Treasury Pays Firm $2.5 Million to Consult on Bailout

One thing has been clear all along about the $700 billion Wall Street rescue-bailout: Someone would make money on it.

That started today.

Treasury just issued a statement saying it has hired Chicago investment consulting firm Ennis Knupp and Associates to advise on the implementation of the bailout/rescue plan.

The contract will last for one year and pay Chicago-based Ennis Knupp $2,495,190.

Here's a copy of the contract.

Treasury said Ennis Knupp was chosen from among three bidders.

-- Frank Ahrens

October 13, 2008; 2:50 PM ET  | Category:  business
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Let's be serious. If they didn't do this and the p*ssed away the money, you'd complain they didn't hire an expert. Now that you do, you complained they hired an expert.

And 2.5m is not a lot in DC for this type of engagement. That's probably about a 6 month engagement (and I haven't looked at the contract).

I feel better they got outside help rather than relying on some old political hack telling them how to have the greatest impact with this money.

Posted by: The Truf | October 13, 2008 3:12 PM

A consultant is somebody who borrows your watch to tell you the time and then walks off with the watch. I've seen that done before. I'll spare you the details. These guys are getting rich on the buddy can you spare a dime economy. I wish I had more spare time and I'm low on Scotch here. I'm on the hate death express here and I'm hell bound and Scotch bent.

Posted by: Night Mayor | October 13, 2008 3:23 PM

They could have hired academic economists.

Posted by: Arlington | October 13, 2008 3:28 PM

The price isn't what bothers me, it's the number of people.

The contract calls for 1,000 workdays. The problem is, that only works out to about 4 people, 5 days per week for 50 weeks.


Posted by: DF in FL | October 13, 2008 3:53 PM

apparently, only bloggers are willing to donate their time to offer suggestions and advice.

democracy for sale, lease, and sublet.

where are the millionaire, billionaire patriots ready to roll up their cardigans and GIVE BACK to the country that enriched them?

greed is the core issue, by the way, and a philosophy bankrupt of morality.

Posted by: bloggod | October 13, 2008 4:01 PM

I thought they had already gotten all the smart people in the room to come up with this idea and how to implement it. Imagine my surprise to find out that there were other smart people we had to bring in!!! After 7 years, we still don't have all the smart people??That's my biggest complaint about this administration, they promised to get all the smart people so good decisions could be made, yet it looks like we're still trying to identify them. Too little, too late.

Posted by: Observer23 | October 13, 2008 4:06 PM

Why "outside consultants" instead of our Treasury Dept advising Bush? Did he pack it with incompetent, political suck-ups -- Heck of a Job Brownies?

No need to answer that.

Posted by: deben | October 13, 2008 4:34 PM

Here's the joke:

The credit and economic viability of this country, brought down by greedy investment bankers like Goldman Sachs. (international bankers is the polite term, PC)...

is being fixed by, and certainly for, Goldman Sachs, et. al. BY the former head and huge shareholder guessed it.

With American taxpayer's money. Apparently this isn't a democracy any more, occupied and run by international bankers, et. al. They'll take their money and run, as many have to date. Try the Netherlands...the Emirates, etc.,,,,,

Posted by: same old | October 13, 2008 4:41 PM

The difference between hiring an academic expert and a consultant is the difference between hiring or reading a book and the difference between having the knowledge in the book being put to effective practical use...So, in case it would have been a legal problem, the book would have been a better solution, which since it is not, so a consultant who might even want to steal away your watch...might add the extra applicability of that book to the usefullness it is written for....!! And no guesses for guessing it, it is a consultant writing this post....!! And more-so it is not always about the clothes..."It is the way you wear them, the clothes. No points for guessing..clothes here are the books..."....!!

Posted by: DKG | October 13, 2008 4:55 PM

Oh, they haven't even gotten warmed up yet. When you spend 700 billion, you're going to have a few expenses.

There are many firms licking their chops right about now.

Thanks to the post for keeping tabs, though.

Posted by: John B. | October 13, 2008 5:12 PM

We should cut out these costly middlemen. Why not provide Wall Street firms with weapons and a license to directly collect whatever taxes they want? Our financial oligarchy should stop "outsourcing" its exploitation to the federal government.

Posted by: Nelson Alexander | October 13, 2008 5:40 PM

I am certain that Paul Krugman is available.

Posted by: James R. Large | October 13, 2008 5:47 PM

I'm available. And I can't be any worse than most of Wall Street types.

Posted by: samson151 | October 13, 2008 6:03 PM

If it is indeed 1000 person days, that's about $300/hr on average. I wouldn't call that a premium price for the type of talent required.

I know the top tier strategy firms could average $150/hr more than that. And the unique skillset required here? I'd call that loss leader pricing to get peripheral and follow-on engagements.

Posted by: JJ | October 13, 2008 6:32 PM

I'm sure Gordon Brown would/could have done the same in a few trans-Atlantic phone calls. Oh, wait, that's already happened, hasn't it? Paulson decided to follow Brown's lead because it...well, it just made so much more - what's that word? - right, SENSE. (See Nobelist Krugman in today's NYTimes.)

Posted by: Peter Vogt | October 13, 2008 6:37 PM

You know, we always deride economists as too academic. But, it seems to me that they have followed this crisis through. Can we get the several universities and UNDp to come up with a plan? After all, I have a child in college and she may loose her funding next year because the turkeys they have hired are taking more money for nothing. By the by, I have seen thirty years of investment for retirement go south. Are they going to directly replace my money? Are we still playing "pass the dime to the bankers, stupid?"

Posted by: SJDason | October 13, 2008 6:48 PM

Posted by: benq11 | October 14, 2008 12:46 PM

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