Another TARP contract, more secrecy

The Treasury Department has hired the law firm of Thacher Proffitt & Wood LLP to advise it on purchases of asset-backed securities.

Once again, the contract that the Treasury Department posted on its web site conceals the hourly rate that the government is paying Thacher Proffitt's lawyers, and omits most other information about the financial terms of the deal.

The Treasury Department said the total amount of taxpayer money the law firm will receive over the six-month term of the agreement is not expected to exceed $500,000.

The text of the agreement posted with the press release says the minimum number of attorney hours covered by the contract is 100, and the maximum number is 1,300. The Treasury Department whited out the hourly rates it will pay for the services of Thacher Proffitt's partners and associates. The document also makes no mention of what the government might be paying for other services provided by the firm.

The Treasury Department has previously blacked out or redacted the hourly rates it agreed to pay three other law firms that are advising it on other aspects of the $700 billion Troubled Asset Relief Program. Those contracts are worth roughly $11.3 million.

Thacher Proffitt is to advise the Treasury Department on any investments it makes through the Federal Reserves's Term Asset Backed Securities Loan Facility. The Federal Reserve announced Nov. 25 that it would lend up to $200 billion to holders of certain asset backed securities tied to new consumer and small-business loans.

Thacher Proffitt is one of the leading law firms in the asset-backed and mortgage-backed securities market. Its fortunes have declined, however, as those markets have contracted. The firm has reduced its legal staff by nearly a third since the fall of 2007.

Thacher Proffitt's clients have included Citigroup Inc., Goldman Sachs Group Inc. and other financial companies that have received billions in new capital from the Treasury Department through its stock purchase program. The firm also represented Bear Stearns Cos. in its Federal Reserve-assisted sale to JPMorgan Chase & Co.