Steven Rattner

Steven Lawrence Rattner (born July 5, 1952) is a New York investment asset manager who served as lead adviser to the Presidential Task Force on the Auto Industry in 2009, co-chaired by Timothy Geithner and Lawrence Summers, for the Obama administration.[1] He is currently chairman and chief executive officer of Willett Advisors LLC, the private investment group that manages billionaire former 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 as a contributing opinion writer for The New York Times op-ed page.

This article is about the chairman and chief executive officer of Willett Advisors LLC and former U.S. Treasury auto industry advisor. For the former head of DLJ Merchant Banking Partners, see Steven C. Rattner.
Steve Rattner
Born
Steven Lawrence Rattner

(1952-07-05) July 5, 1952
Great Neck, New York, U.S.
EducationBrown University (BA)
Political partyDemocratic
Spouse(s)Maureen White
Children4
WebsiteOfficial website

Before joining the Obama Administration, 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.

Early life and education

Rattner was born to a Jewish family[3] in New York City, the son of Selma and George Rattner.[4] His father was the president of a small paint company and is a playwright who has produced several Off-Broadway plays; his mother was an architecture preservationist and vice president of the Victorian Society of America.[4][5] 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

Upon graduating from Brown, Rattner was hired in Washington, D.C., as a news clerk to James Reston, New York Times columnist and former executive editor. After a year, he moved to New York as a reporter to cover business and energy; there he became friends with colleague Paul Goldberger. In 1977, he was sent back to Washington to cover the energy crisis.[6]

At age 27 he became the paper's chief Washington economic correspondent. He became close friends with Arthur Ochs Sulzberger Jr., who was then the Times publisher.[7] He concluded his service to The New York Times with two years in London as its European economic correspondent.[6]

Investment banking career

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 with Lazard colleagues advised on various completed 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

In March 2000, Rattner and three Lazard partners, including Joshua Steiner, left the firm and founded the Quadrangle Group. They initially focused on investing a $1 billion media-focused private equity fund.[8] 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 New York Mayor Michael Bloomberg, Rattner's close friend.[9]

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

Public service
Advisors sit-in on phone calls between President Obama and regional politicians concerning the next day's announcement about General Motors filing for bankruptcy (May 31, 2009). From left: Treasury advisor Harry Wilson; Ron Bloom, auto industry advisor; Steven Rattner, Treasury Department auto industry advisor; Brian Deese, National Economic Council; Gene Sperling, economic advisor; and Larry Summers, Director of the National Economic Council.

From his tenure with The New York Times in Washington D.C., Rattner developed an interest in economic policy, drawing 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.

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.[10][11] Controversially, during the negotiations with the bond holders, Rattner threatened their professional reputations in order to get them on board with the controlled bankruptcies[12]

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.[13]

By July 2009, both automakers had emerged from bankruptcy, had new management and were on their way to profitability.[10] At that time, Rattner left Washington and returned to private life in New York.

Post-political career

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.[14][15] 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.[16]

New York pension fund investigation

In 2005, Quadrangle made payments to private placement agent Hank Morris to help Quadrangle raise money for its second buyout fund.[17] Morris had come highly recommended to Rattner from U.S. Senator Charles Schumer.[18] Morris was 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.[19]

In 2009, Quadrangle and other investment firms were investigated by the U.S. Securities and Exchange Commission for their arrangements with Morris. The SEC viewed the payments as "kickbacks" in order to receive investments from the CRF since Morris was also the chief political advisor to Hevesi.[17] 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.[20]

Prosecution by New York Attorney General

The case drew significant media attention when the office of Andrew Cuomo, the New York State Attorney General, also sought penalties from Rattner.[21] 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.[22]

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."[18] He explained he was willing to settle with the SEC, but questioned whether Cuomo was motivated by the "facts" of the case and called the New York Attorney General office's settlement demands "close to extortion."[18]

On December 30, 2010, Rattner settled with the New York Attorney General's office by agreeing to pay $10 million in restitution. The settlement involved no fines or penalties. As is customary in settlements of this nature, the settlement does not prohibit Rattner from continuing to protest his innocence.[23]

Personal

In 1986, Rattner married Maureen White in an interfaith service at the Lotos Club in Manhattan.[4] 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, New York.[25]

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.[26] Rattner supported various educational and cultural institutions through the Rattner Family Foundation, including the Sesame Workshop, Harvard Law School, the Lower East Side Tenement Museum, Lincoln Center for the Performing Arts and others.[27] White served for five years as finance chair for the Democratic National Committee. He is now a senior advisor on humanitarian issues in Afghanistan and Pakistan for the U.S. Department of State.[24]

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References
  1. "Rattner to Serve as Lead Adviser on Auto Bailout" Archived 2009-02-25 at the Wayback Machine by Michael J. de la Merced and Andrew Ross Sorkin, The New York Times "DealBook", Feb. 23, 2009.
  2. "Lazard Names New Top Team Post-Rohatyn" Archived 2017-11-07 at the Wayback Machine by Peter Truell, The New York Times, May 23, 1997.
  3. Jewish news of Northern California: "The road to the White House goes through Jerusalem" by Douglas M. Bloomfield Archived 2017-09-29 at the Wayback Machine May 22, 2015
  4. New York Times: "Steven Rattner Weds Maureen White" Archived 2017-09-29 at the Wayback Machine, June 23, 1986
  5. New York Times: "G. S. Rattner, Paint Maker and Writer, Dies at 82" Archived 2017-09-29 at the Wayback Machine December 17, 2004
  6. "2-Min. Bio: Obama Car Guru Steve Rattner" Archived 2013-08-02 at the Wayback Machine by Kate Pickert, Time, 20 April 2009.
  7. Manly, Lorne. "A Difficult Moment, Long Anticipated". The New York Times. Archived from the original on 2018-08-29. Retrieved 2018-08-29.
  8. Patrick McGeehan, "4 Top Lazard Freres Bankers Are Quitting to Open Firm" Archived 2018-08-15 at the Wayback Machine, The New York Times, March 01, 2001.
  9. Andrew Ross Sorkin, "Bloomberg Chooses a Friend to Manage His Fortune" Archived 2016-12-20 at the Wayback Machine, The New York Times, 16 Jan. 2008; Retrieved 2-23-09.
  10. Shao, Maria. "The 2009 U.S. Auto Bailout Was Necessary, Argues Rattner". Stanford Knowledgebase. Stanford Graduate School of Business. Archived from the original on 22 March 2011. Retrieved 2 May 2011.
  11. "Auto bailout was not unmitigated success" Archived 2016-03-29 at Archive-It by Zachary Goldfarb, "The Washington Post" September 6, 2012.
  12. "White & Case's Tom Lauria Reflects on Non-TARP Lenders Crazy Chrysler Week". Amlawdaily.typepad.com. Archived from the original on 2010-05-05. Retrieved 2009-10-06.
  13. 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.
  14. "The great man theory of business" Archived 2011-02-22 at the Wayback Machine by Steven Rattner, The Financial Times, Jan. 19, 2011.
  15. Steven Rattner on MSNBC.com
  16. Rattner, Steven (June 24, 2011). "Ethanol Production Wastes Corn". The New York Times. Archived from the original on August 14, 2018. Retrieved February 18, 2017.
  17. Story, Louise (April 22, 2009). "Quadrangle Facing Questions Over Pension Funds". The New York Times. Archived from the original on March 24, 2018. Retrieved February 18, 2017.
  18. "Archived copy". Archived from the original on 2011-01-28. Retrieved 2011-05-02.CS1 maint: archived copy as title (link)
  19. "Findings of the Attorney General's Investigation" (PDF). New York Attorney General. April 15, 2010. Archived (PDF) from the original on June 10, 2015. Retrieved March 8, 2012.
  20. "SEC Settles With Steven Rattner Over Kickbacks; Cuomo Files New Lawsuits" Archived 2015-01-21 at the Wayback Machine by Joshua Gallu, Karen Freifeld and Bob Van Voris, Bloomberg, Nov 18, 2010,
  21. Story, Louise; Lattman, Peter (October 13, 2010). "Steven Rattner Is Said to Settle Pension Case". The New York Times. Archived from the original on January 13, 2017. Retrieved February 18, 2017.
  22. Story, Louise; Barbaro, Michael (December 7, 2010). "Cuomo Pension Inquiry on Steven Rattner Grows Nasty". The New York Times. Archived from the original on March 1, 2016. Retrieved February 18, 2017.
  23. "Rattner to Pay $10 Million in Settlement With Cuomo" Archived 2017-10-13 at the Wayback Machine by Peter Lattman, The New York Times "Deal Book", Dec. 30, 2010.
  24. Cohan, William (2007). The Last Tycoons: The Secret History of Lazard Frères & Co. Doubleday. ISBN 978-0-385-51451-4.
  25. Happy Birthday To North Salem’s Steven Lawrence Rattner | The North Salem Daily Voice Archived 2014-10-06 at the Wayback Machine Retrieved 2014-10-02.
  26. "Steven Rattner". New America Foundation. Archived from the original on September 7, 2013.
  27. "Steven Rattner and Maureen White". Inside Philanthropy. Archived from the original on 5 February 2018. Retrieved 6 February 2018.
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