Treasury rescue hires must mind fiduciary duty
WASHINGTON (Reuters) - The U.S. Treasury Department said on Monday it will waive some rules on hiring money managers to oversee a $700 billion financial rescue program and those outside agents will be bound by a fiduciary duty to the Treasury.
"As financial agents, asset managers will have a fiduciary agent-principal relationship with the Treasury with a responsibility for protecting the interests of the United States," the Treasury said.
The Treasury also outlined the principles that it hopes will mitigate the conflict of interest of outside contractors performing services in conjunction with the program.
Companies wishing to do work for the Treasury will have to present a report on possible conflicts of interest and how they will mitigate those conflicts.
"Treasury may obtain non-disclosure agreements and (conflict of interest) agreements in advance of," awarding a contract, the Treasury said in a statement.
The fourteen-point guidelines to prevent conflict of interest released on Monday will soon be replaced by a more comprehensive plan to keep Wall Street firms from unfairly profiting from their government work, the Treasury said.
The sweeping plan that became law last week will let financial institutions sell failing assets to the Treasury so that they can cleanse their balance sheets and return to normal lending.
The Treasury said that it will hire some outside agents without the customary competitive bidding citing the "compelling urgency" of the current financial crisis.
(Reporting by Mark Felsenthal and Patrick Rucker; Editing by Andrea Ricci)
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