New York Attorney General Andrew Cuomo has announced that his office settled with former White House Task Force "Car Czar" Stephen L. Rattner for $10 million. The agreement comes following charges that Rattner engaged in a kickback scheme involving New York's pension funds while he was an executive with Quadrangle Group.
Rattner, who oversaw the U.S. government rescue of General Motors and Chrysler in 2009 and shepherded the companies into bankruptcy, will also be barred from doing business with the State's pension fund for a period of five years as part of the agreement with Cuomo. The deal will settle two lawsuits filed in November against Rattner.
"I am gratified that we have been able to reach an agreement in this case, as it resolves the last major action of our multi-year investigation," Cuomo said in a statement. "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."
Mr. Cuomo will be sworn in as New York's governor on Jan. 1.
Rattner said in a statement: "I am pleased to have reached a settlement with the New York attorney general's office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the attorney general and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers."
[Image: Neilson Barnard/Getty] Rattner settled with the Securities and Exchange Commission last November, agreeing to "disgorge" $3.2 million related to the kickback accusations and pay a penalty of $3 million. He also accepted a two-year ban from certain Wall Street businesses. He did not admit or deny wrongdoing in that settlement either.
Mr. Rattner's alleged culpability in the kickbacks related to Quadrangle's paying off Hank Morris, a top adviser of New York State Comptroller Alan G. Hevesi, for his help in securing some of the pension fund's investment business. Hevesi resigned in 2006 after pleading guilty to charges of defrauding the government. On Oct. 7, 2010 Mr. Hevesi pleaded guilty to steering millions of dollars in state pension money to another investment firm, Markstone Capital, in return for kickbacks that included travel and other expenses, and campaign funds.
Rattner published a book earlier this year detailing the events surrounding the Federal bailouts of the GM and Chrysler, as well as Federal support for the automakers' finance subsidiaries and parts makers: "Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry." In the book, he claims to have not knowingly supported any kickback scheme, but acknowledges that an individual at Quadrangle he was responsible for hiring acted on his own. Rattner also said in his book, and in speeches since he left the Task Force, that Obama Administration officials were aware of the pension fund controversy when they chose him, as well as the fact that Quadrangle had dealings with former Chrysler owner Cerberus Capital.
Rattner, who oversaw the U.S. government rescue of General Motors and Chrysler in 2009 and shepherded the companies into bankruptcy, will also be barred from doing business with the State's pension fund for a period of five years as part of the agreement with Cuomo. The deal will settle two lawsuits filed in November against Rattner.
"I am gratified that we have been able to reach an agreement in this case, as it resolves the last major action of our multi-year investigation," Cuomo said in a statement. "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."
Mr. Cuomo will be sworn in as New York's governor on Jan. 1.
Rattner said in a statement: "I am pleased to have reached a settlement with the New York attorney general's office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the attorney general and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers."
[Image: Neilson Barnard/Getty] Rattner settled with the Securities and Exchange Commission last November, agreeing to "disgorge" $3.2 million related to the kickback accusations and pay a penalty of $3 million. He also accepted a two-year ban from certain Wall Street businesses. He did not admit or deny wrongdoing in that settlement either.
Mr. Rattner's alleged culpability in the kickbacks related to Quadrangle's paying off Hank Morris, a top adviser of New York State Comptroller Alan G. Hevesi, for his help in securing some of the pension fund's investment business. Hevesi resigned in 2006 after pleading guilty to charges of defrauding the government. On Oct. 7, 2010 Mr. Hevesi pleaded guilty to steering millions of dollars in state pension money to another investment firm, Markstone Capital, in return for kickbacks that included travel and other expenses, and campaign funds.
Rattner published a book earlier this year detailing the events surrounding the Federal bailouts of the GM and Chrysler, as well as Federal support for the automakers' finance subsidiaries and parts makers: "Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry." In the book, he claims to have not knowingly supported any kickback scheme, but acknowledges that an individual at Quadrangle he was responsible for hiring acted on his own. Rattner also said in his book, and in speeches since he left the Task Force, that Obama Administration officials were aware of the pension fund controversy when they chose him, as well as the fact that Quadrangle had dealings with former Chrysler owner Cerberus Capital.
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