MAY 06, 2009
Already connected to a massive kickback scandal involving his New York investment firm, the president’s shady car czar threatened Chrysler creditors when they refused to support the administration’s controversial bankruptcy plan.
Steven Rattner, a top Democratic fundraiser handpicked by Barack Obama to save the nation’s failing automaker, is a pro at abusing political influence to bully for profits. As head of the hedge fund Quadrangle Group he used his power to somehow convince a consultant for New York City’s pension fund to invest in his company. The lucrative arrangement is the subject of recent federal convictions for illegal kickbacks and Quadrangle is under investigation in the scandal.
As the nation’s auto task force leader Rattner personally threatened investment banks to drop their opposition to a plan for keeping Chrysler out of bankruptcy. About 20 lenders had objected to a deal that offered them just 29 cents on the dollar and the White House applied heavy duty political pressure to firms that didn’t sign off on its restructuring plan.
Lawyers for several of the creditors subsequently revealed the controversial White House intervention and one identified Rattner as the guy making the threats. The official White House version, not surprisingly, is to deny that any of it happened. The creditors evidently agreed to bend over and take the huge hit all on their own.
One political columnist points out that, with Rattner in the driver’s seat, Obama’s auto industry policy promises to heighten the influence of lobbyists and open the door to ethical transgressions, even outright corruption. That’s because he’s a financier and Democratic fundraiser steeped in cozy business-government relationships.
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