Steve Rattner and the terrible, horrible, very good day [Update]
First the bad news. New York Atty. Gen. Andrew Cuomo filed two lawsuits against the former reporter-turned-financier-turned-government-advisor, accusing him of paying state officials to steer investment work to his firm, Quadrangle Group.
Cuomo, who was recently elected New York governor, is seeking a permanent ban on Rattner from the securities industry, along with $26 million.
The lawsuit comes after many other people in the case have already been hauled in by Cuomo.
The Securities and Exchange Commission publicly announced its own suit against Rattner Thursday morning, though Rattner has already agreed to settle that suit for $6.2 million and a two-year exile from investment work.
The bad news comes on the very same morning that Rattner’s work in turning around the auto industry was being vindicated with General Motors' initial public offering, which priced Wednesday far above most early estimates and kept rising in early trading Thursday morning.
Rattner, who guided the Obama administration’s effort to turn around the auto industry after the financial crisis, took a bit of a victory lap on Huffington Post Wednesday evening with this essay.
But Thursday morning, as that piece was being forwarded around, the news of the lawsuits hit.
In two separate suits, Cuomo accuses Rattner of paying kickbacks to win $150 million in investments from New York’s public pension fund. The kickbacks allegedly included over a million dollars given to a top political advisor of the New York state comptroller from 2003 to 2006, Alan Hevesi. Rattner is also alleged to have helped a relative of a Hevesi staffer land a DVD distribution deal for his low-budget movie "Chooch."
“Steve Rattner was willing to do whatever it took to get his hands on pension fund money including paying kickbacks, orchestrating a movie deal, and funneling campaign contributions,” Cuomo said in a statement.
Quadrangle has already settled with the state and distanced itself from Rattner. Hevesi pleaded guilty in October to charges Cuomo brought against him.
[Updated at 10:51 a.m.: Rattner released a statement denying Cuomo's accusations and promising to fight the suits.
“While settling with the SEC begins the process of putting this matter behind me, I will not be bullied simply because the Attorney General’s office prefers political considerations instead of a reasoned assessment of the facts,” he said in a statement. “I intend to clear my name by defending myself vigorously against this politically-motivated lawsuit.”]
-- Nathaniel Popper
Photo: Steve Rattner. Credit: David Guralnick / Detroit News