Rattner steps down from US auto task force

The Quadrangle co-founder will not return to the private equity firm, a source said. Shortly after Rattner’s departure in February, the firm became swept up in the ongoing pension pay-to-play scandal, with Rattner himself mentioned as playing a role. He has not been charged with wrongdoing.

Steve Rattner, who earlier this year left the firm he co-founded, Quadrangle Group, to take a high-profile role within the US Treasury Department, has stepped down from his post as chief of the US government’s auto task force.

Rattner will not re-join Quadrangle, according to a person with knowledge of the situation.

“With GM’s restructuring complete, Steve Rattner, whose leadership and vision were invaluable to the auto task force’s efforts, has decided to transition back to private life and his family in New York City,” US Treasury Secretary Timothy Geithner said in a statement. “I hope that he takes another opportunity to bring his unique skills to government service in the future.”

Ron Bloom, who headed up the task force with Rattner, will assume the duties of running the entity, which will move away from the day-to-day restructuring of the industry now that General Motors and Chrysler have both exited bankruptcy.

Rattner left Quadrangle in February to join Obama’s auto task force, charged with restructuring the nation's ailing auto industry. At the time, Rattner’s departure triggered a “key-man” clause under which LPs in the firm’s $1.8 billion second fund could terminate the fund’s commitment period.

LPs eventually voted to keep the fund’s commitment period, which had about two years left at the time. Quadrangle also appointed Michael Huber and co-founder Joshua Steiner as co-presidents of the firm after Rattner’s departure.

Rattner was mentioned in complaints detailing a broad pay-to-play pension scandal under investigation by New York attorney general Andrew Cuomo. In April, the comptroller of New York City began investigating whether Quadrangle “intentionally misled or deceived” city pension funds by not disclosing payments to an investment firm affiliated with one of the scandal’s alleged main culprits, Henry Morris.

Cuomo’s office described Rattner as having spearheaded the relationship between New York Common and Quadrangle.

The city pension funds committed $85 million to Quadrangle in 2005 and $40 million in 2006. At the time, Quadrangle never mentioned any relationship with Searle, a company affiliated with Morris. Quadrangle also paid $150,000 to Searle for a $10 million investment with the Los Angeles Department of Fire and Police Pensions and did not disclose the payment until the Cuomo investigation became public earlier this year.

Cuomo has not accused Quadrangle or anyone affiliated with the firm of any wrongdoing.