Cleary Gottlieb Steen & Hamilton offices in Washington, D.C.

The law firm Cleary Gottlieb Steen & Hamilton has inked a contract with the U.S. Treasury Department to help guide the Trump administration on the structuring of loans and other transactions involving air carriers grappling with a substantial drop in travel amid the coronavirus crisis.

The "letter contract" calls for Cleary to advise on direct loans from the Treasury Department and other "transactions with air carriers involving a portfolio of assets that Treasury will acquire, invest in, or guarantee." The Treasury Department said those assets could include debt obligations and equity interests.

"The contractor may be tasked with providing expert advice and guidance with respect to loans, equity investments, and other direct or indirect investments," the contract states.

Appearing at the daily White House briefing Thursday, Treasury Secretary Steven Mnuchin said the department had hired three financial advisers and three law firms to advise the administration. Last week, Congress approved a roughly $2 trillion relief package responding to the coronavirus crisis, leaving the Treasury Department largely in charge of the largest emergency spending program in the nation's history.

Cleary's contract included language that said "the contractor is not authorized to make expenditures or incur obligations exceeding $650,000 dollars." The contract also requires Cleary to notify the Treasury when it has incurred three-quarters, or about $500,000, of that authorized amount.

"We've hired three outside advisers—will be financial advisers and three law firms. And I want to thank them," Mnuchin said. "They're all working for basically very, very little money. They couldn't work for free, so they've agreed to basically work for what they would sign up to work for charitable organizations. So again, no big fees to bankers. We've got a great team of three lawyers and three financial advisers that will assist us."

Mnuchin added: "We have the PJT Partners is going to do the passenger airlines, Moelis and Co. is going to do the cargo and contractors, and Perella Weinberg will handle the national security. And there'll be three law firms, which we'll announce shortly, that will be working in each one of those sectors."

The Treasury Department has not announced the other two firms that will contract with the agency.

The Treasury Department's contract with Cleary names Steven Wilner, a New York-based partner at the firm who specializes in corporate acquisitions and restructurings, including private equity investments. Wilner was not immediately reached for comment Friday.

The pandemic relief package included $25 billion in grants for passenger airlines to pay workers and another $25 billion in loans and loan guarantees. It authorizes the Treasury Department to take a stake in airlines in exchange for direct payments, a provision that has raised concerns within the industry.

In a letter to federal officials, unions representing flight attendants said that provision could amount to a "poison pill," dissuading airlines from accepting assistance.

The Wall Street Journal reported that airline representatives met with Treasury Department officials Tuesday to discuss whether there are alternatives to direct equity stakes in exchange for federal relief.

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