this mac clause is invoked? >> i mentioned that i need a license with whether he said could or would, but basically the premise was the management and the board would be removed if in fact we did -- >> including yourself? >> correct. >> so if the suggestion from the federal government was have your job removed as well as the board of directors, can it be looked at any other way other than a threat? >> well, actually, we didn't -- we didn't actually re -- have much of reaction to the comments themselves as it related to us being removed. again, what impressed us was here was the government telling a bank in good standing that they would do something like this. so it was the seriousness with

which -- the seriousness of it which caused us to believe that they really did believe that there was an issue here with the mac and not calling it, that did influence us. but it wasn't the threat to have us lose our jobs. it was the seriousness -- it was because they made it, not the threat itself. >> i'm sorry. i didn't catch the last part. >> it was the seriousness with which they made it, not the threat itself. >> tell me about your discussion. you call at one points as i'm looking at the time line here and mr. paulson is taking a bike ride, i guess on december 2 1st. tell me specifically what was going on in that conversation. >> well, i called in to get an update and i think that was the sunday -- i'm pretty sure that

was the sunday i called him. and as i recall the conversation, he said i want to give you some blunt language and i first want to start out by saying we're very supportive of bank of america. then went one step further and said what i've already said that -- >> he said, but, we feel very strongly you should not call the mac and if in fact you do, and again, i think he said would -- but it was would or could, as i recall -- and remove the board and management. >> that certainly sounds like a threat to me and an amazing use of power there. tell me about your interactions with timothy geithner. how early in the process was he engaged in this process? >> i had no -- after the

confirmation hearings or once he excused himself from the new york fed, i had no contact with mr. geithner. >> but he was involved before he was named and brought in as the treasury secretary, correct? >> he had been involved in the original t.a.r.p. money, yes. >> right. and tell me about mr. summers, the intersection and place of involvement that he had with the project. >> i personally had no involvement with mr. summers. mr. chairman, i would ask that mr. price's notes from december 2 1st of 2008 and mr. lewis's notes also be entered into the record. >> without objection. >> thank you. >> so ordered. >> tell me about the interaction you continued to have in -- with mr. bernanke and mr. geithner at

this point? >> well, i've had very little conversation with -- in fact, i can't recall of a conversation i've had with mr. bernanke in terms of being one on one. i remember council called the federal reserve advisory council and we -- there were 12 of us and we have dialogue with federal reserve, including mr. bernanke in a group setting. >> any interaction with the administration -- >> gentleman from utah, your time has expired. >> my apologies. >> now yield to the gentleman from maryland, mr. cummings. >> mr. lewis, i've listened to your testimony very carefully and you know, i understand and read about you're a great man.

i think one of things you have tried to do today is to walk a very thin line. you just heard republicans and democrats say to some degree that whatever was said to you about losing your job and the board being dismissed, basically what we've said is i don't buy it. let me -- i assume the minutes are accurate from your board meetings. these things you vote on. the minutes from board meetings -- >> yes,sir, we do -- >> i'm talking about december 22nd, 2008. >> let me read something to you. it says, you've apparently -- mr. lewis reported a series of calls. and you talk about a number of things. this is one thing i found interesting. the second point. this says -- this is what you told your boys, it says the treasury and fed stated strongly

that were the corporation to invoke the material adverse change mac clause in the merger agreement with merrill lynch and fail to close the transaction, the treasury and the fed would remove the board and management of the corporation. if that isn't a threat, i don't know what is. if i say i'm going to fire you, if you don't do what i tell you to do, not only am i going to fire you, but i'm going to fire your board, what you said -- and i know you were caught in a difficult situation. i know that after this merger was done your folks benefited tremendously and i know that bank of america is doing fine now. i'm here to tell you, no matter how great bank of america is doing today, the end does not -- the means does not justify the end.

in other words, throughout these transactions we must have honesty and integrity and transparency, period. what i'm saying to you is -- i know you're trying to be nice but here we've got a situation where apparently mr. paulson has told you, do it. so like the nike commercial, just do it. then you come in here trying to tell us, oh, no, i was worried, the sky was falling. i'm just -- i was so upset. i was just -- and we don't buy it. so i'm going to give you another chance. you didn't feel threatened? >> well -- >> don't get us to describe it. we're trying to figure out what you were feeling. we want to know because we want to straighten out this mess. >> i have -- i've been pretty consistent as you've just

described it as it happened. >> maybe you need to be inconsistent and tell us how you felt. >> i did as i think i have said at some point in time, maybe not today, it was a strong influence on my decision but wasn't the only influence. >> i understand. so apparently -- okay. let me ask you this. did mr. bernanke have any influence with regard -- i understand you just answered the question. did he ever say that you should not disclose certain information and do the deal? did that ever come to you in any kind of way from bernanke? >> no sir. well, the -- he never said we should not disclose anything that was discloseable, that would be our decision and i never heard from him on the issue of us not disclosing something.

>> anything else -- look like you're trying to go somewhere. >> the second piece i thought you asked me, sir, was the issue of him not wanting us to call the mac and he did express that to us. >> when did he do that? >> he expressed it on more than one occasion. i don't remember which dates but several dates. if you are an experienced man, i understand you have great judgment, apparently when you thought about this mac thing, it was based upon your own experiences, was it not? yes, sir. >> what were you thinking? >> i was thinking that the losses had accelerated to a point that they were out of line with other institutions and our institution. >> so you still -- if you were to go back, you would thing there was not a mac situation? >> i can't say that there wasn't a mac because we never called it so we just don't know.

>> very well. >> if the gentleman would yield for a moment. >> my time is up. >> the gentleman's time is expired. i now yield to congressman flake from arizona for five minutes. >> thank you, mr. chairman. i just want to share my colleague's skepticism about whether or not this was a threat. it seems completely inkred you house this wouldn't be considered a threat. if this wouldn't be considered a threat, if i could ask you, what would be considered a threat? kidnap the family dog? release your college gpa scores, what is a threat if this is not a threat? >> i'm just trying to describe the circumstances and not put one word to it myself.

>> this -- >> it seems from this vantage point, it seems there's sort of a kind of a stockholm syndrome here, you're still regulated by these entities and it seems you've identified with your cap tors or regulators in some ways here but we would like to have a candid answer here. and i don't know if you can wiggle your pinky finger or give us some sign that nobody else will see, it just -- the big grin, maybe that gives it away. let me tell you from this v vantage point it seems difficult to accept that that would not seem threatening behavior. again, from the notes, i believe mr. price, the cfo took during one of these meetings,

identifies hank p, fire board if you do it, invoke the mac. responsible for the country. tim g. agrees. i mean it just seems like there's no other explanation here. and i can understand maybe from the smile and what not that you agree but can't say it here. but let me just say, if you learned later on that there was a 12 billion in losses that you didn't know about. it wasn't so much what they said but how they said it, the seriousness of which they explained the need for you to move forward with this merger, if not 12 billion, wheres the threshold that you would have said can't do it? can you enlighten us there a

bit? >> i can't. because i dealt with the circumstances and i don't know -- what caused that to happen, to your point even if you -- whatever you want to call it, i wouldn't change how i described it. i'll let you put the word to whether it is a threat or whatever, but the circumstances that i described remain the same. >> how compelling was the seriousness of that conversation? would it have compelled you if the losses were twice as big as you didn't understand that they were for 24 billion instead of 12? >> at some point you couldn't have made it that deal. at some point a number that you -- the hole would have been just too big. >> if the taxpayers back fell, 24 just as easy as 12?

>> no sir, because you would all of a sudden -- this is 8% after tax dividends that you're paying. at some point you couldn't bear the burden of that kind of cash flow drain. >> the 12 billion was within the range? >> it was painful and it caused us to have to push out our horizon in terms of the deal to work, but it is workable. >> mr. flake, i would yield to the gentleman -- >> i would like to associate myself with your comments and the gentleman from maryland where you are a little inkredhouse when it was stated before the new york attorney general, the gentlemen was threatened. we are oddly enough arguing over when you're threatened you, you feel threatened, but not whether or not there is a threat. we made that pretty clear and i appreciate your sticking to

>> you can watch this nearing its entire tained find related information by visiting our website c-span.org. next on c-span, house and senate conferees work on a bill to fund wars in iraq and afghanistan and then we'll show you ken lewis' full testimony from thursday's house oversight hearing and then later it is "washington journal" live with your phone calls. >> tomorrow morning on "washington journal" we'll have ramesh ponnuru and jon meacham

and george will and "face the nation" host bob schieffer. >> the government funding of college, direct aid to college and their students really a late 1950's, early 1960's thing. >> today not ovepb government-backed student loans are permitted. >> title four of the higher education act is 400-roughly pages lodge. we have a lawyer here in town who tries to keep the government from giving us money and once asked him to send me title four. he said i wouldn't be able to read it. >> sunday night at 8:00 on c-span "q & a."

>> how is c-span funded? >> private donations? >> taxpayers. >> i don't really know. >> from public television. >> donations. >> i don't know where the money comes from. >> federal aid? >> contributions from donors. >> how is c-span funded? 30 years ago america's cable companies created c-span as a public service. a private business initiative. no government mandate. no government money. >> on thursday, house and senate members met to hammer out the details of nearly $100 billion in supplemental spending mostly for the wars in iraq and afghanistan. one issue at contention, the releasing photos of military detainees. this is an hour and a half.

>> we still don't have a room that is better to meet in a conference than h-c five. what a wonderful use of resources and planning went into that. having gotten rid of my frustrations for the day, [laughter] i thought that would take a moment to manifest itself. let me simply say that we're here to deal with the -- in the form of a supplemental with the last of the leftovers plus

whatever other items are being attached along the way. i'm perfectly willing to forego my 20-minute opening statement in the hope that other also do the same so that we can get right to the business. so having said that, let me call on senator inuey first and mr. lewis and mr. cochran and see how fast we can gets there. >> chairman, i thank you very much. i agree with you that going over the words long enough, it is time for work. this is a compromised package that both sides have worked on. none of us got everything we want. that is not in the nature of it. and i just want to thank you for the many courtesies. people have been telling me this guy is a tough nut to crack.

>> emphasis on the nut. [laughter] br but i must say it has been a pleasure working with you, sir. >> i feel the same about you. >> and if i may, like you, i have a 20-minute statement. thank you very much. >> mr. lewis. >> thank you very much, mr. chairman. we have been talking a little bit about this bill because there are some questions that i have. i may very well express some of those questions by way of my statement if you'll be a bit patient with me. but in the meantime i'm very pleased that we have at least temporarily returned to regular order removing this supplemental that is before us. i must confess to being disappointed at the final

product that has taken place as compared to where we began with when the house passed its bill. it appears that the majority has chosen over here, has chosen to go the higher dollar level for every account in this conference report except as it relates to the primary purpose of the legislation, a critical troop funding in the department of defense and military construction sections. my understanding of the final agreement is that it cuts the house level for d.o.d. and by $4.6 billion. more or somewhat disconcerting is that the final package includes $5 billion for i.m.f. funding that was not a part of the original house package and that will go to many countries who are less than friendly to the united states. that is a great dorn the sizable number of members at least in my own conference. this $5 billion in funding for

the i.m.f. will secure a whopping $108 billion in loans. in essence the i.m.f. would be funded at a level almost $30 billion more than what is provided for in the bill for our troops. what began as a troop funding bill, indeed has begun a means of full milling the president's promise. provide more i.m.f. funding for international bailouts. if that that isn't bad enough, it would also include a billion in emergency spending for what is called cash for clunkers, a program that was not part of either the house or senate package, no was it requested by the president. the conference appears to have dropped the graham-lieberman-mccain language relating to the recent detainee photos. it is also my understanding the countries have watered down

language relating to the release or training at gun and moe. we know the difficulty in commitment that the president has made in commitment to guantanamo. there have been problems implementing his commitment. i'm not sure of anybody who has real answers how we get through that. the earlier this week the president approved having a guantanamo detainee transfered to new york city. it is my understanding that that individual is at a facility somewhere around manhattan and there are some serious questions about this security of that facility. just an inkling of some of the difficulties we have as we go forward. i don't know how the courts are going to handle that case as we go forward in new york. the courts and justice department have been known to do strange things from time to time. just this morning the president ordered the relief of four

uighers to bermuda. part of the british empire. it would appear i understand that took place without any discussion with the chinese and the chinese are just a bit upset about this and it could lead to a tre trades problem between those two problems because of the circumstance. the president appears to be racing to move these detainees before congress should enact anything into law including this bill but indeed, the uigher problem is a reflection to have guilty of the guantanamo commitment. my house colleagues would like to be recognized to offer three motions. the first will insist upon the higher house funding level for d.o.d. this second motion would insist on agreeing to section 202-amp and section 315 to have senate

bill prohibiting the transfer release of guantanamo detainees and the third and final mosquitoes will seek approval of the part will seek approval. much has been made about the costs. i note for the record that the final conference agreement is $106 billion which is $14 billion more than the president's request. $9 billion more than house-passed level and $15 billion more than the senate-passed level. let's not pretend that we're concerned about the total cost of this package. arguments about maintaining some level of fiscal responsibility ring hollow when we lard up a bill to support foreign aid for hostile governments and cash for cars pease their prime.

in closing -- past their prime. it is a shame that a process that began in a spirit of bipartisan in the house has concluded in this-mile-an-hour. and i must say, -- concluded in this-mile-an-hour. -- manner. i must say considerable lefrls of ongoing communication, that sort of regular order is just not the way professionally the place ought to be handled. it certainly expedites our process and appreciate recognition and yield back my time. >> mr. chairman , i'm very ploozed that we're meeting today -- pleased today that we're meeting today to supply the supplemental. resources for me and women military forces and do so in a timely manner. or take other inefficient actions to support our troops. it is a positive sign, i think that we're meeting as a conference committee in the

regular order and i hope we will continue to resolve differences between the house and senate on the individual f.y. 2010 appropriations bill. as a general matter i think the agreement represents a fair compromise between the house and senate positions. i regret that some provisions that were in neither bill have apparently been added to the conference agreement and without casting judgment on whether the so-called cash for clunkers movement is good policy, it is that you have the a new $1 billion program is being created without any opportunity for debate or amendment in the senate. i know there are two members of this conference. senators collins and feinstein who had helped to offer an alternative proposal during senate considerations. i wish they and other senators could be afforded that opportunity. i'm also told there is other new legislation dealing with the federal retirement system that may or may not be the a part of

conference agreement. this is something we learned of only today. it apparently has significant impact on spending but we know virtually nothing about it. addition of these items makes the competition sflubble the senate and may jeopardy ties our efforts to fund the troops in a timely manner. there are may be other issues that we will discuss further today and the disposition of these issues such as guantanamo detainees, detainee photographs and funding if for the international monetary fund have all been difficult for the conference. i think the two distinguished chairman or their good faith efforts to reconcile the positions of the two bodies on these and other issues. [no audio]

>> i would like to comment on a portion of the bill that senator cochran referred to. we introduced a bill, the thought and goal of which was pretty simple and that was to encourage people to purchase more efficient automobiles with a voucher and that became known as cash for clunkers. this is something we have worked on for a long time. some of us that did the cafe bill in the senate thanks to senator inouey. we were able to achieve a ten mile over 10-year improvement of fuel efficiency in automobiles. it was a big victory because we began in this 1993 and hasn't been able to achieve any improvement in the cafe standard. the cash for clunkers bill, and mu