Obama Appointee Steve Rattner Involved in Pay To Play Scandal

What else is new, to be a Democrat is to be an influence peddler. The connection to the New Mexico state fund is not much of a surprise since allegations about corruption have swirled around there for some time now. Its amazing how the Democrats love to use people's pensions as slush funds for their own buddies. I wonder if Civil Service Unions who are so in bed with the democrats will ever rise up and purge the corruption. And just think he was put in charge of restructuring the auto industry! That is some fine judgment there Mr. President, anyway the Obama admin is claiming they knew ahead of time:

Mr. Rattner did not respond to messages seeking comment. A Treasury Department spokeswoman did not address the allegations, but said in a statement, “During the transition, Mr. Rattner made us aware of the pending investigation.”......

Although he is not named in the documents, a person with knowledge of the inquiry said the investment executive is Steven Rattner, co-founder of the Quadrangle Group, the prominent private equity firm.

The S.E.C. complaint, filed as part of an expansive state and federal investigation into corruption at the state pension fund, details the efforts of Quadrangle to gain business from the pension fund beginning in 2004.The person who received most of the $1 million-plus payment has been indicted, accused of selling access to the fund.

There is no indication in the complaint that Mr. Rattner faces criminal or civil charges in connection with the inquiry.Mr. Rattner did not respond to messages seeking comment. A Treasury Department spokeswoman did not address the allegations, but said in a statement, “During the transition, Mr. Rattner made us aware of the pending investigation.”

In a statement, Quadrangle said the firm is fully cooperating and has produced all documents sought by investigators.“Our expectation is that no action will be taken,” the statement said.

How did it work:

In October 2004, the executive met with Mr. Loglisci to seek the pension fund investment and Mr. Loglisci “reacted favorably” and “began taking the necessary steps to secure approval” for the investment, the complaint said.

Two months later, in December, the same executive met with Mr. Morris, who, according to prosecutors, was working in tandem with Mr. Loglisci to generate millions of dollars in fees from the investment firms, and within weeks had agreed to a deal to pay an obscure securities firm that employed Mr. Morris 1.1 percent of any money that the retirement fund invested with Quadrangle, as a placement agent fee. That worked out to $1.1 million, of which Mr. Morris received 95 percent.

The timing of the meeting with Mr. Morris was significant, the complaint indicated, because the Quadrangle executive had already met with Mr. Loglisci and would presumably not need a placement agent. In addition, Quadrangle had previously retained a separate placement agent.

The executive also met with Mr. Loglisci about a low-budget movie Mr. Loglisci was producing, “Chooch.” Soon afterward, GT Brands Holdings, a company owned by one of Quadrangle’s private equity funds, made a deal to acquire the DVD distribution rights to “Chooch,” an agreement that made the film’s producers nearly $90,000.

The Quadrangle executive called Mr. Morris after the distribution deal was closed, and told him of the deal’s “connection to Loglisci.” Three weeks later, Mr. Loglisci “personally informed the Quadrangle executive that the retirement fund would be making a $100 million investment” in Quadrangle, the complaint said.

Culture of Corruption