Congressional Allies Aided by N.Y. AG’s Suit

New York Attorney General Andrew Cuomo (D) filed a motion seeking to force former Merrill Lynch CEO John Thain to testify about his company’s bonuses, a move expected to aid lawmakers working with Cuomo in their investigations into executive compensation.

House Financial Services Committee Chairman Barney Frank (D-Mass.) and Joint Economic Committee Chairwoman Carolyn Maloney (D-N.Y.) have been working regularly with Cuomo, sources in both Washington and Albany said Monday, to assist each others’ investigations into bonuses paid to bankers receiving federal bailout funds.

“I received briefings from Attorney General Cuomo over the past few weeks and questioned [Bank of America CEO] Lewis about Thain’s actions in a hearing two weeks ago,” Maloney said. “I, along with Attorney General Cuomo, will not stand for this behavior, especially when taxpayer money is at stake.”

Cuomo filed a motion in New York state court to compel Thain to testify about when his former company, Merrill Lynch, awarded millions of dollars in bonuses to company officials before being acquired by Bank of America. Bank of America, Thain’s attorney said during depositions, had ordered the former Merrill chief not to answer.

“I’ve been directed not to disclose by [Bank of America] names other than the names of the top people who are under Section 16,” Thain’s attorney told investigators. “We were directed by Bank of America counsel.”

“We’ve been in touch with Barney Frank, and when he held that hearing, we sent a letter to Barney that day outlining all the different bonuses,” a source in Cuomo’s office said of their work with congressional leaders also investigating Thain. The source similarly identified Maloney as another congressional partner.

“Thain’s actions were egregious — nothing short of looting the company,” Maloney added, while her office maintained that information obtained in the future by Cuomo would likely be used eventually in further investigations by the Joint Economic or Financial Services Committees.

A long-rumored candidate to have interest in statewide office in New York, Cuomo’s investigation mirrors those of lawmakers. The state attorney general was rumored to be under consideration by New York Gov. David Paterson (D) to fill the vacancy left by Secretary of State Hillary Rodham Clinton in the Senate. He was passed over by Paterson, in favor of now-Sen. Kirsten Gillibrand (D).