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December 4, 2008 12:53 PM

Hughes Hubbard, Squire Sanders Pulling in Profits From TARP

Posted by Brian Baxter

According to a Government Accountability Office report released on Tueday, Hughes Hubbard & Reed and Squire, Sanders & Dempsey have between them billed about $2.8 million in fees for their work on the federal government's $700 billion economic rescue plan. (Hat Tip: Bailout Sleuth.)

The Am Law Daily previously reported that both firms were hired to provide legal counsel to the government's Troubled Assets Relief Program, which was designed to buy troubled assets from up to 2,500 banks and financial institutions. (You can find both firm's contracts, each worth up to $5.5 million through April 2009, here and here.)

In October we reported that Simpson Thacher & Bartlett had been chosen by the Treasury Department to serve as lead counsel to its nascent Office of Financial Stability.

According to the GAO's 65-page report, through November 25, Hughes Hubbard received $1,411,300 Squire Sanders was paid $1,380,000 (see pages 36 and 37 for details). The value for Simpson Thacher's services, meanwhile, was structured as "indefinite" and listed a contract worth between $5,000 and $500,000.

Law firms weren't the only ones to scoop up government cash. Accounting firms Ernst & Young and PricewaterhouseCoopers received $492,007 and $191,469, respectively, for work done through November 25.

On Wednesday, a day after the GAO report was released, President-elect Barack Obama and Democratic lawmakers called for Treasury Secretary Henry "Hank" Paulson to provide more details on how TARP funds were being expended. The GAO report itself called for more oversight of the bailout program.

None of the law or accounting firms named in the report provided hourly billing rates or breakdowns of how their fees were determined.

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