Steven Rattner, architect of the auto bailouts (which could cost taxpayers up to $100 billion) is leaving his post. He is a former partner of the private-equity firm Quadrangle Group. Rattner’s goal of a larger political career has been cut short for the immediate future. Rattner is a big fund-raiser for Democratic candidates; his net worth is at least $188 million and possibly as much as $620 million.
Quadrangle is involved in a probe by the New York State Attorney General into alleged kickbacks to New York State’s pension fund. Rattner leaves as Andrew Cuomo is stepping up the investigation. This could have complicated White House efforts to appoint Rattner to a bigger post. Rattner has been described as having arranged at least $1.1 million in pay-to-play money to middleman Hank Morris. Morris has been criminally charged. In addition, investigators believe that Rattner gave money to the producer of a low-budget movie (“Chooch”), who is the brother of the chief investment officer of the New York State pension fund, to access business with the fund.
Jack Fitzgerald, a dealer who was made to close showrooms, said Rattner failed to grasp the nature of auto retailing. “They’re cutting back services to domestic car buyers,” he said, referring to the decision to slash thousands of dealers. “The task force simply looked at the number of dealers Toyota had…without grasping what a dealer really does,” he said. “They just did everything wrong.”
Rattner worked to keep a low profile during his five months in D.C., rarely granting interviews. Rattner, on behalf of President Obama, personally demanded that GM’s chief executive, 32-year G.M. veteran, Rick Wagoner, step down. Later, Rattner handpicked GM’s new president. Wagoner is retiring with a $10 million package.
Cuomo is pushing Rattner to a settlement; Cuomo does not want to press criminal charges against Rattner. In a statement, Tim Geithner said that Rattner has decided to spend more time with his family.