U.S. Treasury seeks Wall Street's aid with bailout

WASHINGTON (Reuters) - The U.S. Treasury on Monday sought help from Wall Street to manage a $700 billion rescue of financial services firms that made big bets on failing mortgage investments.

Just three days after President George W. Bush signed legislation creating the rescue fund, the Treasury formally solicited financial services firms to fill three key posts in the managing the rescue plan.

Specifically, the Treasury sought a firm to manage mortgage securities, another to manage whole loans, and a third firm to help manage the auction of investments.

Under the plan, the Treasury will soak up hundreds of billions of dollars of failing investments so that finance companies can scrub their balance sheets and be return to normal lending.

On Monday, the Treasury also outlined some conflict of interest safeguards, as well as hiring and performance standards that will underpin the program that should hold its first asset auction in about five weeks.

Outside asset managers will have "a responsibility for protecting the interests of the United States," the Treasury said in a statement.

Treasury officials hope that many suitable financial firms and individuals will apply for the jobs that they hope to fill quickly. The deadline to apply for the first three jobs is Wednesday at 5 p.m. New York time.

On Friday, Treasury said that it planned to recruit about two dozen fresh staff to help run the program and between five and ten asset managers to look after its investments.

The Treasury on Monday 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 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)