Rattner Settles New York Pay-To-Play Suit

Andrew Cuomo is now governor of New York. But in one of his last acts as the state’s attorney general, Cuomo reached a deal to settle an ugly dispute with former private equity honcho Steven Rattner.

To clear up the matter stemming from New York’s pension pay-to-play scandal, Cuomo agreed to accept less than half of the at least $26 million he sought from Rattner, and considerably less than a lifetime ban from the securities industry.

Instead, the Quadrangle Group founder will pay $10 million and has agreed not to appear “in any capacity” before a New York public pension fund, but did not admit or deny wrongdoing.

In the statement announcing the settlement, Rattner struck a conciliatory tone, one very different from that when he characterized the new governor’s campaign against him as “close to extortion.”

“I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult,” Rattner said. “I respect the work of the attorney general and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers.”

Cuomo had accused Rattner, while still at Quadrangle, of paying kickbacks of more than $1 million to win a $150 million mandate from the CRF for the firm, with which he has since had a very nasty split. Rattner previously settled similar allegations leveled by the Securities and Exchange Commission for more than $6 million.