11/16/2009-In a strange twist of fate, US investigators are now looking into evidence that could indicate Bank of America (NYSE:BAC) having "strong-armed Uncle Same into ponying up billions in taxpayer support," according to a report from the New York Post.

The report suggested that BofA, which is currently searching for a new CEO, used the Merrill Lynch merger as leverage in order to "squeeze the government," for support instead of out right requesting aid, in an effort to save face in front of angry shareholders over a $29-a-share merger with Merrill.

The documents, which the NYP said it reviewed, are "further evidence BofA knew it did not have a basis for claiming a "material adverse change" (MAC) clause that would let it walk away from the merger."

Apparently, BofA went against its own legal counsel's advise when it claimed it would cancel its merger with Merrill.

When BofA's in-house general counsel, Tim Mayopoulos, spoke up and said that there was no legal basis for a merger termination he was replaced only nine days later by Brian Moynihan.

In June, BofA's previous CEO Ken Lewis told Congress that former Treasury Secretary Paulson and Fed Chairman Bernanke pressured him into completing the merger with Merrill after it contemplated canceling the merger amid mounting losses.

Contact Chip Brian

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