Legal Ethics
Want ‘Bailout Love’ from Treasury? Strict Conflicts Rules Apply
Posted Nov 7, 2008, 06:14 pm CST
By Martha Neil
Two law firms have to be happy about hefty contracts awarded by the U.S. Treasury Department in exchange for helping as many as 2,500 financial firms apply for a share of $750 billion being spent as part of a taxpayer-funded bailout plan.
However, there's one catch, reports the Am Law Daily. Hughes Hubbard & Reed and Squire Sanders & Dempsey have to comply with an onerous set of conflicts rules.
Described as "remarkable" and "unique" by Stephen Gillers of New York University School of Law, the conflicts rules require, among other provisions, that the two firms agree not to represent any financial institution from which the treasury department buys assets so long as the government continues to own an equity interest in that company, the law blog recounts.
Termed 'bailout love' by one law blog, the total of $11 million in government contract work is split evenly between the two firms.