NEW YORK (Reuters) - Former Merrill Lynch chief executive John Thain defended the acquisition of the brokerage by Bank of America Corp and said the bank knew of Merrill's losses and bonuses before the merger closed.

In a memo to Merrill employees, Thain also said he plans to reimburse Bank of America for $1.2 million spent to renovate his office a year ago, calling the expense "a mistake in the light of the world we live in today".

The renovation expenses, including a reported $35,115 commode and a $1,405 trash can, have become became the latest symbols of corporate excess. News of the expenses surfaced on January 22, the same day Thain was ousted as Bank of America's head of global banking, securities and wealth management, and just three weeks after the $19.4 billion merger closed.

Still, Thain's insistence that Bank of America knew the extent of Merrill's condition put added pressure on Bank of America CEO Kenneth Lewis, who has been criticised over the bank's falling share price, and increasing speculation about his future.

Bank of America has been hit with several lawsuits over its failure in December to disclose Merrill losses and talks with the US Treasury Department, which led to a $20 billion capital infusion from the government.

The Charlotte, North Carolina-based bank said on January 16 that Merrill lost $15.31 billion in the fourth quarter. Shares were down 82 percent from September 15, when the merger was announced, through Friday.