Steven Rattner to pay $10 million for raiding N.Y. pension fund

File photo of former Obama car czar Steven Rattner.

Steven Rattner will pay New York $10 million. (Photo Credit: CC BY-ND/Finance Blog)

Former Obama administration car czar Steven Rattner has reached an agreement with the New York State Attorney General’s office after a multi-year investigation into allegations that he engaged in a kickback scheme that enabled him to skim money from that state pension system. The New York Times reports that under the agreement, Rattner will pay $10 million to the State of New York and, in his capacity as founder of private equity firm Quadrangle, will not be allowed to work with any public pension fund for five years. Rattner was not required to admit any wrongdoing.

Rattner oversaw auto industry bailout

In his position as President Obama’s car czar, Steven Rattner was charged with overseeing the automotive industry bailout, ensuring that federal funds were allocated properly. In hindsight, it appears Rattner’s alleged pension fund activity – a kind of “pay for play” situation in which Quadrangle is said to have paid for access to public pension funds – makes the duties he performed as car czar suspect.

New York State Attorney General Andrew Cuomo released a statement in which his relief was evident, even if the monetary settlement was much less than the $26 million his office initially sought from Rattner.

“The state pension fund is a valuable asset held in trust for retirees and supported by taxpayers. Through the many cases, pleas and settlements in this investigation, I believe we have been able to help restore and protect the integrity of the state pension fund,” Cuomo said.

Rattner wants this behind him

In his own statement, Steven Rattner expressed gratification that the legal battle was over and that the matter could be put behind him. While Rattner in no way admitted wrongdoing, he did apologize to Attorney General Cuomo for having extended the process of investigation of infractions involving the New York State Common Retirement Fund unnecessarily.

In November, the Securities and Exchange Commission reached a settlement with Rattner. At that time, he released $3.2 million being held from the pension fund and paid a related $3 million penalty.

According to records filed when he was appointed to head President Obama’s automotive task force in 2009, Rattner’s net worth was as high as $608 million.

Sources

New York Times

‘Justice will be done’

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