Bermuda Quadrangle: Firm's Pension Fund Ties Examined

The trouble is just starting for private equity firm Quadrangle. Last week, it was revealed the firm's founder—and current White House auto bailout chief—Steve Rattner allegedly paid $1 million to a middleman to be included in the state's pension fund. Now it appears the investigation is heating out up over his attempts to have Quadrangle included in other pension funds—like those of New Mexico, LA and NYC. Apparently Quadrangle paid middleman/placement agent fees to the firm of Hank Morris, already indicted in state pension fund scandal, to drum up business—the NY Times reports that after a meeting with the NYC Comptroller's office, "Mr. Rattner left the meeting irritated that his own considerable connections did not seem to be enough. He soon hired Mr. Morris." City Comptroller Thompson's office is now investigating over whether Quadrangle lied about not naming Morris as a placement agent. (Also, Morris was also former State Comptroller Alan Hevesi's political consultant/top fundraiser!) To that end, the State Comptroller Thomas DiNapoli has banned placement agents from the pension fund, but a NY Times editorial suggests that the Legislature needs to create an independent body that watches the investments the State Comptroller makes.