Wednesday, April 22, 2009

The Placement Agent Scandal

Is it Placementagent Gate? The placement agent scandal continues to unfold today with Steven Rattner, Obama’s car czar, more and more in the cross-hairs. This afternoon New York Attorney General office announced that it is investigating whether Rattner’s firm Quadrangle Group "intentionally misled or deceived" New York City Pension Funds in 2005 by failing to disclose money paid to a politically-connected placement agent (since indicted.) Meanwhile New York State announced a permanent ban on the use of placement agents. The real scandal here is how these agents of influence are used to corrupt pension funds, as well as college endowment funds, which put over 130 billion tax-free dollars in leveraged buy outs in 2008. For the implications, see my Clog in yesterday’s Daily Beast.