| NH Citizens Alliance |
| Over thirty years of working for social, economic, and political justice for all |
| New Hampshire Citizens Alliance 4 Park Street, Suite 304 Concord, NH 03301 603-225-2097 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Bank of America: Bailout, or Free Bonus Money?
As many of us know, the bailouts used to "help" the financial distress of our economy have
seemed to be used in ways for which they were unintended. Here is a simple time line of the
financial activities of one of the biggest bailout recipients, Bank of America:
2008
2009
2010
As you can see, if Merril Lynch had restrained from awarding bonuses, the
award package from the Federal government (and the tax payers) would only
have needed to be $5 billion, instead of the $25 billion awarded to BoA after its
aquisition of Merril Lynch.
As many of us know, the bailouts used to "help" the financial distress of our economy have
seemed to be used in ways for which they were unintended. Here is a simple time line of the
financial activities of one of the biggest bailout recipients, Bank of America:
2008
- Jan 11 : Bank of America (BoA) pays $4 billion for Countrywide Financial Mortgage
- Jan 17: Merril Lynch suffers $11.5 billion in quarterly losses
- Sept 14: Bank of America purchases Merril Lynch for $50 billion
- October 1: Senate passes $700 billion bailout plan
- October 3: Congress passes bill, President Bush signs it, and BoA receives $25 billion
- October 6: BoA reports a 68% drop in profits for the year 2008, and sells $10 billion
of stocks to raise capitol.
2009
- Jan 16: BoA receives another $20 billion in Federal Aid to absorb losses incurred by
the purchase of Merril Lynch. - Hours after the aid package is awarded, Merril Lynch announces a 2008 4th quarter
loss of $15.3 billion - Merril Lynch is reported paying $15 billion in bonuses in 2008 (the same amount
they show as a 4th quarter loss). - April 20: BoA reports a quarterly profit of $4.2 billion
- July 21: BoA reports spending $1.5 million on lobbying in DC.
- August 3: BoA pays $33 million to settle claims by the Securities and Exchange
Commission that it misled shareholders about 3.6 billion paid in bonuses by Merril
Lynch before Merril Lynch was purchased by BoA. A judge overturned the settlement,
and required both companies to go through a trial, set for late 2010. - Dec 2: BoA says it will repay the $45 billion, as more federal scrutiny focuses on the
company. BoA repays $26.2 billion in cash. This amount lowers the Federal Award
monies to an amount where Federal regulation is reduced.
2010
- March : BoA unveils a program to forgive some mortgage debt to help keep distressed
borrowers from loosing their homes. This program costs BoA about $3 billion in
capitol, but only helps 45,000 of the 1,2 million loan holders in default with BoA. - This program is announced simultaneously with the news that BoA reached a
settlement with the state of Massachusetts for predatory lending.
As you can see, if Merril Lynch had restrained from awarding bonuses, the
award package from the Federal government (and the tax payers) would only
have needed to be $5 billion, instead of the $25 billion awarded to BoA after its
aquisition of Merril Lynch.