AP source: NY AG may press for Rattner settlement

NEW YORK — The state attorney general may press for a legal settlement with Steven Rattner, until recently a key Obama administration adviser on the auto industry, over possible civil charges in a pay-to-play investigation, The Associated Press has learned.

Rattner announced Monday that he was resigning his position on the White House's auto industry task force, which led the restructure of General Motors Co. and Chrysler Group LLC. It remained unclear Tuesday whether that departure had anything to do with the ongoing public corruption probe that has nibbled at his heels in New York.

Attorney General Andrew Cuomo and the Securities and Exchange Commission have charged a state official and a political consultant with extracting millions of dollars in kickbacks from investment firms trying to raise money from the state's big public pension fund.

The private equity firm Rattner led before joining President Barack Obama's administration, the Quadrangle Group, paid more than $1 million to one of the people indicted in the case, New York political consultant Hank Morris.

A person familiar with the investigation said that criminal charges were unlikely but that Rattner or Quadrangle could reach civil settlements like those Cuomo has reached recently with other companies that made similar payments. The person wasn't authorized to publicly discuss the pending investigation and spoke to the AP on condition of anonymity.

A spokesman for Quadrangle and Rattner declined to comment Tuesday about the resignation or any settlement talks. A spokesman for Cuomo's office also declined to comment.

Rattner also has been scrutinized over a business deal that appeared to have been designed to curry favor with pension fund officials.

In early 2005, a film company owned by Quadrangle agreed to distribute a low-budget movie called "Chooch," produced by the brother of the pension fund's chief investment officer. Shortly after the film deal was inked, the pension fund agreed to invest $150 million with Quadrangle.

Two weeks ago, the Pacific Corporate Group agreed to pay $2 million to resolve its role in the probe. Riverstone Holdings said it would pay $30 million. The Carlyle Group, one of the nation's largest private equity funds, agreed to pay $20 million in May.

Each of those companies also agreed to implement reforms aimed at reducing the potential for influence peddling, including adopting rules banning campaign contributions to elected officials with roles in deciding how public pension funds invest their money.

Morris was indicted in March. He denied any wrongdoing and pleaded not guilty.

Comments

[Avanti2]

Cuomo is to chicken to indite Rattner. That would mean that he would fall into dis-favor with Obama and Cuomo can't risk that if he want's to run for Governor of New York. Cuomo needs Obama's fund raising capability.

[voltage356]

Many people were taken by surprise when Steve Rattner, President Barack Obama’s car Tsar resigned yesterday—we here at The Black Star News weren’t.

On April 21, 2009 The Black Star published my column under the heading “Why Hasn’t Cuomo Indicted Rattner?”

http://blackstarnews.com/news/135/ARTICLE/5865/2009-07-14.html

[ndem]

Thank G-d he got rid of Rattner. That was a very unwise and I'll scratch your back kind of choice...a­lso be wary of nominees/appointees from the media industry in general as they can turn on Obama just as they helped create the new "Camelot" magazine cover look...Our President should be beholden only to his conscience. And definitiely not he media nor the financial industry! We voted for Obama, he is there to serve the people! Not these jerks making money off of us!