NY Attorney General Cuomo Seeking Settlement With Rattner

Steve Rattner isn't out of the woods just yet. Reports indicate that New York Attorney General Andrew Cuomo might pursue a civil settlement rather than seek criminal indictments over the pension pay to play scandal.

The New York attorney general may press for a legal settlement with Steven Rattner, until recently an Obama administration adviser on the auto industry, over possible civil charges in a pay-to-play investigation, The Associated Press reported.

Rattner announced Monday that he was resigning his position on the White House's auto industry task force, which led the restructure of General Motors Co. and Chrysler Group LLC. It remained unclear Tuesday whether that departure had anything to do with the ongoing public corruption probe that has nibbled at his heels in New York.

Attorney General Andrew Cuomo and the Securities and Exchange Commission have charged a state official and a political consultant with extracting millions of dollars in kickbacks from investment firms trying to raise money from the state's big public pension fund.

The private equity firm Rattner led before joining President Obama's administration, the Quadrangle Group, paid more than $1 million to one of the people indicted in the case, New York political consultant Hank Morris.

A person familiar with the investigation said that criminal charges were unlikely but that Rattner or Quadrangle could reach civil settlements like those Cuomo has reached recently with other companies that made similar payments. The person wasn't authorized to publicly discuss the pending investigation and spoke to the AP on condition of anonymity.

This ignores the fact that Rattner and Quadrangle were also implicated in a pay to play mess in New Mexico that embroiled former Presidential candidate and New Mexico Governor Bill Richardson.

Millions of dollars in fines have already been paid by several companies to avoid further action.

Two weeks ago, the Pacific Corporate Group agreed to pay $2 million to resolve its role in the probe. Riverstone Holdings said it would pay $30 million. The Carlyle Group, one of the nation's largest private equity funds, agreed to pay $20 million in May.

Paying the fines rather than seeking criminal indictments is an easier way to clear the dockets and to avoid complicated trials. Given the money flowing through all these companies and entities, criminal charges could be seen as more appropriate as a deterrent. However, the City and State of New York have eliminated the role of placement agents in obtaining pension business, but the influence peddling is still a serious concern.