Car czar Steve Rattner leaves: High note or trouble ahead?

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Steve Rattner, the Democratic Party fund raiser extraordinaire (with whom I have worked) will leave his job as car czar at a good time. When President Obama visits Martha's Vineyard this summer, Rattner will be able to entertain Obama at his 15,500 square foot estate there and not have to worry about sucking up to the boss -- because Rattner will be out of Washington. Rattner may be leaving because Tim Geithner is secure as Treasury Secretary -- a position Rattner would no doubt savor -- or it could be to take care of some legal problems.

Since Rattner announced he would join the administration in February, he's gotten credit for helping to bail out Chrysler and GM, both of which filed for bankruptcy and appear well on their way to some form of rebirth, depending on the skill of their new CEOs. But Ron Bloom, who will take over from Rattner, may have done much of the work. Lou Gerstner, the former CEO of International Business Machines (IBM), about whom I posted last week has criticized Rattner for his lack of industrial experience. I hope Gerstner ends up running GM.

Meanwhile, it may well be that Rattner has some legal problems to tend to. His firm, Quadrangle Group, is under investigation for making payments to an indicted intermediary -- Hank Morris -- an associate of New York's former comptroller to help Quandrangle raise money from the New York state pension plan. Did the airing of the details of this investigation get squashed until after Chrysler and GM exited bankruptcy? If so, it will not be too shocking to see more information come out about the Quadrangle legal situation once Rattner is out of Washington.

And come to think of it, if that turns out to be an accurate guess then President Obama may want steer clear of Rattner's Martha's Vineyard estate -- at least for this summer.

Update.AP reports that the New York Attorney General is trying to negotiate a settlement with Rattner and Quadrangle that would enable him to avoid civil charges for the Morris payments.

Peter Cohan is president ofPeter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.

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