Streams

Reports Say Former Car Czar Has Reached a Settlement with SEC

Thursday, October 14, 2010

WNYC

Steven Rattner, the man who oversaw the Obama Adminsistration's turnaround of the auto industry, has been having a pretty busy week. His book about the turnaround came out and according to reports from The New York Times, he’s apparently reached a settlement with the Securities and Exchange Commission over his role in a large and long-standing pension fund kickback scheme. New York Times reporter Louise Story discussed the reported settlement.

Remind us what this whole scheme is all about.

This is this long-running investigation at the New York state pension where basically private equity firms like the one Mr. Rattner used to run paid bribes or made campaign contributions to the state comptroller in order to get the state pension fund to put money in their private equity fund.

So we reported last week on New York state comptroller Alan Hevesi who accepted these gifts. He admitted his guilt. He’ll be sentenced in December. Is this all part of this one investigation?

That’s right. So Steve Rattner who’s expected to settle this week, he is accused of funding this low budget movie that was connected for someone who worked for Hevesi. It’s the same scheme. You know what’s notable about Steve Rattner is he is the highest profile person from Wall Street to get wrapped up into this investigation. And not only is he high profile on Wall Street. He’s high profile in national politics. He was the Car Czar under the Obama administration. He and his wife Maureen White are major Democratic donors. And here in New York, they’re very close friends with Michael Bloomberg. The mayor -- just this week, you mentioned Steve’s book -- Mayor Bloomberg was co-hosting a book party for Steve Rattner a few nights ago.

The major players in this: we have the Attorney General's office and the SEC. They’re not speaking yet, but your reporting suggests a settlement is imminent. Tell us what you know about that.

The SEC has reached a deal with Steve Rattner which would ban him from the security’s industry for a few years. He would also pay a $5 million fine, approximately. Attorney General Cuomo’s office is still negotiating with him. So that’s the one we’re kind of waiting on. What I heard really late last night is that that one was not done. And so the settlement might be done tomorrow because often the SEC and the attorney general announce things at the same time.

Is everyone in this case sort of “Let’s make a deal” here? I mean, Alan Hevesi, the former comptroller of New York state, he’ll be sentenced in December. He admitted guilt in this case and it’s a felony, but he may not even face jail time?

Well, you know, Andrew Cuomo is running for governor here and his office has been pushing very hard to wrap up some of their highest profile investigations and this is certainly one of them. That’s part of the push and you know, Steve Rattner, he actually had this same deal on the table last spring. The SEC offered him to settle because his private equity fund settled last spring. But he refused. He did not want to be banned from the industry, but he’s kind of come around now and accepted that.

So do you think Rattner has any immunity from prosecution?

He does. There’s an interesting twist. Several years ago when this started, he supplied information to the attorney general’s office that showed that he was not personally involved in this alleged bribe transaction. And because of that, he got some immunity from Cuomo’s office. However, it came out later that he was directly involved, according to Cuomo’s office. So now, he could even face a perjury charge, which would be a criminal charge. However, if he negotiates this settlement, it’s possible that Cuomo’s office will move on and let it be, if he agrees to certain fines that they want or whatever provisions they’re seeking.

Tags:

More in:

News, weather, Radiolab, Brian Lehrer and more.
Get the best of WNYC in your inbox, every morning.

Leave a Comment

Register for your own account so you can vote on comments, save your favorites, and more. Learn more.
Please stay on topic, be civil, and be brief.
Email addresses are never displayed, but they are required to confirm your comments. Names are displayed with all comments. We reserve the right to edit any comments posted on this site. Please read the Comment Guidelines before posting. By leaving a comment, you agree to New York Public Radio's Privacy Policy and Terms Of Use.

Sponsored

Latest Newscast

 

 

Support

WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public

Feeds

Supported by