lynch. mr. lewis said he told then treasury secretary hank paulson that he was strongly considering backing out of the deal. according to lewis, paulson ultimately told him that if he didn't go through with the acquisition, he and the board would be fired. internal e-mails we have obtained from the federal reserve indicate officials there were very skeptical about mr.
lewis' motive in threatening to back out of the merrill deal. fed chairman ben bernanke thought lewis was using the merrill losses as a bargaining chip to obtain federal funds. fdic chairwoman sheila bair was opposed to providing assistance, saying it might ford does not want to do this. in essence, ken lewis claimed that the government made-- made me do it. but was bank of america forced to go through with the deal or was this just an old-fashioned shiekh down? these questions are particularly important with the administration's new proposal to give broad new powers to the federal reserve. i believe that before congress acts on the president's financial services, reform proposal, we need to have a thorough understanding of what
caused the current financial crisis and how the federal government responded. unfortunately, much of what the fed, the treasury and other agencies did, in these transactions remain shrouded in secrecy. it is time to the-- and shine some light on these events. the bank of america, merrill lynch deal is a case in point. new e-mails we have obtained from the fed indicate that fed officials may have attempted to keep other agencies in the dark about what was going on. k-fed e-mail discusses not telling the office of the comptroller of the currency what is happening. others discuss how to minimize the amount of information given to the sec. in a remarkable exchange, fed
officials note that an sec official can be counted on to be discrete. i am not going to prejudge the issues. at this point, we are not even close to finishing this investigation. bank of america ceo ken lewis gave us his story. now it is dead chairman bernanke's turn to give his side of the story. next, it will be former treasury secretary hank paulson to give his side. we need to get all of the facts out on the table before we are in a position to say what happened and when it happened. but, i promise you this. we will follow this investigation wherever the road leads, and we will do our best to make sure the facts get out on the table, where everyone can
see them by subpoena if necessary. let me stop and thank chairman bernanke for coming today to this hearing. and i look forward to your testimony. i now yield five minutes were ranking member on the full committee, mr. derrell eyes of california, for his statement. >> thank you mr. chairman for holding this second hearing in a series today. our work together on a bipartisan basis should in fact be a model for all the members of congress. today chairman bernanke's here is part of this process, not because of one side or the other, but because we came to a consensus that for all the good work in a financial crisis, oversight's still needed to discover what was or was not done, was it consistent with the kind of behavior behind closed
doors that we would like to always know is going on, even when appropriately government shares information, only discreetly with other government agencies. additionally, yours and my role as reformers is critical in a process in which the president's financial reform system or proposal has included broad and sweeping increases in chairman bernanke or his successors powers. additionally, former secretary paulson, acting in good faith and in concert, in fact deserves his opportunity to tell us about the events. let there be no doubt mr. chairman, all of this on the dais are aware that 24/7, leaders of the fed, the treasury, the fdic, the sec and the sec all work diligently to get this out of a financial crisis that was many years in
the making and it almost every case not something in which those getting us out participated in any direct way, and in fact was done in the best interest of the american people and i want to thank chairman bernanke for its effort and his major role in that effort, which is still ongoing today. to the committee's investigation we have learned the federal government, led by both chairman bernanke and then secretary paulson, made certain threats against ken lewis during a time in which he was in fact considering pulling out or renegotiating the merrill lynch merger. there been conflicting reports under oath by ken lewis and by secretary paulson about what occurred. to his credit, chairman bernanke has been quick to give as written responses both publicly and privately, and today we
would hope would lead to a thorough understanding of whether in fact there is a vast misunderstanding of the threat was, what the intent was, whether or not what we often called, and i have called, a cover-up was in fact simply appropriately determining why an agency should be not informed. i for one personally doubt that all of these can be explained away. but it is very possible that today, said it will show was that if we all had to do it again we would do it differently. i think is important today we give chairman bernanke a falling complete opportunity to talk about the environment in which she was working, his desires and reasons for doing what he did and were discussions that he might or should or could perhaps replace the board of the ceo of bankamerica may have in fact
been blown out of proportion, may have been misunderstood. peifer one though in looking at main street america, the stockholders, who in some cases cut less than it would have gotten through other means. this includes chrysler, general motors and of course bankamerica and merrill lynch. i am also deeply concerned that going forward, if the systemic risk proposal by the president, which would give a vast authority over any entity, a bank or otherwise, that represents a potential systemic risk is to be given to an agency and if mr. chairman, that is to be the fed and if that power is used, what will be the oversight? what will be the consultation? how will we know that although the fed has the lead, will the sec, the occ and other agencies charged with their responsibilities always be kept informed? i appreciate today mr. chairman
that not everyone on the day as agrees that the focus is on what was done behind closed doors relating to this merger. others may say, and it is their prerogative, that the question is what did the officers and directors of these companies do? i for one am also interested to hear that but today primarily i would like to understand how we can have statements made by government officials be so different and what the evidence provided today to us in the way of e-mails and other documentation appears to see changes and disagreements that cannot be explained away. mr. chairman, i look forward to continuing this on a bipartisan basis. your support in friendship and their ability to work together in a way not often found in congress, has made this congress more effective, this committee more effective and i thank you for your service and i yield back.
>> i think of the ranking member for a statement and for the words as well. the kind words. this time i yield to the ranking member of the subcommittee on the messy policy of course for five minutes, and then the gentleman from cleveland who is done a fantastic job, congressman kucinich. >> thank you very much. mr. chairman and chairman bernanke, contrary to the popularly held belief that the government went too far in the bank of america and merrill lynch dealed, our investigation reveals what is remarkable is what the government did not do. in two meetings in december 2008, bank of america's ken lewis asserted that he had only recently become aware of the deteriorating situation at merrill lynch. he asserted that he believed he could justify invoking the material and if that was to back
out of the deal. and he asserted he needed considerable help from the government, including $13 billion more in new cash as well as protection from merrill lynch's losses. staff and officials at the fed looked more closely at the basis for louis' and determine, and this is a quote that there were somewhat suspect. the fed found in contribution to the representation that bank of america failed to do adequate due diligence in acquiring merrill lynch. the fed found that bank of america had known about accelerating losses at merrill lynch since mid november when shareholders could use that information to decide on the ratification of the merger. senior officials of the fed believed that bank of america could be in violation of securities laws for failing to inform shareholders about the merrill lynch colossus known in mid november. for the more, they believe that ken lewis's threat of invoking a
mac was a bargaining chip and bank of america was experiencing its own losses independent of merrill lynch in needed to be buildout itself in that there were serious doubts about the confidence of bank of america's management. yet, in spite of the fed paused doubts felt about ken lewis's management of bank of america, the feds leadership the fed required no changes whatsoever in bank of america's deficient corporate leadership. the fed even gaigave it more moy than what ken lewis had originally asked for. the disconnection between the analysis of the fed about what went wrong at bank of america and what the fed was willing to do about it is significant for all of us and is the subject of today's hearing. if the bank of america/merrill
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