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He's not accused of doing any wrongdoing and is not likely to face either criminal or civil charges.
As it relates to this and pending investigation is something that you brought up.
That was White House press secretary Robert Gibbs coming to the defense of Stephen Ratner the investment banker tapped by President Obama to oversee Treasury's rescue -- the US auto industry the Wall Street.
Journal reported last week that records private equity firm is a subject of an SEC investigation into an unfolding -- to play scheme in New York.
In which investment firms were allegedly solicited for kickbacks.
In order to get state business authorities allege that Ratner is firm quadrant go along with several others paid to get investments from the 122.
State pension -- we're back with Dan -- And -- Russell and we're also joined by wall street journal editorial board member.
Jason Riley -- let me frame this issue first you got 122 billion -- state pension money public money.
On the one side you the other side you've got these private equity firms and hedge funds want to get that money to be able to invest.
With their their their investment vehicles -- you have these placement agents in the middle.
We're kind of brokers who try to put these two together that's not technically illegal to this brokering activity.
But when does it become illegal.
In this case.
Well let me definitely allegedly.
-- will look at it this way you know it is not unusual for private equity firms and hedge funds to hire placement agents.
They use them has as sourcing marketing these guys play Canadians go out they say this firm is great you should invest in it.
And they get a cut of any money they -- In this case it was coming from the other direction allegedly -- that -- and pension officials government officials and former connected political operatives who were serving as placement agents who allegedly.
-- going to -- thing you want a piece of this pension fund action.
Here's the campaign donations -- need to make here's the favoring need to meet you for me here's the political operative -- gets paid that is the argument that's being way.
Just that this is -- story plain and simple about public officials control these pension funds shaking down.
Private companies for access and we shouldn't get and we should stipulate -- -- -- has not been indicted he's got that chart hasn't been that there had been no suggestion that he will be but the point is that whenever you put.
Whenever political discretion is involved in controlling access to these vast pools of money.
Corruption is is likely if not inevitable.
And that's what we have so you think this that the that the -- lies more with the public officials or their agents here -- the political operatives like -- more of who's a long -- democratic strategist who who was.
Very close to the comptroller of New York State who was essentially has the ultimate discretion for how this month.
-- -- the people at fault much more than the private actors like Carlyle and and quadra ankle who would pay essentially.
Campaign contributions or in this case actually paid to invest in a dubious school via but I distribution rights for a very dubious movie by the name of children that kind of football comedy that made no money -- them I think the public policy problem here is structural and it's one that puts politicians elected officials in charge of the cash I -- -- -- -- for talking about.
About you know reducing campaign contributions that they can -- -- maybe putting up -- -- in charge of this money but what you really need to do is get political actors.
Away from controlling this article but let's address the culpability game and if there is -- -- -- -- -- -- -- criminal but -- ethical of these private company.
He's basically they know these are political actors they're pains in either in some way.
To be able to get some of this business right is that an ethical business my.
It's not unethical business model but politics itself has them for their capital -- a lot.
And you know the larger question here is is Steve Ratner who was one of the founders of -- -- he is now the cars are right let's put it this way if this were a Republican administration and he were Republicans they would have already hounded Ratner out of that job.
Why hasn't he left.
I think it's because Steve -- job is to protect the UAW.
And the union's interest the United Auto Workers united Arab world and there's not part of it but that's why rat does it Obama administration is not going to push wrapped around the matter how much pressure he comes -- -- they want -- to protect the union's interest in net.
Auto and dislike problem Kim in New York Post this week called for -- -- -- to step aside arguing about him for President Obama this is a distraction and it's not going to go away obviously the New York attorney general Andrew Cuomo said that there's going to be more to this investigation.
Why is the White House taking.
-- something have a political risk to stand by Steve -- Look at it Ratner is at the center of all of these negotiations over Chrysler and GM I think it imparts -- want to disrupt those but the real -- of -- taking here it's not just this is going to be distraction.
But that Ratner actually becomes a liability and that they don't get things done in it.
They're the bond -- out there there's a management they are very nervous about dealing with a guy who they're not sure when the next shoe is gonna drop if it does.
And ended the worry is that they're not gonna negotiator not gonna get something done and that that this isn't going to work out for the Obama administration -- so that is something they had a prayer mine.
Jason are we going to see this spread to other states -- you -- we already -- I mean some of the same players that were involved.
In New York and then involved in investigations on -- New Mexico for example so now this has become a business model for these private equity firms he's had firms.
This hedge funds that that -- access to these state funds and they've taken the business model.
Nationwide that we learned this disk to this week -- quadra ankle gave way this twenty thousand dollars to to governor Bill Richardson of New Mexico and they got some money.
Back from from from that it's all right.
We predict what.
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