US Rep. to BofA: Turn Over Lawyers’ Merrill Merger Advice by Noon Monday

The chairman of a House committee has told Bank of America the attorney-client privilege doesn’t apply when dealing with Congress, and the bank must disclose lawyers’ advice on its merger with Merrill Lynch by noon Monday.

U.S. Rep. Edolphus Towns, D-N.Y., the chairman of the Committee on Oversight and Government Reform, imposed the Monday deadline “in a sternly worded letter,” the New York Times reports. Towns wants to know when Bank of America became aware of Merrill losses, when it learned of a second infusion of government bailout money, and what lawyers told management about the need to disclose those developments, the story says.

If the bank turns over the information, it could affect two pending actions. One is a lawsuit by the Securities and Exchange Commission focusing on failure to disclose plans to pay bonuses to Merrill executives. The second is an investigation by New York Attorney General Mario Cuomo into surprise losses at Merrill.

In the SEC suit, U.S. District Judge Jed Rakoff refused to approve a $33 million settlement between Bank of America and the Securities and Exchange Commission. Rakoff questioned why shareholders should be penalized for management actions that were apparently taken because of legal advice.

WilmerHale represents Bank of America. It has acknowledged that Congress has the authority to override attorney-client privilege, but doing so would set a bad precedent, the Post says. The bank has asked for additional time to respond.