BlackRock has gained a second-round spot with the Treasury Department as part of the selection process for TARP program money managers, reports the Wall Street Journal. The money manager could manage as much as $7 billion of TARP monies. BlackRock already manages funds related to the Bear Stearns and AIG bailouts.

The New York Times' Eric Lipton and Michael de la Merced cover similar ground Tuesday morning.

The Journal did not name other money managers making it to the second round. Instead, the focus of the piece is a profile of Larry Fink and BlackRock, including Fink's personal ties to Timothy Geithner, Rahm Emmanuel (White House Chief of Staff) and William Dudley (president of the Federal Reserve Bank of New York).

The money quote comes from Janet Tavakoli, founder and president of Tavakoli Structured Finance:

"BlackRock is too close to the problem to be objective," Tavakoli is quoted as saying. "One should question how much they are part of the problem."

The Times piece extends that tack, focusing on the "scrutiny" drawn to Fink's firm, because it "has become so ubiquitous that some lawmakers, federal auditors and watchdog groups are now asking if the firm does too much, and if its roles as government adviser, giant federal contractor and private money manager will inevitably collide."

"They have access to information when the Federal Reserve will try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe," Senator Chuck Grassley (R-Iowa) told the Times. “The potential for a conflict of interest is great and it is just very difficult to police." 

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