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?