In one of his final settlements as New York Attorney General, Governor-elect Andrew Cuomo last week announced an agreement with Steven Rattner, former principal of the private-equity firm Quadrangle Group LLC, in an investigation into a pay-to-play state pension fund scheme.

Rattner agreed to pay $10 million to the state and is banned from contact with the public pension fund for five years.

The settlement ends two previously filed lawsuits related to $150 million of investments in Quadrangle by the New York State Common Retirement Fund, which is valued at approximately $132.8 billion. Quadrangle settled with Cuomo earlier this year, paying $7 million to the state and pension fund.

"I am gratified that we have been able to reach an agreement in this case, as it resolves the last major action of our multi-year investigation," Cuomo said in a press release. "The state pension fund is a valuable asset held in trust for retirees and supported by taxpayers. Through the many cases, pleas, and settlements in this investigation, I believe we have been able to help restore and protect the integrity of the state pension fund."

In a statement issued with Cuomo, Rattner said that he was pleased to put the matter behind him.

"I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult," Rattner said.

Over the course of the investigation into a kickback scheme that led to guilty pleas from former state comptroller Alan Hevesi, his former political adviser Hank Morris, and his former chief investment officer David Loglisci, Cuomo secured agreements with 19 firms and five individuals that returned more than $170 million to New York and the pension fund. He also secured guilty pleas from eight individuals. Hevesi, Morris, and Loglisci admitted to a scheme that steered pension investments as favors to campaign donors and to generate sham consulting fees.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.