Rattner settles with Cuomo for $10 million

Steven Rattner, Former Head of U.S. Treasury Department’s Auto Task Force in New York, November 19, 2009.
Credit: Reuters/Brendan McDermid

Former Obama administration auto industry czar Steven Rattner agreed to pay $10 million to resolve lawsuits by New York’s attorney general over kickbacks allegedly paid to do business with the state’s pension fund.

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Days of Noah

“But as the days of Noe were, so shall also the coming of the Son of man be.”
—Matthew 24:37


”The earth also was corruptStrongs 7843: shachath, shaw-khath´; a primitive root; to decay, i.e. (causatively) ruin (literally or figuratively):—batter, cast off, corrupt(-er, thing), destroy(-er, -uction), lose, mar, perish, spill, spoiler, x utterly, waste(-r). before God,and the earth was filled with violence”.
—Gen 6:11

Rattner is the most prominent outside executive and last major figure to resolve charges in a multiyear “pay to play” corruption probe that involved the roughly $132.8 billion New York State Common Retirement Fund.

New York Attorney General Andrew Cuomo said on Thursday the settlement ends two lawsuits by his office over alleged kickbacks dating to 2005 and 2006 when Rattner worked for Quadrangle Group, the private equity firm he co-founded.

In agreeing to settle, Rattner also accepted a five-year ban from working with any New York public pension fund.

Cuomo had originally sought to recover at least $26 million from Rattner, 58, and permanently bar him from the securities industry in New York.

“Rattner can claim victory for avoiding a lifetime ban, and while Cuomo didn’t get Rattner’s scalp, he can claim victory for substantially improving practices at the pension fund,” said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University.


Cuomo said he has won eight guilty pleas in the probe, including one from former state comptroller Alan Hevesi, and more than $170 million of settlement payments.

He also said 19 firms agreed to abide by a code of conduct governing their dealings with public pension funds.

The Rattner settlement “resolves the last major action of our multiyear investigation,” Cuomo said in a statement. “We have been able to help restore and protect the integrity of the state pension fund.”

In a statement released by Cuomo, Rattner said he was pleased to settle, and that the accord “allows me to put this matter behind me.

“I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult,” Rattner added.

Cuomo will become New York’s governor on January 1. Eric Schneiderman, who has been a state senator, will succeed him as attorney general. Both are Democrats.

Last month, Rattner settled related allegations by the U.S. Securities and Exchange Commission, agreeing to a $6.2 million civil penalty and two-year ban from working with investment advisers and broker-dealers.

Rattner is still pursuing arbitration proceedings against Quadrangle to recover money he believes he is owed, spokesman Davidson Goldin said.

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