The Quadrangle Group, the private equity firm founded by a former top adviser to President Barack Obama, has settled allegations that it was involved in a kickback scandal at New York’s main public pension plan.
The New York-based firm will pay $7 million to the New York State Common Retirement Fund to end New York Attorney General Andrew Cuomo’s investigation and another $5 million to end that of the Securities and Exchange Commission. The firm neither admitted nor denied any wrongdoing on its own part, but offered harsh words for Rattner, who left Quadrangle to head the Treasury Dept.’s auto task force.
“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,” Quadrangle said. “It is our understanding that Mr. Rattner also arranged a DVD distribution deal for a movie produced by the Chief Investment Officer’s brother in the middle of the investment decision-making process. That conduct was inappropriate, wrong and unethical. Mr. Rattner is no longer with the firm and is not a part of today’s settlement. Quadrangle will fully cooperate in the Attorney General’s ongoing investigation of Mr. Rattner and others.”
Ratter denies any wrongdoing. Last month, it emerged that Rattner was in talks with Cuomo to settle the allegations.
Quadrangle paid about $1.1 million in allegedly bogus finder-fees to Morris, the top political consultant to former New York Comptroller Alan Hevesi, whose office oversees the CRF. In exchange for the alleged kickbacks, Morris had the pension fund invest $100 million in the private equity firm.
Quandrangle was also involved in the distribution of a movie produced by the brother of David Loglisci, the former Common Retirement Fund chief investment officer, who pleaded guilty this week to involvement in the scam.
Morris has pleaded not guilty.