NEW YORK (Reuters) – Former Obama administration auto industry czar Steven Rattner has agreed to pay $10 million to resolve two lawsuits by New York's attorney general related to alleged kickbacks involving the state's pension fund.
Rattner also agreed to be banned from appearing in any capacity before any public pension fund in New York for five years.
Attorney General Andrew Cuomo announced the settlement, which ends two lawsuits by his office. These had sought to recover at least $26 million from Rattner and permanently bar him from the securities industry in New York.
Rattner is the last major figure to resolve allegations by Cuomo in the attorney general's long-running investigation into alleged wrongdoing in the roughly $130 billion New York State Common Retirement Fund.
Cuomo said he has won eight guilty pleas in the probe, including from former state comptroller Alan Hevesi, and more than $170 million of settlement payments.
The Rattner settlement "resolves the last major action of our multi-year investigation," Cuomo said in a statement. "We have been able to help restore and protect the integrity of the state pension fund."
In a statement released by Cuomo, Rattner said he was pleased to settle, and that the accord "allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult."
Cuomo and the U.S. Securities and Exchange Commission had accused Rattner of entering quid pro quo arrangements with the pension fund to win $150 million of business in 2005 and 2006 for Quadrangle Group, the private equity firm he co-founded and worked for at the time. He no longer works there.
Rattner entered a civil settlement last month with the SEC, agreeing to pay $6.2 million and accept a two-year ban from working with an investment adviser or broker-dealer.
Quadrangle, Rattner and Rattner's lawyer were not immediately available for comment on Thursday.
Cuomo will become New York's governor on January 1.
(Reporting by Jonathan Stempel in New York; Additional reporting by Nadia Damouni, editing by Dave Zimmerman)
ANALYSIS | In a reciprocal action, the United States has revoked the visa of the Venezuelan ambassador to the United States after Venezuela's President Hugo Chavez refused to acknowledge diplomatic ties with the United States. Business Week reports this expulsion is just the latest in many bouts of political feuding between the United States and Venezuela.
Business Week reports Chavez threatened to cut off the oil supply to the United States in 2008 and then backed down. It was around the same time when he backed a Bolivian proposal to expel their American ambassador for alleging the United States' involvement with rebel groups.
These new diplomatic tensions may not amount to anything. If history is any indicator, Chavez will continue to give the United States its oil, as 10 percent of U.S. oil supplies come from Venezuela. Over half of Venezuela's oil goes to the United States.
If the situation does worsen and Chavez does cut off oil to the United States, it's just one more reason to lessen our dependence upon foreign oil. Chavez backed down from his earlier threat to restrict oil but now things have gotten more tense. Ever since July, Chavez has not accepted any American diplomats because the Obama administration's choice, Larry Palmer, alleges Chavez and the army have clear ties to rebel groups in Colombia.
A week after Palmer's expulsion from Caracas, the United States expelled Venezuelan ambassador Bernardo Alvarez, who has been in Washington since 2003. It was an end to five months of diplomatic bickering.
Another recent slap in the face to U.S.-Venezuelan relations came in the form of former president Carlos Perez, whose body will be buried in Venezuela instead of Miami. Perez was living in exile since Chavez took over his government in a coup in 1992. Perez recently died and his widow and mistress were involved in a legal fight as to where his body should be laid to rest. Just before the funeral home was to bury Perez in Miami, his American family agreed to have his body transferred to his homeland.
The next move is up to Chavez. Even if he doesn't value diplomatic ties with the United States, Chavez still could use the easy money he gets from oil exports. In recent OPEC meetings, it came as no surprise that both Iran and Venezuela want to see a $100 price for a barrel of oil, whereas Saudi Arabia wants to keep the price lower, toward $75 a barrel. Saudi Arabia's diplomacy with the United States is on much firmer ground than Iran and Venezuela.
Chavez may get his way--the United States depends upon his oil and he may not have any other markets to which the oil can go. New studies in 2010 show the United States and Europe are gearing up for oil shortages as early as 2015 with demand rising and supplies falling. When that happens, Chavez may be in an even better position to bargain with the United States should he still be in power at that point in time. If not, he can always export oil to China, whose demand for crude is getting closer and closer to the United States'.
William Browning is a research librarian specializing in U.S. politics. Born in St. Louis, Browning is active in local politics and served as a campaign volunteer for President Barack Obama and Missouri Sen. Claire McCaskill.
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