The car czar job is part of legislation introduced today by Rep. Barney Frank, which would impose stricter conditions on TARP and the semi-associated auto bailout/restructuring package. It also was part of the original auto industry bailout bill approved by the House of Reps, but got stripped by the Senate. No word yet on how the Senate feels this time around, although Frank is hoping for a vote in his chamber by next Wednesday.
If the Senate ascents, then it would seem that Rattner is in pole position to get the job. On his ABC News blog, Jake Tapper wrote:
Democrats tell ABC News successful private equity investor Steve Rattner of the investment firm Quadrangle Group has emerged as President-elect Barack Obama’s leading candidate to be car czar… Rattner was a major fundraiser for Sen. Hillary Clinton, D-N.Y., during the Democratic presidential primaries but after Mr. Obama felled his home state junior senator, he quickly began raising campaign cash for him as well, bringing in more than $100,000 for the then-Illinois senator’s successful campaign. Rattner’s wife Maureen White is a former fundraising chair for the Democratic National Committee.
Rattner of course isn’t commenting, but this does come at a curious time for Quadrangle. The media-focused private equity firm is trying to raise its third fund, in a very tough environment (particularly given that much of Quadrangle’s money comes from state pension funds like CalPERS, CalSTRS, PSERS and New Jersey State Board of Investment). Not only is Rattner one of the firm’s founding managing principals, but is easily its highest-profile executive. When Michael Bloomberg hired Quadrangle to manage his $13 billion fortune, many news outlets reported it as Bloomberg hiring Rattner.
“He knows everyone, and is clearly the top power broker at Quadrangle, which is really saying something,” says a Quadrangle investor. “Losing Steve wouldn’t necessarily be a reason not to invest in the new fund for us, but it may take away a lot of luster for new LPs.”
Another LP source, who is not a Quadrangle investor, adds: “Steve’s political aspirations were presumably well known, so it shouldn’t come as a surprise.”
Perhaps, but I’m sure all of this is causing nausea over at Cerberus Capital Management, the Chrysler owner that, in theory, would be under the car czar’s thumb. A few years back, Cerberus loaned Quadrangle $125 million to buy the publisher of Maxim Magazine, but now argues that Quadrangle is in default. Or, as someone put it to the New York Post:
“It’s crazy,” said one surprised source familiar with the money squabble. “Cerberus is about to foreclose on the loan to Quadrangle, and now Steve Rattner is going to be the boss of Cerberus,” the source said.
But we’re getting ahead of ourselves. First let’s see if this thing even gets through Congress.