The Failures of Obama's Auto Bailout Adviser
Steven Rattner's shameless gladhanding has finally paid off: The New York Times-reporter-turned-financier will advise the Obama administration on the auto bailout. His Quadrangle Group's record should give Detroit pause.
Quadrangle bought Maxim publisher Alpha Media in 2007 for $250 million. These days, it looks like the publication may soon be seized by creditors. One of those creditors actually owns Chrysler, which Rattner will now help the White House oversee — a conflict of interest that may have ruined his chances for a bigger job.
Rattner's investment firm has had lower-profile failures. The hedge fund it started it 2006 was shut in November after posting a 25 percent 2008 loss. The company lost another hedge fund earlier in the year when a group of Rattner's former Lazard colleagues decided they'd rather run the fund on their own than under Rattner, according to the Wall Street Journal's sources.
Following the capital outflows, Quadrangle was left to scrounge for money for a new private-equity fund. You can imagine how that's been going.
So really, Rattner's new job advising Treasury Secretary Tim Geithner gets him out of a pickle: He has already announced his departure Quadrangle (he was managing partner and one of four founders).
Chalk the high-powered DC escape up to Rattner's "momomaniacal... social climb[ing]," as one of his colleagues once put it: He raised "large sums" for John Kerry and helped convince 200 business leaders to endorse him; he was a fundraiser ($2 million) and "enthusiastic supporter" of Hillary Clinton. Then he launched a campaign to raise $1 million for Obama from former Hillary supporters.
Friends told Newsweek Rattner had "long coveted" a high-level executive branch job and that he was something of a "hypercareerist." That was anonymously. On the record they "insist[ed] his priority is transforming the eight-year-old Quadrangle into a Wall Street powerhouse." Ha, that worked out.
Given his tight business and personal relationship with Times publisher Arthur Sulzberger Jr. and his purported ability to suppress news about his wife's drunk driving — the DUI was no barrier to an Obama job, as it turned out — perhaps it makes sense that the truth about Steven Rattner is the one you hear on background.