IG Says Feds Paid Major Law Fims Millions Based on Bills That Didn't Describe TARP Work Done
In a blistering report (PDF) this week, a special inspector general for the Troubled Asset Relief Program says major law firms were paid millions by the U.S. Treasury Department based on bills that provided little or no explanation of the work that was done.
Although it stopped short of saying that the law firms should definitely pay the money back, the report called for the government to “specifically determine the allowability” of $5.8 million in fees for Simpson Thacher & Bartlett; $2 million for Cadwalader Wickersham & Taft; and smaller amounts for two other well-known law firms, reports the Blog of Legal Times.
In response, a Treasury official said the department was more concerned, in the midst of the 2008 financial crisis, about saving world markets from a disastrous downturn than worrying about billing details for legal fees. “Our entire economy was on the verge of a catastrophic collapse, markets had ceased to function, and almost every major financial institution was at risk of failure,” wrote Timothy Massad, an assistant secretary for financial stability, in a letter included in the report.
The department also emphasized that it was aware of what the law firms were doing, because government employees and law firm personnel were working side by side.
Related coverage:
ABAJournal.com (April 2011): “TARP Watchdog Questions Vague Billings by Venable, Other BigLaw Firms”
