A pre-New Year’s Eve deal has been cut between investment big Steven Rattner and outgoing Attorney General Andrew Cuomo to settle charges stemming from Rattner’s role in the state pension fund scandal.
Rattner, who served as auto czar for President Obama and investment adviser to Mayor Bloomberg, will pay $10 million to the state and agree to a five-year ban on any dealings with the state pension funds.
For his part, Cuomo is dropping a pair of lawsuits that alleged Rattner had paid kickbacks to win a $150 million pension fund investment in the Quadrangle Group, the giant private equity firm founded by Rattner. In addition to hiring a politically-connected broker to handle the investment deal, Rattner lent some slapstick to the scandal by helping arrange a special DVD distribution deal for a goofy Grade B movie – “Chooch” – made by the brother of the former state pension investment director.
Cuomo’s suits, filed a week before Thanksgiving, sought much heftier sanctions: a $26 million fine and a lifetime ban for Rattner from the securities industry in New York.
In a statement, Cuomo said he is “gratified” to have reached a settlement. The governor-to-be said the deal “resolves the last major action of our multi-year investigation.”
Rattner also bit the bullet with a conditional apology, but offered no mea culpa: “I am pleased to have reached a settlement with the New York Attorney General’s Office, which allows me to put this matter behind me,” said Rattner in a statement issued through the AG’s office. “I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the Attorney General and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers.”
Cuomo’s far-reaching pension fund probe resulted in guilty pleas for eight people, including former state and city comptroller Alan Hevesi, and his political guru, Hank Morris. A total of $170 million was collected in restitution and fines from nineteen major investment firms and five individuals.