Rattner, the Big Fish of New York’s Pension Scandal, Settles with Cuomo

(January 3, 2011) – The biggest fish in New York state’s pay-to-play pension scandal has been caught – or, at least, has agreed to settle.

Steve Rattner, founder of asset management firm Quadrangle Group and President Obama’s “Car Czar”, has agreed to settle charges that he inappropriately gained access to the New York State Common Retirement Fund. According to the charges against him, Rattner and his firm paid upwards of $1 million in kickbacks to middlemen in order to garner $150 million in pension mandates for Quadrangle.

The $10 million settlement splits the difference (although slightly in Rattner’s favor) between the prominent private equity investor and incoming New York Governor Andrew Cuomo, who, as Attorney General, had previously demanded $26 million. In addition to the payment, Rattner has agreed to not appear “in any capacity” before public pensions in the Empire State. Cuomo had been looking to secure a lifetime ban from the securities industries, but failed to do so. Rattner, in a public statement, also denied any wrongdoing.

“I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult,” Rattner said in a statement. “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.”

Previously, Rattner paid $6.2 million to settle similar charges brought by the Securities and Exchange Commission. The Rattner settlements are just one in a long line of settlements, jail sentences, and scandal relating to the Common Fund.