Thursday, April 16, 2009

Another Great Vetting Job: Obama's Car Czar Under SEC Investigation

Way to go, Barry O, another fine hire you've got here.
Steven Rattner, the leader of the Obama administration's auto task force, was one of the executives involved with payments under scrutiny in a probe of an alleged kickback scheme at New York state's pension fund, according to a person familiar with the matter.

A Securities and Exchange Commission complaint says a "senior executive" of Mr. Rattner's investment firm met with a politically connected consultant about a finder's fee. Later, the complaint says, the firm received an investment from the state pension fund, then paid a $1.1 million fee.

The "senior executive," not named in the complaint, is Mr. Rattner, according to the person familiar with the matter. He is co-founder of the investment firm, Quadrangle Group, which he left to join the Treasury Department to oversee the auto task force earlier this year.

A spokeswoman for the Treasury, which is in charge of the auto task force, said that "during the transition, Mr. Rattner made us aware of the pending investigation."

In the long-running pay-to-play case, authorities allege that about 20 investment firms made payments in exchange for investments from the $122 billion New York State Common Retirement Fund. The case, being investigated by New York Attorney General Andrew Cuomo and the SEC, has led to three criminal indictments and a guilty plea.
Mr. Rattner, 56 years old, is a veteran deal maker who co-founded New York-based Quadrangle in 2000 after spending years as an investment banker at Lehman Brothers, Morgan Stanley and Lazard Freres & Co., where he rose to the No. 2 spot. Earlier this year, President Barack Obama tapped him to lead a task force of two dozen people to figure out how to restructure ailing U.S. auto makers General Motors Corp. and Chrysler LLC.

Hank Morris, who was the top political adviser and chief fund-raiser for former New York Comptroller Alan Hevesi, was a placement agent named in the SEC complaint. The deputy comptroller, who helped produce "Chooch," was David J. Loglisci.

Both men were arrested last month and charged in a 123-count state criminal indictment that included money-laundering, enterprise-corruption and bribery charges. The SEC filed civil-fraud charges against the two men. Attorneys for the two men have denied the accusations.
H/T The Rhetorician

No comments: