Protection One owner to cough up $7 m. for "pay-to-play" scandal

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04/15/2010
Quadrangle, a majority owner of Protection One was in the news today. More on this later, Dan Primack at PEHub is all over the story. Here's the guts of the story:
The Quadrangle Group this morning settled with New York State over its role in the pay-to-play scandal, agreeing to repay $7 million. Of more importance, it said it is cooperating the the ongoing investigation into firm co-founder Steve Rattner. In an official statement, Quadrangle said: "We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. That conduct was inappropriate, wrong, and unethical. We embrace the reforms in the Attorney General’s Code of Conduct, including the campaign contribution and placement agent ban, which are vitally necessary to eliminate pay-to-play practices from the public pension fund investment process. We urge others in the industry to follow.” Quadrangle this morning also is facing a related lawsuit by the SEC.
Here's a link to the NYT blog on the story. The body of which is below: The Quadrangle Group, the private equity firm, has agreed to settle a corruption investigation with the New York attorney general and the Securities and Exchange Commission, Louise Story of The New York Times reports.
The agreement, announced Thursday, does not include Steven Rattner, a co-founder of that firm before joining the Obama administration for a few months last year to help oversee the bailed-out automakers. The case is a chapter in a lengthy investigation of kickbacks paid by investment firms to advisers for the New York state pension fund. Quadrangle will pay a fine of $7 million to Attorney General Andrew M. Cuomo’s office and $5 million to the S.E.C. Mr. Rattner no longer works at Quadrangle and the firm has agreed to cooperate in the continuing investigations of Mr. Rattner, according to the release issued by Mr. Cuomo’s office. “Today’s action is yet more evidence that kickbacks and corruption contaminated the Retirement Fund,” said Robert Khuzami, director of the S.E.C.’s Division of Enforcement. “The victims were New York State’s hard-working retirees, who were entitled to have honest advisers manage their hard-earned dollars.” A spokesman for Mr. Rattner had no immediate comment. Here’s Quadrangle’s statement, as released by Mr. Cuomo: “We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. That conduct was inappropriate, wrong, and unethical. We embrace the reforms in the Attorney General’s Code of Conduct, including the campaign contribution and placement agent ban, which are vitally necessary to eliminate pay-to-play practices from the public pension fund investment process. We urge others in the industry to follow.”

Comments

I wonder if thats going to hold up the Golden Gate negotiations on the Protection One Buy. Golden Gate was supposedly in the process of purchasing them.