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Mar 02, 2009


KSBR mired

Mr. Small berg,

You need to be more detail oriented. There is nothing in the docs binding Treasury and B of NY Mellon that cite its role as a "prime contractor." And it is not acting that way. As a matter of fact, last fall Treasury went out of its way to say that the Financial Agents it hired for various roles were not "contractors." They are actually fiduciaries, just like your stock broker or your commercial bank may be vis-a-vis you. And they are not governed by the FAR.
I, too, am bothered that the govt and BNY Mellon won't disclose the fee and the detailed COI mitigation measures. That would help us have more trust and confidence in programs such as TARP. And I agree that Sununu's several attributes are too many to keep him from appearing to have at least potential conflicts-of-interest. BTW, Wall Street sources do say that Treasury bargained really hard on the fee, and was looking for a 50 percent discount on whatever the going rate is for custodian services. I have no idea how it turned out. But there is a cost to BNY. Lots of institutions and investors still need that service, and BNY Mellon would have had to take some number of people off-line its regular business to service the government. It is probably a fair price that the government is paying.

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