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Throw the Book at Steven Rattner

Posted by Larry Doyle on March 11, 2010 9:31 AM |

Does crime pay on Wall Street?

When those implicated in ‘pay to play’ schemes on Wall Street are not dealt with in truly appropriate fashion, everybody loses. Why? We end up with a loss of confidence not only in the markets, but even moreso a loss of confidence in our judicial system. I am not so naive as to think that our fields of justice are level, but that doesn’t mean we should not pursue that goal and highlight inequities when and where we see them.

Those engaged in financial crimes or schemes including ‘pay to play’ should never be able to buy their own justice by writing a check. That system of justice will never truly dissuade those engaged in or attracted to ‘pay to play.’

I see a strong sign of just such a potential inequity this morning. It smells.

The Wall Street Journal highlights that former Obama car czar, Steven Rattner, is in the midst of settlement talks with New York Attorney General Andrew Cuomo over his role in a ‘pay to play’ scheme. The WSJ writes, Rattner in Talks to Settle a Probe:

Wall Street financier and former auto czar Steven Rattner is in settlement talks to resolve his role in the “pay to play” investigation at the New York state pension fund, according to people familiar with the matter.

A guilty plea on Wednesday by David Loglisci, the former chief investment officer of the $129 billion fund, turned a spotlight on Mr. Rattner, a well-known Wall Street player who last year spearheaded the Obama administration’s auto overhaul.

On a call with reporters, New York Attorney General Andrew Cuomo said the 57-year-old Mr. Rattner remained under investigation but declined to provide more details.

A spokesman for Mr. Rattner declined to comment.


For months, Mr. Rattner’s lawyers have been engaged in protracted settlement discussions with both the New York attorney general and the Securities and Exchange Commission over his conduct in the case, said the people familiar with the matter. Defense lawyers Jamie Gorelick and William McLucas of Wilmer Hale in Washington are representing him in the talks, these people added.

Mr. Cuomo’s investigation of Mr. Rattner focuses on his activities at Quadrangle Group, the private-equity firm he co-founded a decade ago. The New York-based firm obtained a $100 million investment from the New York pension fund three weeks after a DVD company owned by Quadrangle agreed to distribute “Chooch,” a low-budget movie co-produced by Mr. Loglisci and his brother, according to court papers.

Quadrangle also paid a $1.1 million finder’s fee to Hank Morris in exchange for securing the investment from the New York fund. Mr. Loglisici said Wednesday he had “effectively ceded” his authority over the fund’s private-equity investment decisions to Mr. Morris, a former top New York political adviser.

How tough is Steve Rattner? By reputation, Rattner is viewed as one of the meanest SOBs to run between Wall Street and Washington. In fact, Rattner is believed to be the individual implicated in directly threatening Chrysler creditors in the midst of the Chrysler bailout a year ago. (Read my piece,¬†“Is Barack Obama Going Tony Soprano?”)

White collar crime of this nature needs to be adjudicated in terms of hard time — not by writing a check.

Rattner is obviously entitled to due process, but if, in fact, Rattner is implicated in this ‘pay to play’ scheme (the fact that he is in protracted settlement talks seems fairly incriminating), then the courts should throw the book at him and everybody else involved.

Rattner may not be all that tough sitting in the can being eyeballed by his new ‘friends.’

Unless and until that happens, this cesspool of activity and those swimming in it will continue to smell and pollute all of us.

What do you think?


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  • Aaron Kramer

    Go after him with vigor, but like all members of the ruling class he will get nothing more than a slap on the wrist. After his punishment the articles about how he saved GM and Chrysler will be published in the NYTimes, and Washington Post. This will begin the process of rebuilding his public name so he can continue to get government business.

  • Bob Friend

    The company is now run by Mr.Whitacre(knows nothing about automobiles) and just appointed Mr. Reuss to be President who is no better than previous presidents.I am a 60 year customer of GM, starting in 1949, with Pontiac, Buicks, Oldsmobiles thru 1985.Note-most GM cars were designed with bench padded seats and flat backs ,although some were bucket padded seats, like the 1977 Omega Brougham Oldsmobile(MOST COMFORTABLE) designed by Fisher Body. In 1986 GM got rid of Fisher Body.They made them a different way.I owned 1985 Delta 88 Royale Oldsmobile.1988 I wanted to trade for new one. It was bench HARD seat. After 35 years of consistentcy-GM changed for the worst!A few years later-Olds was dead.Cadillac had not been touched. But by 2000-all GM cars were bucket hard seat,configured back. MOST UNCOMFORTABLE!! Customers like me were chased away and either bought competition or old GM cars. I now own 3 1993 Cadillac Sedan Devilles- bench padded seats/flat backs.VERY COMFORTABLE.I wrote Mr. Whitacre about this-two months ago. Nothing will happen-because guys like Bob Lutz(who doesn’t like cushy seats)have been advising him in the wrong direction.He will retire in May-did you read his comments.He feels his” designs will keep GM in the right Direction”. Sit in the CTS CADILLAC and 1993 SEDAN DEVILLE CADILLAC- compare the comfort. See for yourself.

  • Bill

    I predict nothing will happen to Rattner, given his connections with the Obama administration. Note one of his attorneys is Jamie Gorelick, one of the nomenklatura of the Democrat power machine. (I prefer Democrat rather than Democratic, because Democrats are not Democratic). These people are above the law, which has no application to them. Just look at Daschle, Geithner, Rangel in the context of failure to declare income. If an ordinary hand had done something like they did, he would have been down on one knee in front of a federal judge trying to stay out of jail.

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