Steve Rattner and Andrew Cuomo Continue Face-Off

(November 23, 2010) — Steven Rattner, co-founder of Quadrangle Group LLC, has said the pension lawsuit by New York Attorney General Andrew Cuomo in New York is “close to extortion.”

On Monday, Rattner, who last week called Cuomo a “bully,” told talk show host Charlie Rose that the attorney general had issued “threats” against him and filed a “politically motivated” $26 million lawsuit against him on the basis of emotions as opposed to facts. Furthermore, he questioned whether the soon-to-be New York governor has the right attributes to even hold an elected office.

Last week, Rattner agreed to pay $6.2 million and accept a two-year ban to settle a probe by the US Securities and Exchange Commission over an influence-peddling scandal in connection with the $124.8 billion New York State Common Retirement Fund. The same day, Cuomo sued Rattner, seeking $26 million for allegedly paying kickbacks to win investment business for his firm from the New York state pension fund. Additionally, Cuomo seeks to ban Rattner from the securities industry. According to an SEC complaint filed in Manhattan federal court, in 2005 and 2006, Rattner and Quadrangle won $150 millions in investments from the New York state pension as a result of a pay-to-play scheme.

Following Cuomo’s suits, Rattner denied wrongdoing, saying that he intended to clear his name “by defending myself vigorously against this politically motivated lawsuit,” he said. “While settling with the SEC begins the process of putting this matter behind me,” he told ABC News. “I will not be bullied simply because the Attorney General’s office prefers political considerations instead of a reasoned assessment of the facts.”

In the wake of its bruised reputation as a result of its association with New York state’s public pension, Quadrangle is reportedly planning a top-to-bottom overhaul, including a new name, new leadership and a new investment focus, the New York Post reported.