Christy Romero, the acting special inspector general (SIG) for the Troubled Asset Relief Program, released a report saying that the Treasury Department’s Office of Financial Stability paid $25.5 million in TARP-related legal fees and expenses to four law firms even when the bill paid did not detail the work performed by the law firm or when the charge was “not allowed under the contract.”
The SIG report “found weaknesses” in the OFS bill payment procedures and that OFS had paid bills that offered “no descriptions of the work performed” or contained other problems, such as:
“vague descriptions of the work performed;
descriptions for more than one task in the time entry (“block billing”);
expense charges without adequate support; and
administrative charges not allowed under the contract.”
The SIG investigators could not “assess adequately the reasonableness” of most individual charges on the bills, nor could they “assess the reasonableness” of $8.1 million of the total $9.1 million that OFS paid in legal fees “because of the lack of adequate detail” on the bills paid. In particular, SIG also said that one law firm billed $5.8 million without any “detail whatsoever as to the work performed,” as well as without “any receipts, or adequate documentation, for its expenses.” This firm even “billed for expenses under another contract that did not allow expenses.”
The inspector general said that the Office of Financial Stability should “disallow and seek recovery . . . for $91,482 in ineligible fees and expenses paid that were specifically not allowed under the OFS contract.”
All these billing problems notwithstanding, the Special Inspector General noted that “this does not mean that all the fees and expenses SIGTARP questioned were unreasonable.”
