Steven Rattner was on verge yesterday of settling charges for his role in a pension corruption scheme when the Securities and Exchange Commission suddenly postponed the vote to accept the settlement. Rattner, the former head of the U.S. Auto Task Force, was facing a $6 million settlement and a two-year disbarment from the securities industry when the vote of the five commissioners was dropped from the SEC’s calendar.
Neither the reason for the postponement nor a new date for the vote are known.
Rattner is still the target of a probe by New York Attorney General Andrew Cuomo for his role in a kickback scheme at private equity giant Quadrangle Group LLC. Rattner left the auto task force as Cuomo’s probe intensified.
So far, Cuomo’s long-running investigation has prompted other states to begin similar probes and crackdown on placement agents, brokers who exploit political ties to reap millions of dollars of fees from investment companies that want to manage the public’s money.
Cuomo has recouped more than $100 million for the New York pension fund and captured seven guilty pleas, most recently from the former state comptroller Alan Hevesi.
The former Democratic comptroller pleaded guilty to a felony for getting the benefit of hundreds of thousands of dollars of political donations and fees paid to a lobbyist and free luxury trips to Italy and Israel.
New York’s comptrollers are the sole trustees of the state’s $132 billion pension fund.
The SEC and Cuomo have suggested that Rattner improperly paid off a political operative to win the lucrative business of investing some of New York’s pension fund.
The practice of making political contributions to pension fund officials to win investment contracts is also known as “pay-to-play.”
Investigators alleged that Quadrangle won a $100 million investment from the state pension fund by engaging in improper “quid pro quo” arrangements.
They said this involved agreements to pay more than $1 million in “finder” fees to Henry “Hank” Morris, a former top adviser to Hevesi, and distribute a DVD of the film “Chooch,” produced by former Common Retirement Fund chief investment officer David Loglisci, who later plead guilty.
In April, Quadrangle agreed to settle with the New York attorney general and the SEC.
At the time, Quadrangle said: “We wholly disavow the conduct engaged in by Steve Rattner… That conduct was inappropriate, wrong and unethical.”