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only the largest firms, some who were in the middle of the subprime crisis, are running the bailout.â€
Critics also say that the Treasury set a deadline, which gave potential firms very little time to apply [s4] for these contracts and that the banking community should hold the Treasury accountable to choose a team of contractors that is diverse in content and size for the new Office of Financial Stability and its subordinating authorities.
“We asked vendors to demonstrate their ability and commitment to working with small, veteran, minority and women-owned businesses as sub-contractors. And we are evaluating their submissions in part on their capability to do this,â€ said Kashkari in testimony at a Senate Committee on Banking, Housing and Urban Affairs hearing Oct. 23.
Kashkari explained that since TARP’s inception, the Treasury has announced guidelines for solicitations with specific opportunities for small businesses. Specifically, the Treasury hired investment adviser EnnisKnupp to identify qualified minority- and women-owned businesses. The firms’ duties also will include developing and maintaining investment policies and guidelines and assisting with the oversight of the portfolio’s multiple asset managers. This oversight will include helping Treasury to determine asset allocations for each manager, evaluating the performance and costs, identifying conflicts of interest and identifying strategic investment and market issues impacting the overall portfolio.
The Treasury plans to issue separate notices to identify smaller, minority- and women-owned financial institutions that do not meet the minimum qualifications in the initial notices and smaller financial institutions will be designated as subcontractorsÂ and/or sub-managers within the portfolio.
In addition to EnnisKnupp, the Treasury also hired the Bank of New York Mellon as lead custodian to implement accounting, auction management and other infrastructure services; Simpson, Thacher and Bartlett as legal adviser for the equity program; and Pricewaterhouse Coopers and Ernst & Young for internal control and accounting services.
“Recruiting the right people is essential to the success of this program and we are moving quickly on several fronts,â€ said Kashkari. “While the permanent team is being identified for tomorrow, we are tapping the very best, seasoned, financial veterans from across the government to help launch the program today.â€
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