The new General Accountability Office report on the Treasury Department's administration of its $700 billion financial-industry rescue plan is long on broad assertions and short on detailed information.
But the document does provide specifics on the amount of money that certain contractors have received, or stand to receive, through the program.
According to the report, the two law firms assisting the Treasury Department with its capital investments in banks and other financial institutions were paid nearly $2.8 million for their first four weeks of work.
The Treasury Department said last month that its contracts with Hughes, Hubbard & Reed LLP of New York and Squire, Sanders & Dempsey LLP of Cleveland would be worth $5.5 million per firm for their initial six-month term.
The General Accountability Office reported that Hughes Hubbard was paid $1,411,300 through Nov. 25, while Squire Sanders received $1,380,000. Its summary did not say what hourly rates the firms were charging, or provide any other information about how their compensation was determined.
When the Treasury Department announced the contracts early last month, it redacted information on the financial terms from the copies it posted on its web site. BailoutSleuth filed a request for the full details of the agreements under the federal Freedom of Information Act. We were notified last week that the Treasury Department wants more information from us before it can process our request.
The GAO report said that the Treasury Department had contracted for $492,007 worth of services from Ernst & Young, which was hired last month to provide general accounting and consulting on the $700 billion Troubled Asset Relief Program. The watchdog agency said the Treasury Department had contracted for $191,469 in services from PricewaterhouseCoopers LLP, hired to provide internal controls for the program.
Both of those figures match the dollar amounts that the Treasury Department reported when it announced the contracts. Like the legal-services agreements, the contracts for accounting services posted on the Treasury Department's web site had numerous redactions.
The GAO also noted that Lindholm & Associates Inc., of Owings, Md., was awarded a human-resources support contract by the Treasury Department worth $174,720 for the initial term of six months, and $710,528 if all extension options were exercised.
The Treasury Department did not put out a press release on that contract, but Neel Kashkari, the agency's bailout czar, mentioned it in a public appearance on Nov. 10.
The GAO said in its report that 48 people had been assigned to the Troubled Asset Relief Program as of Nov. 21, including personnel from other Treasury Department offices and other federal agencies. It said that count included five permanent hires. The GAO said the program may eventually require the equivalent of 200 full-time workers.
So lets see in 4 weeks each firm has been paid $1.4 million and their 6 month contracts will pay them each $5.5 million. They are responsible for handling the transactions between the Treasury Department and the financial institutions. Once the first agreement was drafted and approved by the Treasury department that should have been the legal documentation used for all institutions. After the first creation go in and change the name of the institution and the numbers and presto you have a new document. Once again government waste!