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Steve Rattner: April 2009

Cuomo Charges Dallas Money Manager, Says NY Pension Scammers Are Part Of A "National Network"

Moe Tkacik | April 30, 2009, 4:00PM

New York AG Andrew Cuomo added a new name to the growing list of indictments in the New York Pension Fund scandal: Saul Meyer, the (youthful-looking) 38-year-old founder of the private equity fund Aldus Equity. Meyer won't be the last, Cuomo assured reporters at a press conference announcing the charges today:

"I believe we are disclosing a national network of actors who often acted in concert and did this all across the country," Mr. Cuomo said. "They collaborated, they often partnered and victimized states and taxpayers across the country. It's also an ongoing scam."

We said as much yesterday, when we showed you how a key figure in the pension scandals in New Mexico and New York was a direct descendant-in-law of a key figure in a California pension scam of the nineties. And we told you about Aldus, a key name linking the New York fraud to a suspected scheme to scam the teachers' retirement fund in New Mexico and possibly other public pension funds, last week.

Aldus's usual business was advising state pension funds on private equity investments. But it went a step further in New York, using its access to the pension's billions to arrange a $375 million investment to create its own private equity fund. The idea was hatched by Hank Morris, the top adviser to former state comptroller Alan Hevesi who is charged with defrauding the pension fund in a scheme to collect phony "finder's fees." According to the indictment, Aldus paid Morris about $320,000 to secure itself a $375 million investment from the pension fund. Not bad for a private equity firm that, according to this Dallas Business Journal puff profile that ran (all of) two months ago: "started in 2003 with no clients."

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Aldus Equity, All Muck is Local, Andrew Cuomo, Barrett Wissman, Bill Richardson, CalPERS, Calpers, Saul Meyer, Steve Rattner

Steve Rattner

If Steve Rattner's Scandal Sounds A Lot Like Bill Richardson's, There's A Reason For That

Moe Tkacik | April 21, 2009, 11:24AM

It may not be sexy like Kwame's sexting, or Larry's bathroom stall rendezvous, or Foggo's prostitutes in hot tubs, but for sheer scale of conspicuous muck, the state pension fund scandals bubbling up around the country are in a league of their own. And while it may be hard for you to get your head around as fundamentally dry a subject as state pension funds, the underlying alleged wrongdoing is same as it ever was: billions of dollars in state business steered to politically connected firms, kickbacks, and taxpayers left holding the bill.

You don't have to scratch too far beneath the surface to find the same patterns--and sometimes the same players--emerging from state to state.

Let's start with Obama car czar and billionaire money manager Steve Rattner. Last Friday the Wall Street Journal reported that Rattner was the money manager referenced in an SEC indictment in a pay-for-play scheme run by the top adviser to the former New York State Comptroller that allegedly siphoned more than $30 million off asset managers seeking investments from the state pension fund.

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Bill Richardson, Municipal finance, Steve Rattner

Steve Rattner

Did Steve Rattner Really "Cover" The Chrysler Bailout For The Times?

Moe Tkacik | April 17, 2009, 5:56PM

Before he was linked to the expansive New York pay to pay probe for paying shady "finder's fees" to steer $100 million in pension money to his private equity firm, Obama "car czar" Steve Rattner was controversial for a more straightforward reason: there was something of a deficit of evidence he knew anything about cars.

Having spent most of his lucrative financial career investing in and advising media companies, Rattner's automotive experience appeared limited to two things: first, his private equity firm Quadrangle made a bad loan to the private equity firm that owns Chrysler to make an investment in Maxim magazine that managed to reap worse returns than the ailing automaker. And secondly, there was the fact that Rattner had, as NPR and other news agencies reported, covered the Chrysler bailout as a reporter for the New York Times in 1979. NPR even quoted from a story he had written on the bailout, and the Wall Street Journal subtly emphasized that bailout's significance in Rattner's career in a profile that ran earlier this month:

Roger Altman, a Wall Street financier who was the Treasury Department's point man during the first Chrysler bailout in 1979, says Mr. Rattner is well-suited for his new job.

"Steve has a brilliant grasp of finance, and that is the single-most important ingredient here," said Mr. Altman, a longtime mentor who lured Mr. Rattner to Lehman Brothers in 1982.

We'd better hope Altman is right about that.

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Steve Rattner

Steve Rattner

Did Auto Czar Steve Rattner Help Scam New York Pensioners?

Moe Tkacik | April 17, 2009, 2:12PM

Steve Rattner, the money manager who is Obama's top adviser on bailing out the auto industry, is uncomfortably close to a criminal investigation into the New York state pension fund, newspapers reported today.

In October 2004 Rattner, the private equity investor and former New York Times reporter who is leading (if not quite the "czar" of) the Obama administration's task force to save the auto industry, met with David Loglisci, the recently-indicted chief investment officer of the New York General Pension Fund to solicit an investment in his private equity fund Quandrangle, according to news reports in today's New York Times and the Wall Street Journal. By January Rattner's fund had allegedly signed a written agreement to give a 1.1% cut of whatever investment Quadrangle received from the fund to Henry Morris, the (also recently indicted) former aide to the disgraced former state comptroller Alan Hevesi. A few days later, as if to sweeten the deal, Rattner agreed to meet with Loglisci's brother and wound up investing $88,841 for the DVD distribution rights to a movie that had grossed barely a third of that during its brief release in theaters through a Quadrangle affiliate called GT Brands. (The brother produced the movie, Chooch.) Three weeks later, Loglisci the CIO "personally informed" Rattner that Quadrangle would be getting a $100 million investment from the pension fund -- and over the next two and a half years Morris would in turn collect over a million dollars in "finders fees" for the transactions.

Those, at least, are the allegations of a lawsuit filed Wednesday by the SEC against Morris, Loglisci and two of their associates in the latest development in the protracted pay-to-play probe of New York state pension funds. The lawsuit only makes reference to a "Quadrangle executive" but the Times and the Journal quote sources confirming the executive is Rattner. Both papers also specify that Rattner is not himself a target of the probe, and that he told the administration about the investigation when he took the job.