Steven Rattner has resigned his position as head of the federal government's automobile industry bailout effort, as questions swirl about an ongoing investigation into a hedge fund he founded.
Rattner has received mostly positive reviews for his role as lead advisor to the Treasury Department's automobile task force. His efforts to restructure Chrysler Group LLC and General Motors Corp. by pushing them quickly through bankruptcy have won particular plaudits.
It was his role with the Quadrangle Group, however, that caused discomfort among policymakers and outside critics. New York Attorney General Andrew Cuomo has been investigating Quadrangle and a number of other financial firms' practice of paying middlemen known as placement agents to win contracts to manage pension funds. The Securities and Exchange Commission also has an ongoing investigation.
Mr. Rattner, who worked at the firm until joining the administration in February, arranged to pay one of these placement agents $1.1 million dollars, according to numerous reports. That agent has since been indicted in New York on charges of bribery. Neither Mr. Rattner nor his former firm have been charged with any crime or civil offense, but the New York Times reported that the firm faces potential civil charges and "is said to be eager to resolve the matter."
The Obama administration closely vetted Rattner before he was appointed to the auto industry advisory role and felt confident that he had done nothing wrong. But recent reports suggest that Cuomo's investigation has heated up in the past few weeks, raising questions about the timing of Rattner's decision to leave his post.
Rattner has received mostly positive reviews for his role as lead advisor to the Treasury Department's automobile task force. His efforts to restructure Chrysler Group LLC and General Motors Corp. by pushing them quickly through bankruptcy have won particular plaudits.
It was his role with the Quadrangle Group, however, that caused discomfort among policymakers and outside critics. New York Attorney General Andrew Cuomo has been investigating Quadrangle and a number of other financial firms' practice of paying middlemen known as placement agents to win contracts to manage pension funds. The Securities and Exchange Commission also has an ongoing investigation.
Mr. Rattner, who worked at the firm until joining the administration in February, arranged to pay one of these placement agents $1.1 million dollars, according to numerous reports. That agent has since been indicted in New York on charges of bribery. Neither Mr. Rattner nor his former firm have been charged with any crime or civil offense, but the New York Times reported that the firm faces potential civil charges and "is said to be eager to resolve the matter."
The Obama administration closely vetted Rattner before he was appointed to the auto industry advisory role and felt confident that he had done nothing wrong. But recent reports suggest that Cuomo's investigation has heated up in the past few weeks, raising questions about the timing of Rattner's decision to leave his post.
published July 14, 2009, 0 Comments
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