Steven Rattner, the hedge fund industry grandee tapped by the Obama Administration to oversee the restructuring of the car industry, should be banned from the securities industry for life for his role in a pay-to-play bribery scandal, the New York Attorney General Andrew Cuomo has declared.
Mr Cuomo's office filed two lawsuits against Mr Rattner yesterday demanding the ban and fines of at least $26m (£16m). The former "car tsar" responded that he would not be "bullied" into a settlement and would defend himself vigorously.
Yesterday, he did agree to settle similar claims brought by the Securities and Exchange Commission, paying $6.2m and consenting to a bar from associating with any investment adviser or broker-dealer for at least two years.
Officials at the New York state employees' pension fund have pleaded guilty to funnelling money to managers who agreed to pay kickbacks, and Mr Rattner is accused of funding the distribution of a low-budget movie made by the brothers of the fund's chief investment officer.
According to yesterday's lawsuits, he also paid $1m in "sham fees" to a placement agent working on behalf of the fund and the New York state comptroller, Alan Hevesi, as well as contributing to Mr Hevesi's re-election campaign. In return, Quadrangle, Mr Rattner's former fund, was given a $150m investment from the pension fund.
Quadrangle has already settled with Mr Cuomo, paying $7m and promising to aid the inquiry into its founder. Mr Rattner said he had never before been accused of ethical violations and accused Mr Cuomo, now Governor-elect in New York, of using the case for political purposes.