April 24, 2009

A recent profile in a New York glossy described him as a member of Wall Street aristocracy, a man to whose parties the rich and powerful trip over themselves to attend, a networker nonpareil, in short, the greatest big hitter who has ever graced this poor earth of ours. Leave it to a celebrity-obsessed rag to get it so wrong. His name is Steve Rattner, and he looks like a rodent, except that he wears glasses. He is to Wall Street aristocracy what Paris Hilton is to discretion, a shifty little balding man whose business moves are even shiftier. He is Obama’s chief adviser in dealing with Detroit, the “Car Tsar,” in fact.

It was at a dinner and I was seated in the same table as the Rat and Mrs. Rat, a woman who calls herself Maureen White, socialite. It was the first and last time I set eyes on them. Madame Rat was quite unpleasant, making it obvious my wife and I were below her standards. The Rat was just as hostile, but kept his opinions to himself. The Rattners made their names by getting on every city committee imaginable. It is the quickest way up café society, and they took full advantage of it. The Rat comes from a modest background but learned early on to hook up with movers and shakers, as people who buy influence are known as in this town. His top catch was Arthur Sulzberger, publisher of the New York Times, the paper Rattner went to work for but eventually left for the greener pastures of banking. He remained tight with Sulzberger, a man who inherited a great fortune and is about to turn it into a very small one, and this friendship led to people like Michael Bloomberg, Mort Zuckerman, Richard Holbrooke, the Clintons and others too fishy to name in this here column.

The reason I’m writing about this social climber is because of his involvement in a scandal of gigantic proportions, yet as recently as last Friday a White House spokesman said President Obama had full confidence in the Rat. I find this very strange. I know a man is innocent until proved guilty, but I also know about Caesar’s wife. A new administration that is printing trillions of dollars and taxing everyone to the limit cannot afford shifty types like Steve Rattner cutting corners. After leaving journalism, the Rat joined Lazard Freres and became Felix (the Fixer) Rohatyn’s minion. He angled for the top spot after Felix’s departure, but the big boss, Michel David Weill, never trusted him and told him it was no go. Rattner quit and began a fund of his own, Quadrangle, around the year 2000. It was meant to invest in media properties, and it did. It bought Felix Dennis’s semi-porn ladmags, Maxim, Blender, and Stuff, mags I have never read but, once upon a time, were big money makers. This was a bust, and the Quadrangle Group had to call upon other investors, drawing on Rattner’s social and political connections. One of the investors was Cerberus, a giant private equity firm which had bought Chrysler some time back. Here comes the first tricky part. When the porn business continued to do badly, Rattner played hard ball with Cerberus after defaulting on the loan at Alpha Media (“A payer he is not,” was the way someone described Mr Rodent.)

Then, out of the blue, Rattner was named Obama’s front man to deal with the auto mess, which to my mind is a bit like sending Ezra Merkin or Walter Noel to deal with Madoff’s victims. My question is how can Chrysler get a fair deal—not that it should after the lousy cars it’s made these last 75 years—from a man that owes it a fortune? Rattner, of course, left Quadrangle once he got the Washington job, not that it means much. He still has his equity in the group and knows which side his bread is buttered on.

Now for the big one: In a 123-count indictment issued last month, two people were accused of selling access to investment firms in the New York state—get this—122 billion dollar pension fund. In other words, two men working for the comptroller took back kickbacks in the millions while giving access to the pension fund to—yes, you guessed it—Quadrangle Capital, whose head Steven Rattner even runs Mayor Mike Bloomberg’s money. Quadrangle won $100 million worth of business from the pension fund, and most likely kicked back around ten million. Rattner is supposedly co-operating fully and basically has not broken any laws. Before accepting the Obama offer Rattner was angling for Treasury, but wiser heads prevailed. What I’d like to know is why are the people who took the bribes facing ten years, and those who offered them and benefited as a result are only getting a brief write up in the Spectator and Takimag? (The Times, to her credit, has reported on the story at length)

Mind you,the bigger the corner cut, the less bent people are likely to resign. Rattner should never have gotten the job of Car Tsar, and the new administration should have appointed someone with less access to billionaires who became billionaires on the back of Wall Street and Washington insiders. It goes to the heart of public integrity, but integrity is a word few know how to spell nowadays. The Rat should resign and go back to hustling and social climbing in New York.    


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