New York accuses former ‘car czar’ Steven Rattner of paying pension kickbacks
Steven Rattner, who engineered the government’s bailout of the auto industry, was sued by New York state in a pension kickback case just as he settled similar federal allegations.
Two lawsuits filed Thursday by New York Atty. Gen. Andrew Cuomo accuse Rattner of paying state officials to steer investment work to his former private equity firm, Quadrangle Group.
The suits seek to permanently bar Rattner from the securities industry and to force him to pay at least $26 million.
The Securities and Exchange Commission, meanwhile, announced the filing and settling of its own suit against Rattner. The agreement calls for him to pay $6.2 million and not work as an investment advisor or broker for at least two years.
In a statement, Rattner called Cuomo’s suits against him politically motivated.
“I will not be bullied simply because the attorney general’s office prefers political considerations instead of a reasoned assessment of the facts,” he said. “I intend to clear my name by defending myself vigorously.”
The legal developments came as Rattner’s work to help turn around the auto industry was being vindicated. Shares of General Motors rose 3.6% on Thursday in their first day of trading after the company raised more than $20 billion, much more than initially expected, in an initial public stock offering.
Cuomo’s suits accuse Rattner of paying kickbacks to win $150 million in investments from New York’s public pension fund. The alleged kickbacks included more than $1 million given to a top political advisor of the New York state comptroller from 2003 to 2006, Alan Hevesi.
The state also accused Rattner of helping a relative of a staff member in the New York state comptroller’s office land a DVD distribution deal for a low-budget movie.
“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,” Cuomo said in a statement.
In April, Quadrangle distanced itself from Rattner as it reached settlements in the case with Cuomo’s office and the SEC. Hevesi pleaded guilty in October to criminal charges brought by Cuomo.
