Former Government Motors Czar to pay $10 million fine to New York

While the Obama administration focused on how the auto companies in Detroit were going to pay back its loans to the U.S. taxpayers, it failed to notice its own “auto czar” Steven Rattner had skeletons in his own trunk.

As a founding principal of private equity firm Quadrangle Group, LLC (“Quadrangle”) , Rattner was accused of a “pay to play” scheme involving New York’s pension fund.

According to New York Government Media Center, Rattner's Quadrangle allegedly gave kickbacks to officials if they directed state pension money to the fund.

Note the word, allegedly, will probably stick, because now the public will never read or hear any admission; as Rattner has now agreed to pay a $10 million fine in a settlement with the New York attorney general’s office; and all this just two days before Cuomo will be sworn in as New York's governor.

The official release by the attorney general’s office reads, "Mr. Rattner will pay $10,000,000 in restitution to the State of New York and be banned from appearing in any capacity before any public pension fund within the State of New York for five years. The agreement today will end the two lawsuits previously filed against Mr. Rattner by the Attorney General’s Office in New York State Supreme Court relating to the circumstances surrounding $150 million in investments in Quadrangle from the New York State Common Retirement Fund (“CRF”)."

As per previous news accounts, Quadrangle the company had already agreed to pay a total of $12 million to settle charges by the SEC and the New York State Attorney General back in April over the pension fund scheme case. Rattner was not part of that settlement, but left the Obama administration in July 2009, after federal investigators began probing.

Steve Rattner later penned a 300-plus page book entitled "Overhaul" which gives one of the first inside looks into the Obama White House. He also admitted in the book that he had no expertise in the sprawling, complicated industry.

From the Detroit perspective, few people wanted a czar to run the auto companies, especialy someone who didn't understand it. Yet, GM managed to find itself with new meaning behind the GM label, “government motors.” Likewise, Chrysler shared in that nickname but lacked the symbology.

And the UAW had to read excerpts from Rattner’s book where Rahm Emmanuel supposedly dismissed the interests of the union when it came time to choose saving GM or letting it die.

In a statement issued in conjunction with today’s agreement, Mr. Rattner stated: “I am pleased to have reached a settlement with the New York Attorney General’s Office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the Attorney General and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers.”

For the record, aside from being a financier which likely enabled him to be chosen to run the auto reorganization, Mr. Rattner is also a former journalist for The New York Times.

Share this content.


Sign-up to our email newsletter for daily perspectives on car design, trends, events and news, not found elsewhere.