The Party’s Over for Steve Rattner

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With the news that he has agreed to a $6 million fine and a two-year ban from the securities industry, the destruction of Steve Rattner’s long, stellar career finally seems complete. For years, Rattner, 58, was a serial overachiever, excelling in fields from journalism to finance to, most recently, government.

The investigation has hung over Rattner for years — the violations go back to 2004 — and until recently, Rattner seemed to be in the midst of an energetic campaign to reclaim his reputation. For a time it was working. He recently published Overhaul, an account of his heroic reorganization of a bankrupt car industry in a mere six months. Just two days ago, his good friends Mayor Bloomberg and Arthur Sulzberger Jr., publisher of the Times, threw him a book party at The Four Seasons, which once had served as a kind of cafeteria for his private-equity fund Quadrangle, which is in the same building. Bloomberg toasted Rattner and joked about who would play his friend in the movie version — impishly appealing Matthew Broderick, he suggested. It was the kind of jocular, almost familial, atmosphere that in another time would have cemented Rattner’s status as one of the country’s preeminent power brokers. Instead, it turned out to be a farewell party of sorts.

Even as Rattner addressed the crowd, thanking his supporting cast on Team Auto, the SEC prepared to settle charges that Rattner had improperly influenced a top state pension fund official in order to secure the fund’s investment in Quadrangle. The settlement may help him avoid perjury charges, but that seems about the only positive note. (And it’s not over: Attorney General Andrew Cuomo is still investigating.) Ironically, one of his trusted auto task force teammates, Harry Wilson, is running for New York’s comptroller, a position that controls the pension fund.

In the movie of Rattner’s fall, perhaps the most punishing blow had already been delivered. His dream was to rise above mere financier — he’d long ago secured his fortune. He saw himself as a kind of public intellectual influencing national issues. But even before his triumph in the Obama administration was complete, Rattner had been ushered out of government. His powerful political friends were the first to want to be clear of the taint that had attached to him. In days to come, some people may publicly stand by him — the mayor insists that Rattner will still play a role in managing his fortune — but no one will ever again think of him as a bright rising star, a person who might be secretary of the Treasury, as he’d once dreamed of being. The SEC ruined that party, too.

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