WASHINGTON -- The Treasury Department has tapped Steven Rattner, the cofounder of a private equity group, to act as a special advisor on the restructuring of the US auto industry, officials said Monday.
Rattner, 56, who was rumored to be the administration's top pick for a 'car czar,' will join a cabinet-level task force which includes Treasury secretary Timothy Geithner and Lawrence Summers, economic advisor to president Barack Obama.
His official title will be Counselor to the Secretary of the Treasury.
Rattner was the co-founder of the investment firm Quadrangle Group. A former financial journalist with the New York Times, Rattner previously was the deputy chairman of investment bank Lazard Freres & Co.
He has no specific experience with the auto industry.
The task force is charged with examining the restructuring plans of General Motors and Chrysler, which last week asked for 21.6 billion dollars in additional loans after having been awarded 17.4 billion in emergency loans in December.
Agreement on the final plan will serve as a basis for the Treasury's decision to call in or extend the loans.
That decision is expected to come by the end of March.
Cuomo to Force Thain to Give Up Bonus Details
Monday, February 23, 2009 1:56 PM
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NEW YORK -- The New York attorney general's office on Monday moved to force former Merrill Lynch & Co. CEO John Thain to disclose details about bonuses paid to Merrill employees before the company was sold to Bank of America Corp.
Attorney General Andrew Cuomo filed a motion in New York state court that would force Thain to provide details he refused to give during a deposition Thursday. Thain refused to discuss individual bonuses during the deposition, saying he was told by Bank of America not to divulge details about them.
A spokesman for Thain said the former Merrill CEO is cooperating with Cuomo's office and would answer questions about individual bonuses if compelled by the court order.
The motion says Bank of America's instruction to Thain to not reveal individual bonuses "obstructs" the attorney general's investigation. The motion did not force any immediate action from the Bank of America. Bank of America did not immediately return messages seeking comment.
Cuomo has been investigating $3.6 billion in bonuses Merrill Lynch executives received less than a month before the company completed its sale to Charlotte, N.C.-based Bank of America, and whether investors were properly informed about Merrill's finances.
The payments came as New York-based Merrill was on the brink of reporting a more than $15 billion fourth-quarter loss. The investment bank was among the hardest hit by the ongoing credit crisis. Merrill lost more than $27 billion for the full year.
Merrill set those bonuses Dec. 8, according to the court filing. At the time Merrill set the bonuses, it had anticipated losses that were $7 billion less than what its actual results eventually were, the filing said. Despite the actual results, the bonus pool was not altered, according to the filing.
During his deposition Thursday, Thain indicated Bank of America was deeply involved in paying out the Merrill bonuses.
Earlier this month, Cuomo subpoenaed Bank of America's chairman and chief executive Ken Lewis, as he investigates the timing of the bonuses. Last month, Cuomo subpoenaed Thain and Bank of America's chief administrative officer, J. Steele Alphin.
When questioned about the Merrill bonuses during Congressional testimony Feb. 11, Lewis said he had "very limited" involvement in the decision making regarding the payments. Lewis said: "We had no authority to tell them what to do to. Just urge them what to do. We did urge."
Bank of America has also repeatedly said that Merrill Lynch was an independent company last year, and its board of directors had ultimate approval over how much to pay employees.
Lewis testified before a Congressional committee along with other banking executives whose firms have received funds from the government.
Last month, when news of the bonuses broke, Thain resigned from his new post as head of the wealth management division of the combined bank.
The initial reports of the bonuses came just days after Bank of America received an additional $20 billion from the government that it said it needed to help offset the losses it was absorbing from the Merrill acquisition. The government also promised to cover losses on more than $100 billion in risky assets. The additional support was provided to Bank of America as Lewis showed trepidation about completing the deal to acquire Merrill.
The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off the most intense period of the financial crisis.
© 2009 Agence France-Presse