What’s a “Chooch” worth? More or less than a quick payday loan or debt consolidation?

Ray Werb writes for Jalopnik that Steve Rattner, President Obama’s “car czar” who has been tasked with leading the Obama administration’s efforts to restructure the auto industry, has been named in an SEC investigation. He’s looking like such a chooch right now…

OK, what’s a chooch?

According to UrbanDictionary.com, chooch is a term “derived from the Italian word ciuccio. It is a derogatory term referring to an irritating, less than intelligent person. But what does this have to do with Rattner? More than you might think.

You see, Mr. Rattner is in charge of an investment firm called the Quadrangle Group. According to the SEC, his investment firm paid more than $1 million for the distribution of a movie named “Chooch” in exchange for New York State pension business.

The SEC complaint describes steps Rattner took to win $100 million worth of business from the pension fund in 2005. According to Werb, “that amount accounted for nearly five percent of a Quadrangle private equity fund and helped the company raise money from other investment funds.” What follows is a depiction of events from the New York Times‘ “DealBook” blog:

In October 2004, (Rattner) met with Mr. Loglisci to seek the pension fund investment and Mr. Loglisci “reacted favorably” and “began taking the necessary steps to secure approval” for the investment, the complaint said.

Two months later, in December, the same executive met with Mr. Morris, who, according to prosecutors, was working in tandem with Mr. Loglisci to generate millions of dollars in fees from the investment firms, and within weeks had agreed to a deal to pay an obscure securities firm that employed Mr. Morris 1.1 percent of any money that the retirement fund invested with Quadrangle, as a placement agent fee. That worked out to $1.1 million, of which Mr. Morris received 95 percent.

The timing of the meeting with Mr. Morris was significant, the complaint indicated, because the Quadrangle executive had already met with Mr. Loglisci and would presumably not need a placement agent. In addition, Quadrangle had previously retained a separate placement agent.

The executive also met with Mr. Loglisci about a low-budget movie Mr. Loglisci was producing, “Chooch.” Soon afterward, GT Brands Holdings, a company owned by one of Quadrangle’s private equity funds, made a deal to acquire the DVD distribution rights to “Chooch,” an agreement that made the film’s producers nearly $90,000.

Pay for play

Rattner agreed to help fund “Chooch” in order to get his. Now he’s facing federal investigation – and yet another Obama appointee is garnering bad press. The tag line of “Chooch” is appropriate here:

In the neighborhood of Bocci Park, Queens, God forbid you mess up and someone gives you a nickname. It can stick with you the rest of your life.

If Rattner is convicted of wrongdoing, he’ll be Steve “Chooch” Rattner for the rest of his life for sure.

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The United States government has already shelled out massive cash advance loans to players in the U.S. auto industry to keep them solvent. And after gorging themselves, GM and Chrysler are asking for seconds. Will President Obama continue to fatten up the insatiable on the taxpayers’ money? Surely someone else needs to take the reins of the auto industry if the problems are to be fixed, yes?

That isn’t going to happen yet. John Hughes reports for Bloomberg that President Obama decided not to name a “car czar.” What will happen for now is that Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers will head a task force on how to fix the industry. Early word on Geithner – tax snafu aside – has not been positive, so I’m not sure whether this decision fills me with confidence.

Pressure to name a “main man”

According to Hughes, President Obama was “under pressure to say who would handle the issue before tomorrow, when General Motors Corp. and Chrysler LLC must give progress reports on plans to restructure as a condition of $17.4 billion in U.S. Treasury loans.” One thing that’s positive: those two diseased behemoths aren’t dictating policy here.

Geithner will be the next best thing, for now. It will be within his power to recall any monetary aid if the automakers fail to show they have a sound profit plan by March 31. That is without the expectation of further advances of cash to stimulate their bottom line.

Driving into the future without cash advance

Five Democrats in the Senate, including Michigan’s Debbie Stabenow, have urged the president to appoint a manufacturing expert to the auto industry oversight panel. The reasoning behind this, as Stabenow explained, is that “This advisory group provides a tremendous opportunity to bring together our country’s greatest manufacturing leaders to help our domestic automakers create the vehicles and technology of the future.”

Do the current auto industry leaders have the ability to drive the American automobile industry into the future? Most see them as the joyriders who ran the industry through the guard rail in the first place. They cry for cash advance loans now, and they still want more. Their history of unwise spending and production has created a huge mess. I say President Obama takes over, whether it’s through a “car czar” or some other means. The usual suspects should not run this asylum.

Related articles

• REPORT: Obama dropping “car czar” in favor of task force (autoblog.com)
• Obama drops plans to name a single car czar to oversee the restructuring of GM and Chrysler. (slate.com)

House Approves $14 Billion Bailout

Big 3 Auto Makers Bailout

The $14 billion bailout proposal was sent to the House of Representatives tonight in order for the House to cast its vote. The bill passed 237 to 170, but a majority of the support came from the Democrats.

Only 32 Republicans voted in favor of the bailout, eight of which are from Michigan. Seven additional Republicans in favor of the bailout were also from Midwestern states that are home to automobile plants. Besides the Republicans from states directly tied to the auto manufacturers, there was little right-wing support for the measure. It’s going to take more than a couple payday loans to get this problem out of the gutter.

Checks and Balances—Senate Could Kill Bailout Measure

The House approved the bailout, but opposition from the Senate could kill the bill. It’s obvious that Democrats in the House are in strong favor of the bailout, but the majority of Republicans in the House and Senate are in strong opposition of the bailout. Republicans, along with some Democrats, in the Senate argue that the bailout will not solve the issues that plague the auto industry.

What is the Purpose of the Bailout?

A lot of media attention has been given to the auto bailout in recent times. However, the proposal keeps changing, and people are confused about the bailout’s purpose. The most current proposal is a $14 billion bailout designed for two of the three big auto makers. The $14 billion is much less than the original request, and the bailout would now help prevent only Chrysler and General Motors from going into bankruptcy. Ford Motors claims that it has enough money to stay afloat for now, while Chrysler and General Motors allege that they are merely weeks from going bankrupt.

A Temporary Solution

The bill would create a temporary remedy until the new Congress and President-elect Barack Obama can develop a more permanent solution. The bill calls for strict oversight of Chrysler and General Motors: the company executives would have pay limits and would be forced to get rid of the aircraft they used to transport to previous Congressional hearings. George Bush will also appoint a “car czar” that has the power to recall the loans within 30 days if the auto makers are not cutting their costs enough.

Bailout Is Now Up To The Senate

The fate of the auto bailout is yet to be determined. The House of Representatives and President George W. Bush have given their support, but it is now up to the Senate whether or not the measure will pass. The Republicans in the Senate believe that instead of being a temporary solution for the auto industry, the bailout is simply prolonging the inevitable—the collapse of the big three American auto makers. The future of the American auto industry relies on the Senate vote; it will take 60 Senate votes to pass.

Choose Your Own Fate

Aren’t you glad that your financial future isn’t up to someone else’s vote? If you need a financial bailout or a temporary financial solution, you are at liberty to get extra money when you need it. Payday loans can do for you what the House is hoping the bailout will do for the auto industry: give your current financial situation a little boost until you can get back on your feet.