Despite denials, Feds knew of Merrill bonuses.

SEC says it informed the Fed and Treasury of the bonuses as early as Dec. 17. This directly contradicts Paulson and Bernanke's oral and written testimony.

The Oversight and Government Reform Committee committee's top Republican, Rep. Darrell Issa (R-Calif.), is demanding an explanation from Mr. Bernanke and Mr. Paulson.

"It is now apparent that you knew, or at least should have known, about the bonus payments to Merrill Lynch employees no later than December 18, 2008," Issa said in letters sent last week to Mr. Paulson and Mr. Bernanke.