For law firms advising the Treasury Department on the Troubled Assets Relief Program, it's one thing to win a fat government contract for legal services - but another to actually see the cash.
TARP watchdog the Congressional Oversight Panel today released a report detailing exactly how much Treasury has shelled out to the 18 law firms that have been awarded contracts since the program began in late 2008. In most cases, the difference between the potential contract value and the amount owed for services performed is significant.
Take Sonnenschein Nath & Rosenthal (now SNR Denton). In March 2009, the firm was awarded a contract to advise on auto investment, according to the report. TARP infused nearly $86 billion into the auto industry, propping up General Motors and Chrysler.
The legal services contract was worth a maximum of nearly $27 million. Sonnenschein got $1.8 million(plus $2.7 million for another auto contract).
Haynes and Boone was awarded the same March auto contract, and earned just $346,000.
The lion’s share of the auto contract went to Treasury’s top law firm, Cadwalader, Wickersham & Taft, which was paid about $17 million.
Nor is it the only money Cadwalader has earned from the government. The firm is also set to make $2 million from a contract worth up to $21 million awarded on July 30, 2009.
Debevoise & Plimpton was also awarded the July 30 contract – but earned just $160,000. Fox, Hefter, Swibel, Levin & Carol’s share was a mere $84,000.
Cadwalader was also one of 13 firms selected by Treasury in August for an omnibus legal services contract worth up to $100 million. The firm has scored the first work under that agreement -- $2 million worth.
In addition, Cadwalader earned $3.9 million working as a subcontractor, according to the report.
Firm partner Louis Solomon in an Oct. 4 story in The National Law Journal gave a low ball estimate of Treasury’s total payments to Cadwalader to date, which he said were “more than $13 million.”
All told, the firm has been paid $19 million, and stands to earn another $3 million for work considered “obligated” – that is, is the amount that Treasury is obliged to pay, provided that the firm performs in accordance with the terms of the arrangement.
The total potential value of all Cadwalader’s contracts, according to the report, is $147 million. Last month, the oversight panel invited Cadwalader to testify at a public hearing about potential conflicts of interest because the firm also counts TARP recipients as clients.
Treasury and Cadwalader jointly declined the invitation, citing attorney-client privilege, but later met privately with the panel.
In a call with reporters last night, panel chair Sen. Ted Kaufman (D – Del.) said the panel “feels pretty good” about how Treasury is dealing with potential law firm conflicts. “It looks like they have appropriate procedures in place,” he said.
Simpson Thacher & Bartlett has made the second-most money off TARP work – $5.5 million paid to date, and plus another $5.5 million that’s obligated, for a total of about $11 million for contracts with a potential value of $21 million.
Squire, Sanders & Dempsey stands to earn the full amount of its contracts – about $7 million – for work related to housing and the Capital Purchase Program.
Hughes, Hubbard & Reed earned $3 million off a contract worth up to $5.6 million related to the Capital Purchase Program, plus another $600,000 under a $13 million contract for document production and litigation support.
Venable was paid $1.4 million of a $5 million contract related to the Capital Assistance Program. Schiff Hardin is owed the full amount of its contract related to housing issues -- $537,375. Bingham McCutchen has made $442,000 off contracts related to the SBA Security Purchase Program with a $1.9 million ceiling.
Locke, Lord, Bissell & Liddell was paid $272,000 from a $2 million contract. Other firms selected for the $100 million omnibus contract that are not yet owed any money are Alston & Bird; Love & Long; Orrick, Herrington & Sutcliffe; Paul, Weiss, Rifkind, Wharton & Garrison; Perkins Coie; and Shulman, Rogers, Gandal, Pordy & Ecker.