I really was like "Jesus, Lin".

The other guys are almost definitely in Varrick's pocket, but Lin has no excuse. Toph would be very disappointed in her.

I think Lin knows Varrick is bad but also knows Varrick is watching her and that's why she was ignoring Mako to try and keep Varrick from worrying about a police investigation. At this point I think she knows Mako has what she needs so she's letting the crooked cops arrest him so she can get what he has and keep Varrick at ease.