NEW YORK | The White House said Friday it was standing by President Obama’s nominee to head its auto industry task force in the wake of news accounts that he has been accused of paying more than $1 million to an aide of New York’s former comptroller in a bid to win business in the state pension fund.
Steven Rattner was an executive at the Quadrangle Group LLC, a private equity firm, until he left this year to lead President Barack Obama’s efforts to fix the U.S. auto industry. The Wall Street Journal and New York Times reported that Mr. Rattner had met with two now-indicted men in an attempt to win state pension fund business.
Obama administration officials said Friday that Mr. Rattner told the Treasury Department about the two-year investigation by the Securities and Exchange Commission and by New York Attorney General Andrew Cuomo prior to Mr. Obama’s inauguration.
Mr. Rattner “is not accused of doing any wrongdoing and he’s not likely to face any criminal or civil charges as it relates to this. And the pending investigation was something that he brought up to us,” spokesman Robert Gibbs told reporters aboard Air Force One en route to a Western Hemisphere summit in Trinidad and Tobago.
The auto task force will play a central role in evaluating plans by General Motors and Chrysler Corp. to recover financially after taking billions of dollars in taxpayer loans since late 2008.
Quadrangle, while under Mr. Rattner’s watch, paid huge fees to Hank Morris, a political aide to former New York comptroller Alan G. Hevesi, the Securities and Exchange Commission said in court papers filed Wednesday.
Mr. Morris and the retirement fund’s former chief investment officer, David Loglisci, were indicted in March on corruption and bribery charges. Mr. Cuomo and the SEC have said the payments Mr. Morris collected from Quadrangle and other firms interested in landing pension fund business amounted to kickbacks.
Mr. Rattner has not been charged with any wrongdoing. A spokesman for Quadrangle declined to comment Thursday when asked about the company’s role.
Mr. Cuomo had been investigating suspected corruption at the comptroller’s office during Mr. Hevesi’s administration. Mr. Hevesi has also not been charged with any crimes.
Prosecutors charged Mr. Morris and Mr. Loglisci in March with shaking down millions of dollars in payments from private equity firms and hedge funds interested in obtaining pension fund business.
Mr. Rattner, a one-time New York Times reporter who made a fortune on Wall Street, has been a major fundraiser for political candidates. His wife, Maureen White, was the former fundraising chairwoman of the Democratic National Committee.
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