The Best Fight In Town? Rattner vs. Cuomo

The holidays are upon us and everyone is supposed to make merry. But don’t tell that to Steve Rattner and New York Attorney General Andrew Cuomo.

The fight between the two has grown particularly nasty. The governor-elect is considering perjury charges against the Quadrangle co-founder, according to the New York Times. NYAG Cuomo may use Rattner’s former attorneys as witnesses against him, according to the New York Times.

Simpson Thacher & Bartlett, the law firm that represented Rattner against Cuomo’s office, has hired Mary Jo White, former U.S. Attorney for the Southern District, to guard the firm against potential action, the story said. Simpson Thacher isn’t repping Rattner anymore.

Meanwhile, Rattner’s confidants are questioning Cuomo’s zealousness. Rattner, in a TV interview, has called Cuomo’s behavior “close to extortion.” And, Rattner’s wife is saying that some embarrassing information is expected to surface about how Cuomo has handled the investigation. And, of course, any story on Rattner would be incomplete without the mention of “Chooch,” the obscure movie that a Quadrangle-controlled company bought the distribution rights for, allegedly in exchange for pension fund business.

So what does it mean? Cuomo’s long-running investigation into the New York “pay to play” pension fund scandal isn’t over by a long shot. Alan Hevesi, ex-New York Comptroller, was sole trustee of the fund, which is valued at $124.8 billion. Cuomo has charged that the fund became “a piggy bank” for Henry “Hank” Morris, former adviser to Hevesi, who reaped millions of dollars in fees from individuals and firms seeking to invest the state’s money, Reuters has said. Both Morris and Hevesi have pleaded guilty. Quadrangle, the media PE firm, reached its own settlements related to the corruption probes in April, agreeing to pay $7 million to New York and $5 million to the SEC.

Rattner has vowed to fight Cuomo and clear his name. Last month, the high-powered exec settled with the SEC and agreed to pay $6.2 million. Rattner also agreed to a two-year ban from the securities industry. NYAG Cuomo then filed two separate lawsuits against Rattner, seeking at least $26 million and a lifetime ban.

Cuomo, according to New York Times Wednesday, isn’t just upset about feeling misled by Rattner. Cuomo doesn’t think the former Car Czar is acknowledging the seriousness of the investigation. (Rattner, in 2009, took the Car Czar post in the midst of the scandal). Rattner has been doing TV interview to hawk his new book and has sued his former firm, the Quadrangle Group. Rattner claims his former PE firm, and partners, engaged in “unlawful conduct and contractual breaches” and took advantage of Rattner’s departure “to seize”  money owned to him, according to press reports.

For its part, the PE firm has vowed to fight Rattner and this week announced management changes.