Steven Rattner

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This article is about a founder of Quadrangle Group and former U.S. Treasury Auto Industry Advisor . For the former head of DLJ Merchant Banking Partners, see Steven C. Rattner.
Steven Lawrence Rattner
Steven Rattner.jpg
Steven Rattner at the Financial Times View from the Top conference in 2011
Born (1952-07-05) July 5, 1952 (age 62)
Great Neck, New York
Residence New York, New York
Nationality American
Education Brown University
Occupation Private equity investor, investment banker, journalist
Employer Quadrangle Group, Lazard Freres & Co., New York Times
Known for Automotive industry crisis of 2008-2009
Spouse(s) Maureen White
Children 4

Steven Lawrence Rattner (born July 5, 1952) is an American financier who served as lead adviser to the Presidential Task Force on the Auto Industry in 2009 for the Obama administration.[1] He was a managing principal of the Quadrangle Group, a private equity investment firm that specialized in the media and communications industries. Prior to co-founding Quadrangle, he was an investment banker at Lehman Brothers, Morgan Stanley, and Lazard Freres & Co., where he rose to deputy chairman and deputy chief executive officer.[2] Rattner began his career as a journalist for The New York Times.

Rattner is chairman of Willett Advisors LLC, the private investment group that manages billionaire New York Mayor Michael Bloomberg's personal and philanthropic assets. He continues to be involved in public policy matters as the economic analyst for MSNBC's Morning Joe, and he has returned to The New York Times as a contributing writer for its Op-Ed page.

Early life and education[edit]

Born in New York City, Rattner was raised in the suburb of Great Neck, where he attended local public schools. He received his A.B. with honors in economics from Brown University in 1974 and was awarded the Harvey Baker Fellowship. While at Brown, he served as editor-in-chief of The Brown Daily Herald in 1973.

Journalism career[edit]

Upon graduating from Brown, Rattner was hired in Washington D.C. as a news clerk to legendary New York Times columnist James Reston. After a year, he moved to New York as a reporter to cover business, energy, and urban affairs, becoming friends with colleague Paul Goldberger. In 1977, he was sent back to Washington to cover the energy crisis. At the unusually young age of 27, he became the paper's chief Washington economic correspondent, where he became close friends with future Times publisher Arthur Ochs Sulzberger, Jr., and dated Judith Miller. He concluded his service to The New York Times with a two-year stint in London as its European economic correspondent.[3]

Investment banking career[edit]

At the end of 1982, Rattner left The New York Times and was recruited by Roger Altman to join the investment bank Lehman Brothers as an associate. After Lehman was sold to American Express in 1984, he followed his boss Eric Gleacher and several colleagues to Morgan Stanley, where he founded the firm's communications group. In 1989, after Morgan Stanley filed for an initial public offering, he joined Lazard as a general partner and completed various deals for large media conglomerates such as Viacom and Comcast. Alongside Felix Rohatyn, Rattner became Lazard's top rainmaker in the 1990s. Michel David-Weill named him the firm's Deputy Chairman and Deputy Chief Executive in 1997.[2]

Private equity career[edit]

In March 2000, Rattner and three Lazard partners including Joshua Steiner left the firm and founded the Quadrangle Group, which initially focused on investing a $1 billion media-focused private equity fund.[4] Early investors in Quadrangle included Sulzberger, Mort Zuckerman, and Merrill Lynch. Headquartered in the Seagram Building, Quadrangle grew to manage more than $6 billion across several business lines, including private equity, distressed securities, and hedge funds. The firm also hosted an annual gathering for media executives called Foursquare, where speakers included Rupert Murdoch and Mark Zuckerberg. In 2008, the firm's asset management division announced it had been selected to invest the personal assets of Rattner's close friend, the billionaire New York Mayor Michael Bloomberg.[5]

Throughout his business career, Rattner served on several corporate boards including Cablevision, IAC/InterActiveCorp, and Protection One.

Public service[edit]

From his tenure with The New York Times in Washington D.C., Rattner developed a lifelong interest in economic policy, which drew him to politics and public service. In the mid-1990s, he began to work actively on behalf of Democratic candidates, beginning with President Bill Clinton. While it was rumored that Rattner would join a Democratic administration, he did not do so until after the election of President Barack Obama.[5]

In February 2009, with General Motors and Chrysler insolvent, Rattner was appointed counselor and lead auto adviser to the United States Secretary of the Treasury, a role informally referred to in the media as the "car czar". He soon assembled a team that grew to 14 professionals to address the financial problems of the two auto companies.[1]

Reporting to both Treasury Secretary Timothy Geithner and Lawrence Summers, the head of the National Economic Council, Rattner's team developed a plan to save both the two manufacturers and related suppliers and finance companies. The plan involved a total government (i.e., taxpayer) investment of $82 billion in the sector, coupled with controlled bankruptcies for the two auto companies, as well as new management for both, and the closure of 2,000 automobile dealerships and loss of tens of thousands of related jobs.[6][7] Controversially, during the negoitations with the bond holders, Rattner threatened their professional reputations in order to get them on board with the controlled bankruptcies[8]

Rattner later stated that the toughest decision for President Obama about the two auto companies was whether to save Chrysler. There was, however, no disagreement about asking GM CEO Richard Wagoner to step aside.[9]

By July 2009, both automakers had emerged from bankruptcy, had new management and were on their way to profitability.[6] At that time, Rattner left Washington and returned to private life in New York.

Post-political career[edit]

After leaving the government, Rattner wrote Overhaul: An Insider's Account of the Obama Administration's Emergency Auto Rescue, his New York Times best-selling account of the automotive industry crisis of 2008-2010.

He has continued to speak publicly on auto-related matters as well as broader economic issues. Early in 2011, he began contributing a monthly column to the Financial Times on subjects ranging from the Greek crisis to the U.S. budget deficit. He also became the economic analyst for the MSNBC news show, Morning Joe.[10][11] And in June 2011, he was named a contributing writer to The New York Times Op-Ed page, publishing his first column on how government policies drive up corn prices.[12]

New York pension fund investigation[edit]

In 2005, Quadrangle made payments to private placement agent Hank Morris to help Quadrangle raise money for its second buyout fund.[13] Morris had come highly recommended to Rattner from U.S. Senator Charles Schumer.[14] Morris was also the chief political advisor to Alan Hevesi, the New York State Comptroller and manager of the New York State Common Retirement Fund (CRF), which invests in many private equity funds. Morris told Rattner he could increase the size of the CRF investment in Quadrangle's second buyout fund. Rattner agreed to pay Morris a placement fee of 1.1% of any investments greater than $25 million from the CRF.[15]

In 2009, Quadrangle and a dozen other investment firms, including the Carlyle Group, were investigated by the U.S. Securities and Exchange Commission for their hiring of Morris. The SEC viewed the payments as "kickbacks" in order to receive investments from the CRF since Morris was also a consultant to Hevesi.[16] Quadrangle paid $7 million in April 2010 to settle the SEC investigation, and Rattner personally settled in November for $6.2 million without admitting or denying any wrongdoing.[17]

Prosecution by Attorney General Cuomo[edit]

The case drew significant media attention when Andrew Cuomo, the New York State Attorney General, demanded more severe penalties from Rattner than any of the other firms or individuals who had hired Morris as a placement agent.[18] Rattner was once a major fundraiser for Democratic Party candidates including Al Gore and Hillary Clinton, but Rattner had repeatedly passed on fundraising for Cuomo despite Cuomo's past attempts to cultivate Rattner's support.[19]

In an appearance on the Charlie Rose Show, Rattner asserted that hiring Morris as a placement agent was "legal then, legal now, and done properly."[20] He explained he was willing to settle on reasonable terms as he had done with the SEC, but questioned whether Cuomo was motivated by the "facts" of the case and called Cuomo's demands "close to extortion."[21]

On December 30, 2010, Rattner reached a settlement with Cuomo to pay $10 million in restitution but no fines or penalties. He was not prohibited from continuing to protest his innocence.[22]

Personal[edit]

Rattner has served as a board member or trustee of a number of civic and philanthropic organizations, including the Educational Broadcasting Corporation as chairman, Mayor's Fund to Advance New York City as chairman, Metropolitan Museum of Art, Brown University, Brookings Institution and the New America Foundation. Rattner is also member of the Council on Foreign Relations[23] and was an early investor in Current TV, the liberal-leaning network founded by Al Gore.[citation needed]

Rattner is married to Maureen White, who served for five years as finance chair for the Democratic National Committee and is now a senior advisor on humanitarian issues in Afghanistan and Pakistan for the U.S. Department of State. The couple spent a night in the Lincoln Bedroom at the White House in 1995 upon the invitation of President Bill Clinton. They have four grown children, live in a Manhattan apartment, spend summers on Martha's Vineyard.[24] and own a horse farm in North Salem.[25]

References[edit]

  1. ^ a b "Rattner to Serve as Lead Adviser on Auto Bailout" by Michael J. de la Merced and Andrew Ross Sorkin, The New York Times "DealBook", Feb. 23, 2009.
  2. ^ a b "Lazard Names New Top Team Post-Rohatyn" by Peter Truell, The New York Times, May 23, 1997.
  3. ^ "2-Min. Bio: Obama Car Guru Steve Rattner" by Kate Pickert, Time, Apr. 20, 2009.
  4. ^ "4 Top Lazard Freres Bankers Are Quitting to Open Firm" by Patrick McGeehan, The New York Times, March 01, 2001.
  5. ^ a b "Bloomberg Chooses a Friend to Manage His Fortune" by Andrew Ross Sorkin, The New York Times, Jan. 16. 2008. Retrieved 2-23-09.
  6. ^ a b Shao, Maria. "The 2009 U.S. Auto Bailout Was Necessary, Argues Rattner". Stanford Knowledgebase. Stanford Graduate School of Business. Retrieved 2 May 2011. 
  7. ^ "Auto bailout was not unmitigated success" by Zachary Goldfarb, "The Washington Post" September 6, 2012.
  8. ^ "White & Case's Tom Lauria Reflects on Non-TARP Lenders Crazy Chrysler Week". Amlawdaily.typepad.com. Retrieved 2009-10-06. 
  9. ^ Rattner, Steven (2010). Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry. Houghton Mifflin Harcourt. ISBN 978-0-547-44321-8. 
  10. ^ "The great man theory of business" by Steven Rattner, The Financial Times, Jan. 19, 2011.
  11. ^ Steven Rattner on MSNBC.com
  12. ^ Rattner, Steven (June 24, 2011). "Ethanol Production Wastes Corn". The New York Times. 
  13. ^ Story, Louise (April 22, 2009). "Quadrangle Facing Questions Over Pension Funds". The New York Times. 
  14. ^ http://www.charlierose.com/view/interview/11303
  15. ^ "Findings of the Attorney General�s Investigation" by NYAG, NYAG Website, April 15, 2010,
  16. ^ Story, Louise (April 22, 2009). "Quadrangle Facing Questions Over Pension Funds". The New York Times. 
  17. ^ "SEC Settles With Steven Rattner Over Kickbacks; Cuomo Files New Lawsuits" by Joshua Gallu, Karen Freifeld and Bob Van Voris, Bloomberg, Nov 18, 2010,
  18. ^ Story, Louise; Lattman, Peter (October 13, 2010). "Steven Rattner Is Said to Settle Pension Case". The New York Times. 
  19. ^ Story, Louise; Barbaro, Michael (December 7, 2010). "Cuomo Pension Inquiry on Steven Rattner Grows Nasty". The New York Times. 
  20. ^ http://www.charlierose.com/view/interview/11303
  21. ^ http://www.charlierose.com/view/interview/11303
  22. ^ "Rattner to Pay $10 Million in Settlement With Cuomo" by Peter Lattman, The New York Times "Deal Book", Dec. 30, 2010.
  23. ^ http://newamerica.net/user/450
  24. ^ Cohan, William (2007). The Last Tycoons: the Secret History of Lazard Freres & Co. Doubleday. ISBN 978-0-385-51451-4. 
  25. ^ Happy Birthday To North Salem’s Steven Lawrence Rattner | The North Salem Daily Voice Retrieved 2014-10-02.

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