Reports: Ex-Car Czar Reaches Settlement With SEC

The New York Times is reporting that Steven Rattner, the Obama administration's former car czar, has agreed to a settlement with the Securities and Exchange Commission over a kickback investigation involving the New York state pension fund. For more on the story, NPR's Melissa Block talks to Times reporter Peter Lattman.

Copyright © 2010 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MELISSA BLOCK, host:

The New York Times is reporting a settlement between Steven Rattner, President Obama's former car czar, and the Securities and Exchange Commission. The settlement is over kickbacks involving the New York state pension fund. News is that Rattner will accept a multi-year ban from the securities industry. He will also pay a fine of about $5 million.

New York Times reporter Peter Lattman is covering the story. And, Peter, this is a really convoluted case. Why don't you talk us through what Steven Rattner is agreeing to settle here?

Mr. PETER LATTMAN (Reporter, New York Times): Sure. So, Mr. Rattner's settlement is related to conduct in getting investments from the New York state pension fund, which is one of the largest pension funds in the nation with about $125 billion.

So, Rattner, along with the handful of other investment firms, had been accused of basically engaging in corrupt conduct, making kickback payments to, you know, political officials to secure investments and business from the state. And Rattner is probably the highest profile investment manager to be ensnared by this investigation, which has been conducted by not only the SEC, as you mention, by also the New York state attorney general.

BLOCK: Right. And this pension scandal recently also brought a guilty plea from the former New York state comptroller Alan Hevesi.

Mr. LATTMAN: That's right. So there's been, I believe, seven guilty pleas in the case and millions of dollars of fees. I mean, let's not forget, Rattner is not the only private equity investor, big money manager, you know, have gotten caught up in this thing. There's Carlyle Group, which is a very prominent Washington, D.C.-based private equity firm, and there's another firm up here called Riverstone.

So Rattner - although he's the highest profile - this has been a wide-ranging investigation that's about three years old now.

BLOCK: Let's talk a little bit more, Peter, about Steven Rattner. He is a big Democratic donor, an adviser to New York's mayor, Michael Bloomberg, also has written a new book on the auto industry.

Mr. LATTMAN: That's right. So he just published a book about his experiences as the car czar called "Overhaul." And last night in New York City at The Four Seasons Restaurant, there was a book party hosted by Mayor Bloomberg in which, you know, the most powerful New York elite in the world of media and Wall Street came out to celebrate Rattner.

And you had everyone from Bob Rubin, the former Treasury secretary, to Jamie Dimon, the head of JPMorgan - they were all there. And Rattner spoke - and it was quite, you know, a fancy and well-attended party. And then the next day, he's engaged in the settlement talks and he's reached a deal with the SEC. So it's all kind of surreal.

BLOCK: And the deal with the SEC doesn't end it, right, for Steven Rattner. There would still be an investigation by New York's Attorney General Andrew Cuomo.

Mr. LATTMAN: That's right. So our understanding is the talks with the attorney general are ongoing, and they might reach a settlement soon. All we know for now is that the settlement has been struck with the SEC.

But, yes, the conversations with Attorney General Cuomo's office are still taking place, and it's unclear how those are going to shake up.

BLOCK: Okay. New York Times reporter Peter Lattman, thank you very much.

Mr. LATTMAN: Thank you.

BLOCK: Peter Lattman with the news that Steven Rattner, President Obama's former car czar, has reached a deal with the Securities and Exchange Commission involving kickbacks to the New York state pension fund. He will be banned from the securities industry for multiple years and pay a fine of about $5 million.

Copyright © 2010 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.