Finance news

Herb Allison, nominated to run the Treasury’s office overseeing the U.S. financial rescue, owns $1 million to $5 million of stock in Bank of America Corp., one of the biggest federal aid recipients.

Allison is also paid about $3,600 a month from a Merrill Lynch & Co. annuity, the firm where he worked for almost three decades, and was later bought by Bank of America. He listed the payment and the stock investment on a financial disclosure form submitted to the U.S. Office of Government Ethics.

Nayyera Haq, a Treasury spokeswoman, said Allison will address potential ethics issues with his finances after a Senate vote to confirm him for the job.

“Mr. Allison will take any and all steps required to comply with financial conflict of interest rules, including divestitures where needed,” she said.

Allison, who goes before the Senate Banking Committee this week for a hearing to be assistant Treasury secretary for financial stability, most recently was the chief executive officer of Fannie Mae. His Wall Street ties may raise concern among some lawmakers considering his nomination to run the $700 billion Troubled Asset Relief Program.

Allison, as is customary for nominees, declined to comment before his confirmation, Haq said. He has been working at the Treasury since May 1 as a counselor to Secretary Timothy Geithner. He hasn’t made any policy decisions regarding TARP.

Aid Recipient

Bank of America has gotten $45 billion in capital injections from the Treasury. The government also agreed to a plan to guarantee $118 billion of assets against losses, an arrangement that the bank intends to exit.

Allison is likely to move quickly to divest his Bank of America shares once he wins confirmation, said Kevin Petrasic, a former official at the Office of Thrift Supervision who is now an attorney with the Paul, Hastings, Janofsky & Walker law firm in Washington.

“He will have to sell the stock just to avoid conflicts of interest,” Petrasic said. “The last thing you want to do is have anybody second guess you because of certain stock holdings fast cash advance.”

Merrill, where Allison rose from a junior employee to the top of the executive ranks, was purchased by Bank of America in January.

According to his disclosure form, Allison agreed to forfeit $250,000 to $500,000 of deferred compensation from Merrill upon his confirmation. He also is giving up stock options valued at $100,000 to $250,000 from Time Warner Inc., where he was a board member.

Director’s Fees

The media company paid him $78,180 in director’s fees for 2008 and part of 2009, according to the disclosure, which Allison signed April 28.

Allison was chosen by previous Treasury Secretary Henry Paulson to run Fannie Mae last September after the housing- finance company was put into government receivership. Allison will also keep some financial connections to Fannie Mae, the disclosure form said.

Fannie Mae is paying life insurance premiums for Allison for the next four years, he disclosed, valuing the policy as worth $1 million to $5 million. The company also paid him a $73,200 “relocation reimbursement,” according to the form.

The Treasury has given Fannie Mae $15.2 billion in assistance, and the company recently asked for another $19 billion.

It’s not clear what role Allison will have with Fannie Mae; the company is overseen by its own regulator, the Federal Housing Finance Agency. Allison took no salary while working at Fannie Mae.

The disclosure form says Allison will also continue to collect a monthly annuity payment of $94,709 from the Teachers Insurance and Annuity Association - College Retirement Equities Fund. He ran the investment firm from 2002 to 2008.

Allison, 65, is also participating in a TIAA-CREF deferred compensation plan that entitles him to $5.9 million in February 2010, $9.8 million in February 2011 and $2.2 million in February 2012, the form shows.

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