Is Car Czar Rattner Roadkill?

Here’s the latest story of conflicted interests in dealings between Wall Street and government: Rattner Involved in Inquiry on Fees. Stock Jockey gives his take.

Is Car Czar Rattner Roadkill?

StockJockey's avatar Courtesy of StockJockey at 1440 Wall Street

Is President Obama going to have to find a new Car Czar to impose his will on the unfortunate residents of the Motor City? The latest news to hit the Obama administration is not going to going over well in Michigan – and their disgust level might head off the charts once they read about the latest Bankster exposed:

Steven Rattner, the leader of the Obama administration’s auto task force, was one of the investment-firm executives involved with payments now under scrutiny in a state and federal investigation into an alleged kickback scheme at New York state’s pension fund, according to a person familiar with the matter.

A "senior executive" of Mr. Rattner’s firm, Quadrangle Group, met with a politically connected consultant about a finder’s fee, then the firm agreed to pay what became a $1.1 million fee after receiving an investment from the state pension fund, according to a Securities and Exchange Commission complaint against two former New York political officials and others.

The person identified in the complaint as a "senior executive" is Mr. Rattner, who co-founded Quadrangle, according to the person familiar with the matter. Neither Mr. Rattner nor Quadrangle has been accused of any wrongdoing. Mr. Rattner did not return calls for comment. WSJ

Fees paid to intermediaries that raise money for investment managers often look shady until you drill down deeper, and for now Rattner is innocent until proven guilty. Of course the Great Lake State might not see it quite that way, and I would imagine they have seen enough of the sharpies from New York flying in to Detroit Metro and telling them how to run their businesses.

Sure, incompetent managers ran General Motors into the ground, but they were not exactly crooks. But the role of a low budget movie called “Chooch” muddies the waters in this thriller:

The SEC alleges in its complaint that a meeting was arranged between the senior Quadrangle executive and a brother of New York’s then-deputy comptroller to discuss acquiring the DVD distribution rights to the low-budget film, “Chooch.” The deputy comptroller, now under indictment, and his brothers produced the movie.

Quadrangle agreed to acquire the rights for $88,841, and three weeks later the senior Quadrangle executive was told that Quadrangle would get a $100 million investment from the pension fund, according to the complaint. Quadrangle then paid the $1.1 million finders fees to a company affiliated with the political consultant, according to the complaint.

This transaction does not pass the smell test…but is par for the course, given what we have already seen out of Obama’s economic team.

Of course, Washington could add insult to Detroit’s injury, and make them watch this “Chooch”.

And as an added bonus, we finally have a story that might bring Andrew Ross Sorkin and Pinch Sulzberger to tears, given their endearment for the ex New York Times Journalist Rattner. I can’t wait to see how the cover this story if it blows up into something bigger.
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Chooch Shot Glasses
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