Rattner’s Rehab

Illustration by Dan Goldman

Overhaul is the unironic title of Steven Rattner’s forthcoming book about his tenure as Obama’s car czar. In 2009, Rattner led the team that pulled off one of the trickiest (and riskiest) corporate restructurings in recent history, remaking America’s bankrupt car industry in about six months. (As one measure of its success, GM is about to issue an IPO, an idea that would have seemed hallucinatory just a year ago.) Rattner was much praised for his work at the time, but then the story line shifted, infuriating him. The press turned its attention to what Rattner had done half a dozen years ago, when he paid what to enforcement officials seemed like kickbacks to Hank Morris, a now-indicted political fixer who helped direct New York State pension-fund investments. Rattner has not been charged, but his Google Alerts constantly remind him that his real accomplishments have been drowned out by scandal. Clearly one purpose of Overhaul is to refocus attention … back to those more heroic days.

Rattner began his career at the New York Times, where he was a star reporter; jumped ship for investment banking, where he was an accomplished deal-maker; then left to found Quadrangle, a private-equity fund that made him very rich. But he’s not the most affable person: He often strikes people as smart, efficient, but kind of soulless. (One friend described him as being “warm in a cool way.”) It’s a problem he’s aware of: At one point, he hired an executive coach to give him tips on how to be likable. (One suggestion he got: Say “Good morning” before opening a meeting.)

But ultimately, the key to Rattner’s success isn’t his personality—he is acharismatic. It’s that Rattner delivered: money for the Democrats, deals for Lazard Frères, and investors for his fund, even if it meant dealing with unsavory characters like Morris.

Rattner’s singular ability to deliver gained him entry into a schmoozy inner sanctum, which turned out to be part of the problem. He relied on friends for business—Mayor Bloomberg, who is thanked in the book, hired Quadrangle to manage his billions—for dinner-party company, for favors, and for advice. Bad advice, as it turned out. In Overhaul, Rattner talks about how he called his friend Chuck Schumer to vet Hank Morris, who’d worked for the senator. Schumer apparently gave Morris the thumbs-up, which Rattner says was all he needed in the way of a background check.

Mostly, though, the book steers clear of Rattner’s missteps. It’s a return to his journalistic roots, based on 150 interviews. It offers lots of insidery details—Rahm Emanuel saying “Fuck the UAW,” Obama tightening his jaw (in apparent horror) when informed of GM CEO Rick Wagoner’s $7.1 million severance—but nothing that’s surprising. The book is clear on Rattner’s abilities: a mastery of detail, his deal-making skill, his not being a shouter. But even as he spent days whipping unions and manufacturers into line, scandal was overtaking him. His nights were occupied trying to fend off investigations by the SEC and the New York State attorney general, until finally his powerful friends thought it best he step aside.

One of Rattner’s defenses against his involvement is that everyone else was doing what he did. It’s the kind of morally unself-aware thinking that will be his legacy, as much as his term as car czar. And there’s little possibility of an overhaul there.

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Rattner’s Rehab