Aha! So someone else IS wondering: "What Does WikiLeaks have on Bank of America?"

by Ken

As we know, WikiLeaks's Julian Assange has indicated that his organization is sitting on a pile of unspecified documents which they're prepared to release in the even that, well, anything happens to him -- or should I say "is done" to him? From separate reports it is also said that WikiLeaks is in possession of a hard drive that formerly belonged to a Bank of America executive, presumably chock full of incriminating stuff. Put the two together, and it is generally presumed that Assange has B of A in his crosshairs.

B of A certainly thinks so. I commented on a NYT report ("Facing Threat From WikiLeaks, Bank Plays Defense") on the massive internal-security campaign the bank has undertaken to try to protect itself, principally by identifying any possible source of leaks within its organization. There was a sort of suggestion that if they can't find any, then they're OK, but they sure aren't behaving like a company that thinks there's a chance it might be OK.

Still, what really threw me about the NYT account was its total lack of curiosity about what kinds of stuff WikiLeaks might be sitting on. "I mean," as I wrote at the time, "isn't that what we're all wondering?"

I can think of four theories to explain this:

(1) The only reason BoA is so freaked is that in a company that size, there are bound to be documents that, ripped out of context, can be made to look incriminating, however innocent or explicable. Therefore the key is trying to ascertain whether there is in fact a leak and then, you know, sort of deal with it, somehow.

(2) BoA has concerns about the contents of the hypothetical documents, but the condition of the NYT reporter's access to its team was that he not talk about stuff they don't want him to talk about.

(3) The BoA high command has some pretty good ideas of what could be among the documents, and is scared shitless.

(4) If you look into the inner workings of BoA, there's so much potentially damaging crud that the high command scarcely knows where to begin being afraid.

I'm sure that most Village types gravitate to (1). I don't entertain this for a moment. It would be pretty shameful to contemplate (2), but I don't rule it out. Maybe it's my suspicious nature, especially where a behemoth like BoA is concerned (I have my petty but well-founded grievances against it, but this isn't the place to go into that), I just assume we're dealing with either (3) or (4). So I entertain the fantasy that some high-level BoA moguls are going to be doing time.

It turns out that, as I imagined, I'm not the only one who's been wondering about this. Via AlterNet, I see that Center for Media and Democracy's Mary Bottari, director of the center's Real Economy Project and editor of the www.BanksterUsa.org site, is wondering out loud: "What Does WikiLeaks Have on Bank of America?"

Legal Liability for Toxic Mortgages

BofA is already under the gun, defending itself from multiple lawsuits from private investors as well as Fannie and Freddie demanding that the bank buy back billions worth of toxic mortgages-backed securities. The firm stopped issuing subprime mortgages in 2001, but it kept underwriting subprime mortgage-backed securities for many years. In September 2009, for example, BofA underwrote $239 million worth of securities backed by subprime loans. BofA has reserved $4.4 billion for these "put back" lawsuits. If Assange has emails showing that top executives at BofA knew they were peddling toxic dreck to investors, it would rock the firm and give tremendous ammunition to the army of lawyers already knocking on BofA's door.

Reckless and Illegal Foreclosures

BofA is at the heart of the robo-signing scandal and has wrongfully foreclosed on countless American families. One poor woman returned to a vacation home to find it locked, all her possessions gone -- including the ashes of her late husband. How could such a mistake be made? A BofA employee deposed in February 2010 said that she signed as many as 8,000 foreclosure documents a month without reviewing them, in violation of the law. Mounting questions about the fraudulent and illegal foreclosure practices at the big banks and mortgage service companies prompted BofA to temporarily halt foreclosures nationwide in October 2010. If Wikileaks can document that top BofA officials have a callous disregard for legal processes and constitutionally protected property rights, BofA's mounting legal liability may not be sustainable.

Countrywide Headaches

In 2008, BofA acquired Countrywide, one of the most aggressive and fraudulent lenders during the housing bubble. The result has been a trainwreck of liability and lawsuits for the megabank that now has over 1.3 million customers in foreclosure. To settle the lawsuits with Illinois, California and eight other states over predatory lending, BofA came up with an $8.4 billion loan relief plan for those holding Countrywide mortgages. In June, 2010 BofA paid $108 million to settle a Federal Trade Commission case that charged Countrywide with having extracted excessive fees out of borrowers facing foreclosure. BofA paid $600 million in August 2010 to settle shareholder claims that Countrywide had concealed the riskiness of its lending standards. There is no end in sight for these suits. In June 2010 the State of Illinois sued Countrywide again, this time over racial discrimination in its lending practices. Wikileaks could have further documentation of Countrywide's illegal and reckless underwriting practices or ongoing fraud at BofA.

Taxpayer Paid Bonuses

BofA acquired the brokerage firm Merrill Lynch for $50 billion in January 2009. The U.S. government blessed the merger with a $20 billion bailout loan to aid BofA. After the acquisition went through, it was revealed that Merrill Lynch had lost $15.8 billion in the last quarter of 2008 and that $3.6 billion in bonuses were paid ahead of schedule to top executives at Merrill. Among beneficiaries of the bonus bonanza was Merrill's CEO John Thain, who famously spent a million redecorating his office at the height of the crisis. About the deal New York Attorney General Andrew Cuomo said: "One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding." If Wikileaks has emails showing top executives knowingly used bailout bucks for bonuses, this ugly chapter in history could be reopened, prompting Congressional investigations and further bailout backlash.

Still Too Big To Fail

In addition to the $25 billion in TARP bailout money and the $20 billion for purchasing Merrill, America recently learned of the extraordinary actions taken by the Federal Reserve to prop up BofA at the height of the crisis, details that were kept secret from the public. When the Fed was forced to release data about its emergency loan programs in December 2010, we found that BofA tapped an estimated $931 billion from the Fed in short term loans and government subsidies. If Wikileaks has information showing that America's biggest bank is only being kept alive by accounting tricks and ongoing government subsidies, the result could be another government bailout. Or is it possible we might see the first orderly dissolution of a of a "too big to fail" under the new Wall Street reform law?

"We Don't Suck"

BofA doesn't just want you to know that their CEO Brian Moynihan doesn't suck, they want you to know that their top staff does not suck either. The bank has started buying damaging domain names for a long list of executives, prompting many to wonder: just what have those executives been up to over there at BofA?

As a rational commentator, Mary B is approaching the question of what WikiLeaks has on Bank of America from the standpoint of my option (3), "The BoA high command has some pretty good ideas of what could be among the documents, and is scared shitless." This may still be the case, but somehow even if you put all these things together, they don't seem to me to add up to B of A execs lying sleepless and shivering in their beds at night.

Naturally it's possible that when they fantasize about the headlines the international media will be trumpeting after WikiLeaks makes this much-feared docudrop, they really do have specific things in their terror fantasies, things we really can't guess at from available information. Or it may be that the truth is my option (4): the B of A high command itself knows, or fears, that the potential for incrimination lurking among its innards is so vast that the commanders themselves can scarcely imagine what those headlines will be blaring.

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