The former investment company executive now heading the US treasury’s autos task force is under investigation in a state and federal inquiry into an alleged kickback scheme at New York state’s pension fund, media reports said.
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Steven Rattner was one of the investment company executives involved with payments now under scrutiny, the Wall Street Journal (WSJ) reported.
Citing an anonymous source, a “senior executive” of Rattner’s Quadrangle Group, identified in a US Securities and Exchange Commission complaint against two former New York political officials and others, is Rattner himself, the WSJ said, according to Reuters.
The “senior executive” met with a politically connected consultant about a finder’s fee, then the firm agreed to pay what became a US$1.1m fee after receiving an investment from the state pension fund, the complaint said, according to the WSJ’s report.
Neither Rattner nor Quadrangle has been accused of any wrongdoing, the Journal added.
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By GlobalDataQuadrangle declined to comment to Reuters on the report, as did a treasury spokesman.
However, when asked whether the Obama administration knew of Rattner’s role in the investigation, he said: “During the transition Mr Rattner made us aware of the pending investigation.”
Sources “familiar with the investigation” told Reuters earlier this week several investment firms were being scrutinized over whether they made improper payments to intermediaries to gain business from New York state’s pension fund.
The inquiry by New York attorney general Andrew Cuomo and the SEC reportedly includes The Carlyle Group, one of the world’s biggest private equity firms.
Reuters said Henry Morris, the former New York state comptroller’s top fund-raiser, and David Loglisci, the state’s pension investment chief, were last month charged with taking millions of dollars in kickbacks from money manager firms.
The main legal issue for the investment firms turns on whether they knew, or should have known, that fees they paid to certain entities for access to the New York fund were legitimate or were improper kickbacks, and whether they were properly disclosed, sources told the Wall StreetJournal.
Rattner co-founded Quadrangle in 2000 but left earlier this year to lead head the government task force restructuring General Motors and Chrysler.
