AG: Car Czar Paid Kickbacks In Pension Mess

Accused of directing improper payoffs to friends and associates of former comptroller Alan Hevesi

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    NEWSLETTERS

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    Steven Rattner

    The so-called 'Car Czar" Steven Rattner - who helped oversee the restructuring of GM - was charged in civil lawsuits with paying kickbacks to obtain $150 million in public pension investments at his former investment firm.

    Rattner, a founder of the Quadrangle Group, is accused of directing improper payoffs to friends and associates of Comptroller Alan Hevesi in order to get a piece of the New York State Pension investment pie, the lawsuits allege.  Rattner has long denied wrongdoing.  His firm Quadrangle has paid $7 million in fines and distanced itself from its former chief.

    "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" Attorney General Andrew Cuomo said in a statement.

    Former Comptroller Alan Hevesi, his longtime friend Hank Morris and others associated with the pension scheme have already agreed to plead guilty to criminal charges.  

    Cuomo in his lawsuits is seeking millions in fines as well as an injunction barring Rattner from the securities industry for life. 

    "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,” Rattner said in a statement.

    “This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity -- and I certainly did not violate the Martin Act. That’s why I intend to clear my name by defending myself vigorously against this politically-motivated lawsuit.”

    Cuomo''s office fired back at Rattner's claims of innocence.  "Mr. Rattner now has a lot to say as he spins his friends in the press, but when he was questioned under oath about his pension fund dealings he was much less talkative, taking the Fifth and refusing to answer questions 68 different times. Anyone who reads the extensive facts laid out in our Complaint will understand that Rattner’s claims that he did nothing wrong are ridiculous and belied by the fact that he is paying the SEC $6 million today."

    The Securities and Exchange Commission charged Rattner Thursday in connection with the kickback scheme.  Rattner agreed to pay a $6 million dollar fine and has agreed to be barred from the investment business for two years.

    "Rattner delivered special favors and conducted sham transactions that corrupted the Retirement Fund's investment process," said David Rosenfeld of the SEC's New York Office.