Wednesday, July 15, 2009
Obama's Auto Czar Steve Rattner Quits;
Is There A Scandal Brewing?
Steven Rattner, chief architect of the bailouts of General Motors Co. and Chrysler LLC, is leaving the Obama administration after less than six months on the job and just days after ushering GM through a speedy bankruptcy-court proceeding.
Mr. Rattner, a former investment banker and onetime partner of the New York private-equity firm Quadrangle Group, is closely identified with the bailout's successes and controversies. He led revamps that shed thousands of jobs and eliminated heavy debt loads. He also drew criticism from those who objected to the government's intervention in the automobile sector. All told, the bill could hit $100 billion.
[Rattner's unexpected resignation] comes as the New York attorney general's office has intensified scrutiny of Quadrangle Group and Mr. Rattner, 56 years old, as part of a long-running probe, according to a person familiar with the matter.
The attorney general is overseeing a broad investigation into alleged payments to secure business with New York state's large public-pension fund.
There is no indication that Mr. Rattner's return to New York is connected to the probe. The fact he has been named in an ongoing investigation could have complicated any administration effort to appoint Mr. Rattner to a more permanent post.
A spokesman for Quadrangle declined to comment. Neither the firm nor Mr. Rattner has been charged with wrongdoing.
Mr. Rattner didn't return calls seeking comment.
Mr. Rattner won't be returning to Quadrangle Group, according to people close to him. His departure from the firm he co-founded came at a tough time for the firm and irked some former colleagues.
His short tenure as head of the autos task force came under a cloud in April, when details of alleged influence-peddling surfaced.
At the center of the two-year investigation by the Securities and Exchange Commission and the office of New York State Attorney General Andrew M. Cuomo are millions of dollars in payments made by investment firms including Quadrangle Group, the private-equity firm founded by Rattner in 2000, to middlemen known as placement agents, who helped the firms win investments from the pension fund of New York state and other local governments.
In SEC filings, a "senior executive" at Quadrangle, whom sources have identified as Rattner, is described as having been directly involved in arranging a $1 million-plus payment to a middleman. Rattner headed Quadrangle until February, when he was tapped to join the Obama administration's auto task force.
The White House has said that Rattner brought up the investigation while he was being vetted and that no charges were expected to be filed against him.
A person close to Rattner who spoke on the condition of anonymity said that he would not be returning to Quadrangle.
There's nothing wrong jumping to a conclusion of judging someone guilty when charges haven't been filed. The Left does it all the time.
Has Dear Leader issued his usual reaction yet: "That's not the Steve Rattner that I knew."
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