Mayor Bloomberg defends friend, car czar Steven Ratner, amid pension scandal probe
By Kathleen Lucadamo DAILY NEWS CITY HALL BUREAU, Thursday, April 23rd 2009, 1:33 PM
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Mayor Bloomberg defended his buddy Steven Rattner Thursday, saying he shouldn't give up his federal car czar post while investigators probe his firm's involvement in an exploding pension scandal.

"I can tell you going back a long ways with this guy, he is scrupulously honest and a great public servant," Bloomberg told reporters.

City ethics lawyers last year cleared the way for Rattner's Quadrangle group to manage the mayor's personal fortune and philanthropy assets year after Bloomberg asked for more flexibility in his investments.

The private-equity firm is being probed by State Attorney General Andrew Cuomo for paying fees to secure investments by the city pension funds without disclosing the fees.

Rattner has not been charged with any wrongdoing in the expanding probe, which also includes Quadrangle's role in pay-for-play involving the state pension fund.

Placement fees are legal unless companies are forced to pay a particular firm in exchange for business.
A top associate of Alan Hevesi, who served both as city and then state controller, has been indicted in the scandal.

That associate, Hank Morris, was employed by a firm that collected millions in placment fees.
Critics have called on Rattner to step down from his position as President Obama's pointperson to bailout the auto industry until the investigation is complete.

"From what I can tell and what the authorities have said...he and his company did nothing wrong," said Bloomberg.

"If that's the case, there would be no reason to deprive the country of a very smart guy who is willing to devote himself to public service," he added.

Bloomberg said the decision is ultimately up to the president, adding "I really shouldn't weigh in, he is a friend of mine."

The Obama team has so far backed Rattner, saying he hasn't been accused of wrongdoing and that he alerted them about the investigation.

Steven Rattner

Hank Morris Reaches Plea Deal in N.Y. Pension Probe
Businessweek, November 05, 2010, 7:49 PM EDT
By David McLaughlin and Karen Freifeld
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Nov. 5 (Bloomberg) -- Henry “Hank” Morris, the former political consultant who is at the center of New York Attorney General Andrew Cuomo’s probe of corruption at the state’s pension fund, reached a plea deal with prosecutors.

The deal follows news last month that Quadrangle Group LLC co-founder Steven Rattner, the subject of state and federal investigations of corruption at the fund, is near a settlement with the U.S. Securities and Exchange Commission, according to a person familiar with the matter.

Under the agreement, Morris would plead guilty to “a minor charge” that carries a maximum sentence of 1 1/3 to 4 years, New York State Supreme Court Justice Lewis Stone said at a hearing yesterday, according to a transcript of the proceeding.

Morris was facing more than 70 charges related to Cuomo’s probe of the retirement fund. On the top charge, he was facing as many as 25 years in prison. Ellen Biben, a prosecutor with Cuomo’s office, told Stone the proposal is for a plea to a securities fraud charge.

The proposed plea deal also calls for “certain restitution,” the judge said, according to the transcript. Morris reaped $19 million in fees for himself through 23 state pension-fund investments for which he acted as an undisclosed placement agent, or middleman, according to Cuomo.

Stone declined to consider the agreement at yesterday’s hearing, saying he wanted more time to review the proposal. The deal, he said, is up to the court’s discretion.

‘Enormous Considerations’

“This case is, in this court’s opinion, one of the most important cases relating to corruption in government in the state of New York and perhaps one of the almost seminal cases involving that in the country. There are enormous considerations on this,” Stone said.

Richard Bamberger, a spokesman for Cuomo, declined to comment. Laura Birger, a lawyer for Morris, declined comment. Stone set another court date for Nov. 22.

Rattner, 58, arranged to retain Morris, the former chief political consultant to ex-New York Comptroller Alan Hevesi, as a placement agent. Rattner also is accused of setting up a DVD distribution deal for a movie produced by the brother of a pension fund official. Hevesi pleaded guilty last month.

In exchange, Quadrangle, a New York-based private-equity firm, obtained $100 million in investment commitments from the New York state Common Retirement Fund, said Cuomo, who resolved a probe of the firm in April for $7 million.

At least six other people besides Hevesi have pleaded guilty in connection with the New York probe, 15 firms besides Quadrangle have settled and more than $139 million has been paid to the fund and the state, according to Cuomo.

The case is People v. Morris, 0025/2009, New York State Supreme Court, New York County (Manhattan)

--Editors: David E. Rovella, Michael Hytha.

To contact the reporter on this story: David McLaughlin in New York State Supreme Court at dmclaughlin9@bloomberg.net; Karen Freifeld in New York State Supreme Court at kfreifeld@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Mayor Bloomberg's moneyman is Hillary Clinton's top fund-raiser
BY KIRSTEN DANIS DAILY NEWS CITY HALL BUREAU CHIEF, January 16th 2008, 1:38 AM
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Mayor Bloomberg has a new investment whiz managing his billions - and he's one of Hillary Clinton's biggest boosters.

Even though the mayor might run for President, he's put his personal fortune and philanthropy's assets in the hands of top Clinton fund-raiser Steven Rattner, the city Conflicts of Interest Board revealed Tuesday.

"What's he going to do? Go out and look for somebody who supports Ron Paul?" asked former Mayor Ed Koch, a Clinton backer.

City ethics lawyers cleared the way for Rattner's Quadrangle Group to handle the mayor's money after Bloomberg asked for more flexibility in his investments so he can start setting up his charitable foundation.

When he became mayor, Bloomberg was forced to dump his stocks and invest only in mutual funds. Now he can tell Quadrangle the kinds of investments he wants to make - such as hedge funds or currencies - but can't pick specific ones. Rattner and Bloomberg are longtime friends from the small world of big money.

The mayor helped fete Sen. Chuck Schumer (D-N.Y.) at Rattner's luxe Fifth Ave. apartment in January 2007 and had an hour-long sitdown with the investment guru at Quadrangle's Park Ave. offices a month later, according to Bloomberg's public schedule.

"He has had a great run managing money. He has a beautiful apartment. He has a great life. He must know something," said Democratic political consultant Hank Sheinkopf.

But Bloomberg and Rattner would be on opposite sides of a political fight if the mayor runs for the White House.

Deputy Mayor Kevin Sheekey has said Bloomberg would be willing to drop $1 billion on a run - cash that Rattner's firm presumably would help free up.

"The Clinton folks wouldn't know until the hammer drops," said Doug Muzzio, a professor of public policy at Baruch College.

Rattner, whose wife is former Democratic National Committee finance chairwoman Maureen White, was just named to a national committee hoping to drum up millions for Clinton as she slogs through a grinding primary season. Rattner isn't the only political powerhouse at Quadrangle - just the biggest.

Co-founder Joshua Steiner raises money for Sen. Barack Obama, and a third co-founder, Peter Ezersky, has given $3,500 to Clinton - while raising cash for former Mayor Rudy Giuliani.

Meanwhile, two seasoned Washington operatives unveiled a new Draft Bloomberg Committee and Web site to try to rally supporters into signing petitions to get Bloomberg to run for President.

Republican Douglas Bailey, a former adviser to President Gerald Ford, and Democrat Gerald Rafshoon, who helped shape former President Jimmy Carter's campaign message, struggled to explain to reporters what excites them about his possible candidacy. The political veterans stared at each other for an uncomfortable four seconds before attempting an answer.

"I have met Michael Bloomberg and he is a very competent individual," Rafshoon said. "Times, and our recent experience, calls for competence."

"He's also run things," Rafshoon added.

Bailey said Bloomberg is adept at finding common ground and being a uniter, "and that's what excites me."

Before launching the effort - which they are not coordinating with other draft Bloomberg groups - they met with Sheekey, they said.

kdanis@nydailynews.com

With James Gordon Meek

Assembly Speaker Sheldon Silver arranged pension sitdowns, including one with Mike RichterBY Kenneth Lovett, DAILY NEWS ALBANY BUREAU CHIEF, April 23rd 2009, 1:51 AM
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ALBANY - Investors trying win state pension fund business - including former Rangers goalie Mike Richter - got coveted access to the state controller with help from Assembly Speaker Sheldon Silver.

Silver twice arranged sitdowns with the controller, who has sole control over pension investments, the Daily News has learned.

One of the most powerful men in Albany, Silver a few years ago accompanied investor Shlomo Kalish of Jerusalem Global Ventures to meet with then-Controller Alan Hevesi to discuss a possible deal.

More recently, Silver and Richter met with Controller Thomas DiNapoli. Richter, the hero of the 1994 Stanley Cup team, is a partner with Environmental Capital Partners.

The pension fund ultimately took a pass on both deals.

But the involvement of Silver - whose spokesman Dan Weiller confirmed the meetings - has raised serious questions among government watchdog groups.

"At a minimum, it's an appearance of impropriety," said Susan Lerner, of Common Cause-New York. "It's very inappropriate because it looks as if the speaker is using his office as the most powerful elected official in the Assembly to try and influence the controller, an independent elected official," Lerner added.

"It has a tacit stamp of approval from the speaker when he's sitting there during the meeting, and that's extremely troubling," Lerner said.

Weiller said the speaker has no financial connection to Kalish, Richter or their firms, and that there had been no deals for him to receive any fees. He said Silver met Kalish, who could not be reached for comment, during a trip to Tel Aviv with the American Israel Friendship League.

Richter said he has known Silver, a longtime Rangers fan and season ticket holder, for years and often sees him at charity events.

The former Olympic medal winner said he believes it was at one of those events that he asked Silver to introduce him to DiNapoli.

"Clearly, he's well-connected, and I was trying to market my wares as much as possible," Richter said.

He said he never offered a fee to Silver. "I'd be embarrassed to suggest such a thing," Richter said. "I don't feel there was any wrongdoing whatsoever on either side," No. 35 said. "It was as upfront and honest and as proper as possible."

DiNapoli is a former assemblyman who was appointed to the position by Silver and his fellow Democrats after Hevesi resigned in disgrace.

DiNapoli spokesman Dennis Tompkins defended the meeting with Silver and Richter, saying the pension fund is always looking for good new investment opportunities. The fact that Richter's firm did not get the business shows the process is not unduly influenced by politics, Tompkins said.

"Obviously Shelly's influence didn't carry a lot of weight in this situation," Tompkins said. "The process worked. The investments were vetted, and it was found those products were not a good fit for the fund."

klovett@nydailynews.com