photo: New York Social Diary

Since Marcy and Josh have both done the blogospheric head scratch over the potential appointment of Steve Rattner as car czar, I’d like to dial things back to something Arianna wrote in 2006 about Rattner’s support of Lieberman against Ned Lamont and add my own "WTF?"

Of course, there are some Democratic power players who are supporting Lieberman outright. They are the ones wearing the uniform of the old guard, the ones who see their hold on the reigns of party power slipping away, the ones who want to pretend the seismic shift that Lamont’s ascendancy represents is an aberration and not a harbinger of things to come — the ones with the sweat on their lips.

Leading this group is Steve Rattner — private equity banker, major Democratic donor, and longtime friend of the Clintons. He’s backing Lieberman because Joe is the kind of politician establishment money types like Rattner are most comfortable backing — and controlling. He’s also backing him because a Lieberman victory fits in with an even grander scheme for 2008.

Rattner is a longtime backer of New York Mayor Michael Bloomberg (he was the head of Democrats for Bloomberg in 2005), and for over a month has been talking with Bloomberg about mounting an independent bid for the White House in ’08 (a bid given a shot in the arm by David Brooks’ recent centrist, third party, and Lieberman-touting op-ed). Rattner and company (which includes investment banker Roger Altman, deputy secretary of the Treasury under Bill Clinton) see Lieberman’s independent run as a test case for a Bloomberg bid, which is why I hear they’ve been hitting up their pals in the Hamptons and the Vineyard for Lieberman contributions.

Make no mistake about it — without the money Rattner raised for him during the general election, Lieberman would never have had the war chest he needed to let Caroline Kennedy’s handler Josh Isay plaster the airwaves with ads assuring the public that "nobody wanted to bring the troops home more than Joe." A month after the election, Lieberman voted to increase troop strength in Iraq by 30,000.

Last year, NY Magazine wrote a piece on Rattner called "The Saddest Little Billionaire On Fifth Avenue," talking about how the lack of an administration post was a feather in his cap that Rattner (whom they refer to as a "social climber") really wanted.

So is this political payoff? Newsweek, last August, found it interesting that he and his wife — big Clinton fundraisers — suddenly developed such enthusiasm for Obama: "’I think he and Maureen want to be in a position to have something out of it,’ says one Clinton fund-raiser on Wall Street."

Rattner comes out of private equity, a world driven by questionable business practices that has largely been shielded from public scrutiny:

Unlike publicly traded companies that are subject to federal securities laws and regulations as well as to daily scrutiny by financial analysts and the business media, private equity buyout firms operate virtually free of oversight and public accountability, their profits and practices largely hidden from view. Far from a coincidence, this lack of transparency is built into their business model, providing buyout firms with investment advantages that publicly traded companies do not enjoy.

One of the big question marks about the Chrysler/GMAC bridge loans had to do with the role of the private equity firm Cerberus Capital, which owned 80% of Chrysler and 51% of GMAC. As I wrote at the time, the government never required Cerberus to put any money into Chrysler as part of the deal and simply accepted their assurances that the had "other fiduciary obligations" for their billions, without demanding to see their books.

Compare that with the Auto Workers, who had every penny scrutinized. It was considered a national moral outrage that they should expect to make $33 an hour in this day and age.

Now it turns out Rattner’s Quadrangle has a financial relationship with Cerberus, having loaned them $125 million to buy the Maxim and Blender magazine parent two years ago (Cerberus is currently in default). Cerberus would be answerable to Rattner as auto czar.

There is no indication that Rattner knows anything more about the auto industry than I do about string theory. His appointment would signal that a permanent political entitlement class can still reach its hand into the affairs of government on a whim and start mucking around with absolutely no apparent qualification for the job out of nothing more than sheer vanity. The fact that he has questionable relationships with others involved in the auto industry deal he would be supervising is just icing on the cake.

It will be interesting to hear what those who have been touting the "competence over ideology" of Obama Administration appointments have to say about Rattner.