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NYC Probes Rattner's Firm in Pension Scandal
Quadrangle paid finders fees to indicted adviser's company
By Jason Farago
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Posted Apr 22, 09 9:49 AM CDT
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(Newser)
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New York City authorities are investigating whether Quadrangle Group, formerly led by Obama car czar Steven Rattner, deceived managers of the city's pension funds, the Wall Street Journal reports. Rattner's firm, Quadrangle, paid finders fees to Searle & Co., which had been headed by now-indicted political adviser Hank Morris, for $85 million in city employee pension investments. Morris is accused of taking kickbacks in exchange for access to the pension funds. The SEC is already investigating.
Although no charges have been filed against Rattner, the allegations have imperiled the future of his small investment firm. With Rattner in Washington, investors may pull out of Quadrangle and could cost the firm $16 million in annual fees. New York's is not the only pension fund with which Quadrangle had dealings; Morris helped Quadrangle secure $20 million from New Mexico's fund, and the son of Sen. Jeff Bingaman, with whom Rattner is said to have developed ties, worked at the firm for years.