Former auto czar Steve Rattner settles in a pay-for-play scandal, which will result in a $10 million fine.
Former auto czar Steven Rattner has agreed to pay a $10 million fine to settle a “pay-to-play” case that claimed the one-time reporter had handed out kickbacks in order to steer $150 million in New York State pension fund business to his Wall Street firm.
The settlement, approved by NY Attorney General – and Governor-elect – Andrew Cuomo also bars Rattner from having any dealing with any public New York pension fund for five years. But the former NY Times journalist still scored a victory. Cuomo had originally hoped to force Rattner to pay a $26 million fine and to bar him for life from working anywhere in the securities industry.
Rattner, who is worth a minimum of $188 million according to knowledgeable sources, served as the Obama Administration’s first “auto czar,” helping put in place the bailout of, among others, General Motors and Chrysler, in early 2009. But shortly after leaving the government he became enmeshed in an ongoing scandal involving the illegal efforts by various private equity firms to gain lucrative pension fund business.
Cuomo wasn’t the only one looking at Rattner’s financial dealings. The financier had also been accused by the Securities and Exchange Commission of participating in a “widespread kickback scheme” through his Quadrangle Group LLC.
The SEC has already reached a settlement with Rattner, who paid a separate $6.2 million fine to the federal government last month. And he accepted a two-year ban from the securities industry.
For his part, Rattner expressed his relief at being able to “put this matter behind me,” but he also added an apology to Cuomo for possibly having “made reach this agreement more difficult.”
While barred from working with pension funds in NY State, and from temporarily working in securities, Rattner will still be able to do a wide range of work in the financial community, including offering financial advice to Quadrangle clients.
Rattner left Quadrangle in February 2009 to handle the automotive bailout process but left five months later, returning to theWall Street firm.
He recently published a tell-all book outlining the collapse of GM and Chrysler, and what went on in Washington as the president struggled to save the makers and avert a potential loss of a million or more jobs.
Rattner did not admit guilt as part of his latest settlement, but it adds to the hefty penalties that have resulted from the pay-to-play scandal. So far, the New York Attorney General has collected $170 million in fines as a result of the investigation.