Obama's Car Czar's 'pay-to-play' scheme
The problem involves the game of pay-to-play, a common custom back here in Chicago that our President seems to be unfazed by, as Ben Smith of Politico explains:
The problems of the auto czar, who paid fees to a political consultant arrested for pension fund corruption in New York State, seem to be getting worse, not better. The Wall Street Journal reports that the New York City Comptroller is now looking into Rattner's firm, Quadrangle. And the Times has more.But the reminder of this story -- like the Daschle story -- concerns the investment professionals who spend their time raising money and doing favors for politicians. There's often an assumption that upstanding local tycoons who support, particularly, Democratic politicians whose tax policies would be against their obvious interest are acting out of a kind of noblesse oblige, and demonstrating public spirit.That may be true, but it doesn't mean there's not an enormous amount of money -- by any standard -- to be made by being friends with pols, particularly the ones who control state workers' retirement money.
The New York City comptroller said Tuesday it is conducting an internal investigation into whether private-equity firm Quadrangle Group "intentionally misled or deceived" the city pension funds by failing to disclose paying finder fees to the firm of the now-indicted political adviser Hank Morris, a comptroller spokesman said.Quadrangle paid fees to Mr. Morris's former employer, Searle & Co., in 2005 for an $85 million investment in the New York City Pension Funds, according to a lawyer for Searle.But in disclosures to the pension fund, Quadrangle didn't mention retaining or paying fees to Searle, according to a spokesman for the New York City comptroller, William Thompson, who oversees the fund. Rather, Quadrangle told the pension fund it used two other placement agents -- companies that help investment firms secure business from pensions, endowments and foundations.
Mr. Rattner, a major Democratic fund-raiser, has social and political connections. Mr. Rattner headed much of Quadrangle's effort to raise money from pension funds in 2005, when the firm attracted money from the New York fund and others.Mr. Rattner forged close personal ties in New Mexico, which invested $20 million in Quadrangle. He met with Senator Jeff Bingaman, a Democrat from that state, on at least one occasion, according to a person with knowledge of the meeting. From about 2004 until early this year, Quadrangle also employed the senator's son as an associate.A spokeswoman for Senator Bingaman said that the senator's son did not raise money for Quadrangle, but instead helped make investments. Senator Bingaman was not involved in the pension process, she said.