WASHINGTON — Despite Ken Lewis' planned exit from Bank of America Corp., his deal for Merrill Lynch & Co. Inc. continues to brew anger and confusion in Congress.

The House Oversight and Government Reform Committee is set Thursday to hold its fourth hearing on the deal and is scheduled to hear testimony from the top officials at the Federal Deposit Insurance Corp. and the Securities and Exchange Commission along with B of A's general counsel and two board members.

The Obama administration had yet to move into the White House when the merger nearly derailed in December, but it became clear Tuesday that Republicans will use the hearing to drag top Democratic advisers into the fray.

"The Bank of America-Merrill Lynch merger was the outcome of a collaborative effort orchestrated by Ken Lewis, Henry Paulson, Ben Bernanke, Timothy Geithner and Larry Summers," said a spokesman for Rep. Darrell Issa of California, the top Republican on the oversight committee. "As a result of this collaboration, the taxpayers ended up footing the bill so Bank of America didn't have to absorb Merrill Lynch's losses."

Documents obtained by American Banker Tuesday aim to refute Federal Reserve Board Chairman Ben Bernanke's claim that incoming Treasury Secretary Geithner, who was still running the Federal Reserve Bank of New York at the time, "recused himself from detailed intervention or involvement in such transactions."

The documents refer to talking points Lewis used in a discussion with B of A's board, including then-Treasury Secretary Paulson's now-famous threat to fire Lewis and the board if they tried to abandon the deal, which was souring as losses mounted at Merrill. But Lewis told the board that the incoming Obama team also stood behind the threat.

"Hank made it clear that he had the concurrence of the Fed and Tim Geithner and others," according to the talking points.

A Fed spokeswoman did not comment on the latest memo and a Treasury spokesman told The Washington Post that it was "perfectly natural and appropriate that the incoming Treasury secretary would be kept apprised of key developments but he was not making decisions for the government."

The documents also seek to drive home the point that Lewis' threat to invoke a "material adverse change" clause to scuttle the acquisition was little more than a bargaining tool in an attempt to wrest support from the government.

"The basic concept is that the 'fill in the hole' … has to be on terms which are extremely favorable in order for us to give up our rights to MAC clause exercise," Brian Moynihan, B of A's consumer banking chief and a top candidate to succeed Lewis, wrote in an internal e-mail Dec. 27.

The next day, Moynihan told B of A Chief Financial Officer Joe Price in an e-mail that "we would be fine if we walked away."

The government later agreed to chip in $20 billion to complete the deal.

A further spotlight could be shed on the disagreements over the government's handling of the transaction when FDIC Chairman Sheila Bair appears before the House panel Thursday.

"Strong discomfort with this deal at the FDIC," Bair wrote in a Jan. 14 e-mail to Bernanke, according to documents already released by the committee. "My board does not want to do this, and I don't think I can convince them to take losses beyond the proportion of assets coming out of the depository institutions."

Ultimately, the FDIC did support entering into a loss-sharing agreement with B of A on a $118 billion portfolio.

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