Media humming about Rattner’s departure from auto task force

By Ric Bohy

July 15, 2009 at 8:00am

When Treasury Secretary Tim Geithner announced Monday that Steven Rattner, the former reporter turned Wall Street financial whiz, was stepping down as head of the Obama administration’s auto task force for the usual “spend more time with his family” reasons, he left political junkies and the press parsing words and deeds for a more credible cause.

Key to the armchair analyses is Rattner’s well-known ambition of a more lasting place among Washington’s power elite, perhaps in the Treasury Department or the White House itself. His departure from the task force just days after General Motors emerged from bankruptcy and weeks after the Chrysler Group did the same, would seem to throw a hook into whatever loftier goals he might have had.

Rattner himself isn’t offering any alternative reasons for his resignation, nor is the administration. But, according to Reuters, it comes at a time when New York Attorney General Andrew Cuomo is “intensifying” his investigation into the Quadrangle Group, an investment firm co-founded by Rattner.

The long-running probe is aimed at an alleged “pay-to-play” scheme between Quadrangle and the New York State Pension Fund. Neither Quadrangle nor Rattner has been charged with wrongdoing, and the administration said it was aware of the investigation at the time of Rattner’s appointment to lead the auto task force. But, as the speculation goes, it may have dowsed Rattner’s hopes for a bigger role in government.

He will be replaced by another top task force member, Ron Bloom, a one-time investment banker who was instrumental in restructuring the steel industry.

Rattner, 56, is credited as the hands-on dealmaker who strong-armed concessions from GM, Chrysler, and their unions in exchange for federal bailouts that could reach an estimated $100 billion in taxpayer funds. The Wall Street Journal reported that, acting on Obama’s behalf, he personally demanded the resignation of GM CEO Rick Wagoner and helped hand-pick his replacement, Fritz Henderson.

After making his name as a particularly canny business reporter for The New York Times, where he began in 1974 as an assistant to columnist James Reston, Rattner found his way to a spot in the newspaper’s Washington bureau, where he befriended Times heir Arthur Sulzberger, then also working as a reporter. Sulzberger told Newsweek they have “been workout buddies going on 20 years now.”

But in the early ’80s, Rattner left journalism for Wall Street, prompting a former colleague to say, “He decided that rather than covering the players, he wanted to be a player,” first at Lehman Brothers, next at Morgan Stanley, and then Lazard Freres.

There he founded Lazard’s Media and Communications Group, brokering deals for Comcast and Viacom among others, before leaving with three others in 2000 to start Quadrangle.

A financial disclosure report released two months ago showed that Rattner had been an investor in an auto suppliers fund run by Cerberus Capital Management, which was then owner of Chrysler. A Treasury official said the disclosure included plans by Rattner to divest Cerberus holdings that presented a conflict of interest, and that he did.

His wife, Maureen White, is the former national finance chair of the Democratic Party, and the couple cut a high profile as major contributors and hosts to power in lavish “salons” held in their Millionaires’ Row home on New York’s Fifth Avenue. It was there, according to Newsweek, “that Rattner cultivated lucrative ties to New York Mayor Michael Bloomberg,” who chose Quadrangle to manage his personal wealth of more than $16 billion.

Rattner reportedly has earned an estimated $100 million at Quadrangle alone, part of a personal fortune of between $118 million and $620 million. He currently finds himself in a dispute with neighbors over a “far too big and gaudy” summer home on Martha’s Vineyard – a $15 million, 15,500-square-foot project begun in 2006, according to The New York Post.

If he is indeed leaving the auto task force to spend more time with family, he’ll have plenty of room.

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