Quadrangle Group LLC, a private-equity firm that was co-founded by the now-former car czar that was appointed by President Obama, Steven Rattner, has settled an investigation by New York Attorney General Andrew Cuomo. The investigation resulted in the firm being faced with $7 million in settlements.
According to a report by The Wall Street Journal, the investigation into the firm’s actions regarding its pension fund have resulted in a total of $7 million in settlements, along with Quadrangle publicly placing blame and disdain towards Rattner for his role in the company.
“We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. That conduct was inappropriate, wrong, and unethical.”
The investigation was based on the premise that Rattner hired Morris on grounds outside of merit, suggesting instead that he was hired as a form of kickback. According to Bloomberg, the investigation showed that Rattner paid Morris, who has ties to then-New York state comptroller Alan Hevesi, roughly $1.1 million in finder fees out of the $100 million investment intended for the pension fund.
Rattner did not agree with the statement by his former firm, and his attorney released a statement clarifying his position. “Mr. Rattner shares with the New York Attorney General the goal of eliminating public pension fund practices that are not in the public interest,” said Jamie Gorelick, Rattner’s attorney. “He looks forward to the full resolution of this matter.”
According to Reuters, investors had a legal right to halt any new investments into the fund once Rattner left the firm in 2009 to take the post of car czar for the Obama administration. But despite their right to stop investments, Quadrangle won the overall vote of confidence from its investors.
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