Bank of America Corp.

Bank of America is the second-largest bank in the US (behind Citigroup). It has the country's most extensive branch network though, being located in 30 states. In 2004, Bank of America purchased FleetBoston for $50 billion and in 2006, credit card giant MBNA. In 2008 the bank purchased Merrill Lynch during the financial crisis.

Financial crisis and the bailout
On September 15, 2008, as the financial crisis peaked and the same day that Lehman Brothers declared bankruptcy, Bank of America purchased Merrill Lynch for approx. $50, or $29 per share. October, 2008, the Treasury assisted Bank of America with $25 billion through the Capital Purchase Program. In January, 2009 the Treasury invested another $20 billion.

Merrill Lynch and investment bank leverage
In 1975, the SEC’s trading and markets division ruled that investment banks must maintain a debt-to-net capital ratio of less than 12 to 1. In 2004, following extensive lobbying by the investment banks, the SEC under chairman Christopher Cox authorized five investment banks to develop their own net capital requirements. This enabled investment banks to push borrowing ratios to as high as 40 to 1. These five investment banks were Goldman Sachs, Morgan Stanley, Lehman Brothers, Bear Stearns, and Merrill Lynch. This very high debt-to-reserves helped lead to the financial crisis of 2008 by weakening the ability of these institutions to recover from losses incurred when the risky CDO and CDS bets failed.

Lee A. Pickard, who had been Director of the SEC’s Division of Market Regulation when the 1975 12-1 rule was ordered, said of the change, "The SEC modification in 2004 is the primary reason for all of the losses that have occurred."

At the time of its purchase by Bank of America was leveraged at a ratio of 35.5 to 1.

Contribution to the crisis
Bank of America's strategy of growth helped lead them to become a "too big to fail" bank. In 2003, Bank of America grew to $1.4 trillion after it bought FleetBoston, making it the second-largest U.S. bank holding company in terms of assets. In 2004, Bank of America purchased FleetBoston for $50 billion and in 2006, credit card giant MBNA. In 2008 the bank purchased Merrill Lynch during the financial crisis.

In its January 16, 2009 earnings release Bank of America revealed that Merrill Lynch had suffered a massive $15.3 billion loss in its fourth quarter. These losses made it necessary for the U.S. Government to increase the amount of its bailout of Bank of America. Bank of America CEO Kenneth D, Lewis later claimed that the government ordered him to complete the acquisition, even after he had discovered the losses. Lewis resigned in September, 2009, effective January 1, 2010.

Bailout amounts
Bank of America received $45 billion in direct government aid from the TARP program, and a further $118 billion worth of guarantees against bad assets.

Political contributions
Decade-long campaign contribution total (1998-2008): $11,292,260

In 2008 Bank of America led the list of TARP recipients in political contributions and lobbying, spending $14.5 million. The amounts were $5,752,630 in political contributions and $8,790,000 for lobbying.

These numbers do not include the fourth quarter of 2008.

The 2008 top recipients of campaign contributions were
 * Barack Obama (D) $230,552
 * John McCain (R) $126,175
 * Hillary Clinton (D) $106,071
 * Rudy Giuliani (R) $69,050
 * Chris Dodd (D) $63,100

James H. Hance Jr., then Vice Chair of Bank of America, was a Bush Ranger having raised at least $200,000 for Bush in the 2004 presidential election. Two more Bush Rangers in the top leadership were Charles M. Cawley, Ex-Chief Executive Officer of MBNA and Lance Loring Weaver, Executive Vice Chair of MBNA.

Bank of America gave $1,167,222 to federal candidates in the 05/06 election period through its three political action committees - 34% to Democrats, 65% to Republicans, and 1% to other parties.

Lobbying
Decade-long lobbying expenditure total (1998-2008): $28,635,440

In 2008 Bank of America led the list of TARP recipients in political contributions and lobbying, spending $14.5 million. The amounts were $5,752,630 in political contributions and $8,790,000 for lobbying.

2008 Top Lobbying Expenditure Recipients: 1.Bank of America $4,090,000 2.King & Spalding $480,000 3.Quinn, Gillespie & Assoc $360,000 4.Smith-Free Group $250,000 5.Bryan Cave Strategies $160,000

The company spent $3,366,014 for lobbying in 2006. $1,380,000 went to eight outside lobbying firms with the remainder being spent using in-house lobbyists. Lobbying firms included Quinn Gillespie & Associates and Covington & Burling.

Use of bailout funds for lobbying
After receiving government funds, Bank of America continued to spend millions of dollars to lobby Congress, including to "fend off restrictions on executive compensation, home mortgage lending and credit card fees" as well as in opposition to the Consumer Financial Protection Agency. They also hosted efforts to defeat the Employee Free Choice act.

Personnel and political appointees
Senior Management
 * Kenneth D. Lewis, Chief Executive Officer, resigned effective December 31, 2009, $1,500,000
 * J. Steele Alphin, Chief Administrative Officer
 * Gregory L. Curl, Chief Risk Officer
 * David C. Darnell, President, Global Commercial Banking
 * Barbara J. Desoer, President, Home Loans & Insurance, $800,000
 * Anne M. Finucane, Global Chief Strategy and Marketing Officer
 * Sallie L. Krawcheck, Global Wealth & Investment Management
 * Thomas K. Montag, President, Global Banking and Markets
 * Brian T. Moynihan, President, Consumer & Small Business Banking
 * Joe L. Price, Chief Financial Officer, $800,000
 * Richard K. (Ric) Struthers, President, Global Card Services

Board members:
 * Walter E. Massey, Chairman of the Board, Bank of America Corporation
 * Susan S. Bies, Former Member, Board of Governors of the Federal Reserve System
 * William P. Boardman, Retired Vice Chairman, Banc One Corporation and Retired Chairman of the Board, Visa International
 * Frank P. Bramble, Sr. Former Executive Officer, MBNA Corporation
 * Virgis W. Colbert, Senior Advisor, MillerCoors Company
 * Charles K.  Gifford, Former Chairman, Bank of America Corporation
 * Charles O. Holliday, Jr., Chairman, E.I. du Pont de Nemours and Co. (DuPont)
 * D. Paul Jones, Former Chairman, Chief Executive Officer and President, Compass Bancshares, Inc.
 * Kenneth D. Lewis, Chief Executive Officer and President, Bank of America Corporation
 * Monica C. Lozano, Publisher and Chief Executive Officer, La Opinion
 * Thomas J.  May, Chairman, President and Chief Executive Officer, NSTAR
 * Donald E. Powell, Former Chairman, Federal Deposit Insurance Corporation
 * Charles O. Rossotti, Senior Advisor, The Carlyle Group
 * Thomas M.  Ryan, Chairman, President and Chief Executive Officer, CVS/Caremark Corporation
 * Robert W. Scully, Former Member, Office of the Chairman of Morgan Stanley

Earnings and bonuses
According to a report by the Attorney General of New York State Bank of America paid $3.3 billion in bonuses to executives and employees while earning $4 billion after being a recipient of TARP bailout funds of $45 billion.

Breakdown of Bank of America 2008 bonuses from the Attorney General's report ;
 * Top four recipients received a combined $64.01 million.
 * The next four received $36.85 million.
 * The next six received $31.39 million.
 * Number that received more than $10 million: 4
 * Number that received more than $8 million: 8
 * Number that received more than $5 million: 10
 * Number that received more than $3 million: 28
 * Number that received more than $2 million: 65
 * Number that received at least $1 million: 172

In addition, in 2008 Bank of America purchased Merrill Lynch. According to the report by the Attorney General of New York State Merrill Lynch paid $3.6 billion in bonuses to executives and employees while losing $27.6 billion after being a recipient of TARP bailout funds of $10 billion.

Breakdown of Merrill Lynch 2008 bonuses from the Attorney General's report ;
 * Top four recipients received a combined $121 million.
 * The next four received: a combined $62 million.
 * The next six received: a combined $66 million.
 * Number of individuals that received more than $10 million: 14
 * Number that received more than $8 million: 20
 * Number that received more than $5 million: 53
 * Number that received more than $3 million: 149
 * Number that received at least $1 million: 696

Involvement in March of Dimes
The March of Dimes has funneled millions into animal testing on primates, rats, mice, cats, dogs, rabbits, pigs, sheep, guinea pigs and opossums. They include nicotine, alcohol and cocaine addiction experiments; sensory deprivation and transplanting organs from one species to another.

Bank of America is a corporate donor to March of Dimes.

Slavery reparations lawsuit
In March 2002, FleetBoston - bought by BofA in 2004 - along with insurance company Aetna and railroad company CSX Transportation were named in a lawsuit filed in U.S. District Court in New York "seeking damages for abuses suffered by slaves and accusing the companies of profiting from slavery". FleetBoston traces its roots back to a bank started by John Brown, a notorious Rhode Island slave trader.

Ad boycott against Air America Radio
Bank of America refused to advertise on the progressive Air America Radio. In October 2006, around 90 companies, including Bank of America, told ABC Radio Networks that they did not want their ads to play on radio stations that carried Air America Radio.

Contact details
100 N. Tryon Street Charlotte, NC 28255 Phone: 704-386-5681 Fax: 704-386-6699 Web: http://www.bankofamerica.com

External resources

 * Sold Out - How Wall Street and Washington Betrayed America, Consumer Education Foundation, March, 2009.

External articles

 * "Profile: Bank of America", Co-op America, accessed December 2007.
 * "Big Bank Profile: Bank of America", Service Employees International Union, accessed October 2009.