Another Warning Against Corporate Campaigns
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Today, the House Committee on Oversight and Government Reform held a hearing on Bank of America's purchase of Merrill Lynch, with Bank of America's Chief Executive Officer as the sole witness. The purpose of the hearing, as stated by Chairmen Towns and Kucinich, was to learn how "the BofA-Merrill deal...quickly became a deal hinged on the receipt of taxpayer dollars" and to consider the "dispute over Mr. Lewis' claim that the Federal government pressured BofA into acquiring Merrill Lynch after BofA learned of deteriorating conditions at Merrill."
The significance of the deal and the government's role warrants Congressional hearings regarding the circumstances and the federal financial assistance Bank of America received. Exploring the facts should shed light on the actions of all parties at a critical juncture in the history of our capital markets, and demonstrate that despite circumstances regarding the deal's execution, had BofA not purchased Merrill Lynch, instability in the financial system at the time could have been far worse.
However, against this backdrop of government oversight and transparency, today's hearing was used as yet another platform for the Service Employees International Union's corporate campaign against Bank of America. Courtesy of the $67 million in reported expenditures the SEIU put into politics and lobbying in 2008, the union seems able to drum up hearings against its enemies on a regular basis.
SEIU has made no secret of its hostility towards Bank of America, accusing (with little real evidence) the bank of discriminating against workers, reckless lending practices, and tax evasion. It has filed numerous shareholder resolutions to embarrass the bank and its management.
But SEIU doesn't target companies at random, or even in the pursuit of good public policy. Instead the vitriol against Bank of America is intended to further its objective of recruiting the bank's employees as new union members.
There could, of course, be another motivation behind SEIU's desire to take down the bank. According to its financial disclosure forms, SEIU owes Bank of America nearly $90 million. Perhaps they're hoping for better repayment terms?