Report: Bloomberg defends Rattner

New York City’s Mayor reportedly said his friend, the former Quadrangle co-founder, is a ‘scrupulously honest guy’, months after the firm accused Rattner of ‘unethical’ conduct.

New York City Mayor Michael Bloomberg defended his friend and former Quadrangle Group chief Steve Rattner this week, telling a reporter, “I don’t think he did anything wrong”.

Bloomberg was speaking to a reporter from the Washington Examiner earlier this week, and said Rattner is a “scrupulously honest guy [who] got caught up” in a scheme run by state pension fund managers, according to an article in the Washington Examiner.

“I happen to think the charges against him are ridiculous,” Bloomberg said, according to the article. “I’ve always stood up for anybody that works with me who gets attacked by the press,” he said. “Steve Rattner’s a very close friend of mine and remains a close friend.”

Bloomberg displayed his confidence in Rattner in April when he seeded new firm Willett Advisors with $5 billion. Rattner launched the firm with other former Quadrangle executives to manage Bloomberg’s family fortune. A spokesperson for Rattner previously described Rattner's role at Willett as that of an “informal advisor”, while Alice Ruth, chief investment officer of Quadrangle Asset Management, was described as “leading the organisation”.

Rattner has not been accused of any wrongdoing. New York's Attorney General Andrew Cuomo has been investigating pay-to-play practices at the New York Common pension for several years. Rattner has been tied to the investigation, but has not been charged with anything. Cuomo has indicted six people, including political operative Henry Morris and former New York Common chief investment officer David Loglisci.

Cuomo has also reached settlements with numerous investment firms, including Quadrangle, which agreed in April to pay $7 million to settle its case.

At the time of Quadrangle's settlement was announced, the firm accused Rattner of behaving in an “inappropriate, wrong and unethical” manner when Rattner hired political fixer Hank Morris to solicit the New York State Common Retirement Fund for a commitment.

“We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund,” Quadrangle said at the time.

Rattner has denied the accusations. Quadrangle hired Morris to increase the commitment from New York Common from $25 million to $100 million. In the middle of the commitment negotiations, the firm also arranged a DVD distribution deal for a movie produced by the brother of accused former pension executive David Loglisci.

Quadrangle has also been investigated by the New York City pension system, which was trying to determine if the firm “intentionally misled or deceived” the pension by not disclosing payments to an investment firm affiliated with Morris. The city pension system committed $85 million to Quadrangle in 2005, and $40 million in 2006. The status of the city's investigation is unclear.