Rattner, Obama's Auto Chief, Caught Up in Kickbacks Probe

Source says Rattner linked to pension fund pay-for-play deal
By Rob Quinn,  Newser Staff
Posted Apr 17, 2009 5:52 AM CDT
Steven Rattner, seen here in a 2006 file photo, is involved in an SEC probe of improper payments in exchange for investments from New York's pension fund.   (Getty Images)
camera-icon View 2 more images

(Newser) – Steven Rattner, the head of President Obama's auto task force, is involved in an SEC probe of a kickback scandal involving New York state's pension fund, a source tells the Wall Street Journal. Rattner is not accused of any wrongdoing, but is believed to have directed a $1.1 million payment from his private equity firm Quadrangle to an intermediary who steered an investment of $100 million from the fund Quadrangle's way.

The SEC alleges that a Quadrangle executive—who the source says was Rattner—also arranged for the firm to invest $90,000 in Chooch, a low budget-film being made by the deupty comptroller's brother-in-law, shortly before Quadrangle received the pension investment and paid the "finder's fee."  Both the comptroller, Alan Hevesi, and his producer-brother-in-law have been indicted for bribery and money laundering. A Treasury spokeswoman said Rattner had informed them of the ongoing probe during the transition period.