Andrew Cuomo won his second Chutzpah of the Week award (with positive connotation) for the subpoenas he issued to John Thain (formerly Chief Executive Officer of Merrill Lynch) and J. Steele Alphin (Chief Administrative Officer of Bank of America, which now owns Merrill Lynch) as part of his investigation of the (shall we insert "obscene" here?) bonuses paid to Merrill Lynch executives just before the acquisition by Bank of America. This investigation has now led to the case of Cuomo v. Thain being heard before the New York State Supreme Court in Manhattan (Case Number 400381/09); so it seems fair now to present a Chutzpah of the Week award to Bank of America for its current strategy for pushing back against Cuomo's prosecution. As Reuters reported this morning:
Bank of America Corp (BAC.N) said it could suffer "grave harm" if it is forced to reveal data about an estimated $3.6 billion of bonuses paid to Merrill Lynch & Co officials in the days before the bank acquired the brokerage.
In a petition filed late Wednesday in a New York state court in Manhattan, the bank urged Justice Bernard Fried to reject New York Attorney General Andrew Cuomo's demand for the data, which the bank believes should be kept confidential.
The report also elaborated on what constituted that "grave harm" to Bank of America:
Bank of America said revealing the data could help rivals poach talent, prompt employees to leave because their privacy was violated, cause "internal dissension and consternation," increase security risks for bonus recipients, and give rivals a better idea of which businesses it considers most valuable.
Do this issues carry any weight? That decision can only rest with Judge Fried. I actually do not know to what extent the judge will be influenced by Cuomo's motives, which I saw as the primary justification for his chutzpah award:
I can think of no better way to throw a harsh bright light on the failure of the banking sector to provide the Government Accountability Office with the data necessary to monitor the bailout money they have received than to launch an investigation of a particularly egregious use of that money.
It seems to me that, if this case is ultimately about abusive practices with government money, then a verdict that acknowledges those practices will do far more harm than any of the issues Bank of America cited. Cuomo is appealing to the need for accountability, and I suspect that support for his intentions now go all the way up to the White House. Outside of the objective arena of the New York State Supreme Court, who is there to speak for the defendant other than the corporate voice of Bank of America; and will the American public, stuck with paying the bill for this bailout, find that voice persuasive?