OBAMA'S "CAR CZAR" STEPS DOWN - ALREADY!

July 19, 2009

Wow, this story is really getting buried! After only about 5 months as the President's "Car Czar", Steven Rattner is ending his appointment under the cloud of an SEC investigation. Mr. Rattner is giving GM's and Chrysler's quick emergence from bankruptcy as his reason for leaving to spend more time with his family.

However, it is being reported that Rattner, former CEO of the Quadrangle Group, participated in an "influence-for-pay" scheme while running the company. The Quadrangle Group, a private equity concern, was founded in 2000 by Rattner, who left the company in February 2009 to accept the "Czar" appointment. Recently, the New York Attorney General, Andrew Cuomo, has alleged that Rattner's firm and others paid huge sums to placement agents or "middlemen". These agents would then use their "influence" to obtain investment monies from the NY State Pension Fund and other local government pension plans for the groups paying for their "service". Payments of many millions of dollars are being alleged.

The Washington Post reports that, in SEC filings, a "senior executive" at Quadrangle, whom sources have identified as Rattner, is described as having been directly involved in arranging a $1 million-plus payment to a middleman. Rattner headed Quadrangle until February, when he was tapped to join the Obama administration's auto task force.

Americans have to ask themselves how smart it is to appoint all of these "quasi" cabinet heads to basically run their respective areas, without passing the normal consent process required of Congress. Obviously, something greater than sharing household chores is affecting Mr. Rattner's decision. It's probably a good guess that the SEC investigation was potentially so damaging that a full-blown scandal couldn't be tolerated by the Administration. Therefore, expedite the bankruptcy process and use it as a reason for leaving the post, keep it quiet and hope it blows over quickly - and pray nothing else surfaces to potentially incriminate other Czars.

Now, knowing the games that go on in Washington, do we really think that all of the other 20 or so unconfirmed Czar appointees are clean and honest?

Hope the new guy likes Rattner's choice in office furniture. Otherwise, we'll have additional expenses to redecorate and it'll be interesting to see what kind of government pension Mr. Rattner will receive.