University News

Corporation fellow investigated for kickbacks

By
Senior Staff Writer
Friday, April 16, 2010

The Quadrangle Group — a private investment firm co-founded by Steven Rattner ’74 P’09, a member of the Corporation’s board of fellows and a former Herald editor-in-chief — has reached a settlement with the Securities and Exchange Commission and New York Attorney General Andrew Cuomo concerning a corruption investigation, the New York Times reported Thursday.

Quadrangle was accused by the SEC and Cuomo of giving kickbacks to state pension fund advisers in return for investing with the group, according to a press release from Cuomo’s office. The group will pay $7 million to the state of New York and $5 million to the SEC, those offices reported.

Rattner, who left Quadrangle last year to become President Obama’s “car czar,” was not included in the agreement and is still under investigation by the Attorney General’s office. In a press release, Quadrangle emphasized that it “neither admitted nor denied any allegations” and that the “matters under investigation related solely to the actions of former Quadrangle employees.”

According to the attorney general’s press release, Quadrangle stated, “We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. That conduct was inappropriate, wrong, and unethical.”

Rattner’s lawyer, Jamie Gorelick, was quoted by the Times and other media outlets saying,”Mr. Rattner does not agree with the characterization of events released today, including those contained in Quadrangle’s statement.”

The Chronicle of Higher Education reported last month that the University had invested with Quadrangle, according to its 2008 federal tax forms. The University could not be reached for comment.