The headline report on Bank of America CEO Ken Lewis' testimony before congress on Thursday will be his claim that Paulson and Bernanke "pressured" him not to back out of the deal to buy Merrill Lynch.
But on an overt level Lewis did not give the Republican committee members exactly what they wanted. He has repeatedly stated that, in his view, the government was acting with "good intentions," that in effect, they had a good reason for their threat, which made it, somehow, not really a "threat."
He did say that Treasury Secretary Hank Paulson told him directly that if the Bank of America attempted to exercise a Material Adverse Change clause that would allow Bank of America to kill the deal, the consequences "could" or "would" be his removal as CEO and the firing of the Board of Directors.
And yet, bizarrely, he said several times that Paulson's hard line was not a "threat." Neither the Republicans or Democrats are buying that. I've rarely seen such a display of bipartisan unity. Jeff Flake, R-Arizona, even accused Lewis of suffering from Stockholm Syndrome, and identifying with his kidnappers.
The fine line that Lewis is trying to walk is his explanation that the non-threat threat made it clear to him just how serious the government believed the overall economic crisis was. And now he believes that when Paulson told him that withdrawing from the deal would be "irresponsible for the country" he might have been right. "It was seriousness with which they made it, not the threat itself," that impressed him, he said.
But maybe it's all another Kabuki play. As Flake was laughing in Lewis' face, Lewis had a broad smile on his own face -- as if he knew his explanation was ridiculous. So maybe the Republicans did get what they wanted.