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Cuomo's Thain investigation

From NBC's Jeff Rossen
There are new problems for former Merrill Lynch CEO John Thain -- this time, legal ones after a "heated" closed-door meeting between Thain and New York State investigators.

New York State Attorney General Andrew Cuomo has filed court papers forcing Thain to speak candidly about $3-to-$4 billion dollars in bonuses handed out just before the merger with Bank of America.

According to sources, during his deposition Thain admits that Bank of America knew everything he was up to. But Thain reportedly refused to name names. He wouldn't go into specifics about who got the money. Investigators say they filed today's motion for two reasons: (1) Force Thain to speak openly, and under oath, and (2) Send a warning to Bank of America, and other banks -- that anything short of full transparency is unacceptable.

This headline-grabber is just the latest in a string of high-profile investigations for Cuomo. There are politics at play here. Cuomo is considering a run for governor in 2010. Recently, Cuomo exposed a health-care scheme costing millions of Americans, hundreds of millions of dollars. As a result of that investigation, United Health Group settled with Cuomo's office and agreed to reimburse people affected.

It's unclear when a judge could rule on this latest motion involving John Thain.

After the jump is an excerpt from the deposition between one of the investigators, Thain ("witness") and Thain's attorney. (See above links for full complaint deposition):

MR. LAWSKY (NYS investigator): who do you remember of those people?

MR. LEVANDER (Thain attorney): I've been directed not to disclose by the company individual names other than the names of the top people who are under Section 16. we were directed by Bank of America counsel. If you want to get on the phone with Mr. Liman --

MR. LAWSKY: If you don't want to tell us the names, you can just say "I don't want to tell you the names."

MR. LEVANDER: He has no problem telling the names. We were directed by counsel for Bank of America, and I'm following that direction.

MR. LAWSKY: I'm asking, DO you want to give us the names?

MR. LEVANDER: He's given you the category

MR. LAWSKY: I'm not asking you for the numbers that people got. I'm asking who Andrea Smith asked numbers to come down for. Are you telling me Bank of America doesn't want you to disclose that?

MR. LEVANDER: That's my understanding, but I'll tell you what. At the next break I'll try to find out if that's what the direction was.

MR. LAWSKY: Let the record reflect the witness is refusing to answer.

MR. LEVANDER: At direction of counsel -at the direction of Bank of America's counsel.

MR. LAWSKY: I'm not calling Mr. Liman because it's your deal with him, but if you can work that out it would be great.

(Exhibit 4 was marked for identification.)

Q. I'm handing you what's been marked as Exhibit

MR. LAWSKY: Let me follow up with one thing: was it your understanding that Miss smith was speaking with, if you know, with Mr. Alfin regularly based on your conversations with her?

THE WITNESS: It was was my understanding.

MR. LAWSKY: How about Mr. Lewis?

THE WITNESS: I don't know.

Q. DO you know anyone who had the title Executive vice president regardless of whether it fits into the definition of whatever is being talked about in Exhibit 5? Anyone you worked with until December 2008 that had the title at Merrill Lynch, Executive vice president?

A. I believe that

MR. LEVANDER: Don't guess, only what you know

A. well, I don't recall who has that title.

MR. LAWSKY: Can we go back to my Andrea smith question now?

MR. LEVANDER: Yes. I've been told that counsel for the company has taken your request under advisement and is consulting with his client. At the moment, I'm directed to not read individuals' names into the --

MR. LAWSKY: under what grounds? Are you asserting a privilege? Does Mr. Thain work for Bank of America? I don't think he does.

MR. LEVANDER: That's correct. But there are confidentiality obligations. I don't want to be in a position of getting shot at. If you and Mr. Liman can get it worked out, I sure will be happy to give you the information.

MR. LAWSKY: I have nothing to work out with Mr. Liman. I feel bad for you because you're getting caught in between this. I just -- we're going to end up back here doing this all over again.

MR. LEVANDER: Maybe yes, maybe no. Maybe I'll tell you, The three names are x.

MR. LAWSKY: All I can say to you is that this is a relevant question for an ongoing investigation that we need an answer to. We don't need an answer over the phone; we need an answer on the record. I don't want to get into motions to compel and contempt of -- I don't even know what we would do. But I've never heard of a witness refusing to answer because an employer who fired him is directing him not to answer for non-privileged reasons.

MR. LEVANDER: If you want to have a discussion on the record, we can have the discussion on the record. The witness is here to answer questions. AS you said, it's not his fault, and so I suggest we go on. But I don't want to have him sued by the company for their saying that he's violating someone's privacy --I don't knpw what Mr. Liman's objections are. All I know is, he's given me a direction. Mr. Thain has confidentiality obligations even though he's an ex-employee. Those exist. Therefore, let's go on.

MR. LAWSKY: Let me try to understand a few things. Have you entered into any type of severance agreement with Bank of America.

THE WITNESS: I have not.

MR. LAWSKY: So with respect to -- earlier, were you, in fact, asked to leave? IS that the correct characterization?


MR. LAWSKY: Post departure, has there been any -- even if not in writing -- any sort of agreements or joint agreements or any kind of cooperation agreement with Bank of America?

THE WITNESS: Not with me.