Charlie Rose - 1 - 11/22/2010

ALL EXCERPTS MUST CREDIT “CHARLIE ROSE”

(Intro) Charlie Rose: Steve Rattner's been the subject of much praise for his role in saving General Motors. He wrote about that in his book, "Overhaul." He is the subject of much criticism for his role in the State Pension Fund Scandal that has seen several people plead guilty and have their reputations tarnished. He played a significant role on Wall Street and in politics as a major fundraiser. He is a friend of President Obama, former President Clinton, Secretary of State Clinton, and many other prominent individuals from the world of politics and business in the United States. He worked for Mayor Bloomberg and the Bloomberg Foundation. This show has a business relationship with the Bloomberg Company. Steve is my friend. He was formerly Chairman of the Board of Channel 13, the public television station in New York that presents this program. He and his wife have supported our program.

My role here is not to defend or prosecute. It is to ask questions that I and others want to know about his story. This has been a story that has been on the front page of “” and other newspapers. It is about a man who was a subject of a recent profile in “Vanity Fair Magazine.” Last Thursday, Rattner agreed to pay the SEC $6.2 million to settle civil charges and accept a two-year ban from working with an investment advisor broker-dealer. The same day, New York Attorney general and incoming Governor sued Steve Rattner as well seeking at least $26 million and his immediate lifetime ban from New York securities industry. In a statement, Attorney general Cuomo said Rattner was willing to do whatever it took to get his hands on pension fund money including paying kick-backs, focus trading a movie deal and funneling campaign contributions. “Through these law suits, we will recover his ill- gotten gains and hold Rattner accountable.” Steve Rattner replied in a statement, “While settling with the SEC begins a process of putting this matter behind me, I will not be bullied simply because the Attorney general’s office prefers political considerations instead of a reasoned assessment of facts. This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity and I certainly did not violate the Martin Act. That’s why I intend to clear my name by defending myself vigorously against this politically motivated law suit.”

All this comes at a time which should have been about triumph and other circumstances that have led to greater heights for him in the Obama administration. It would be one of those great stories in American life, where a man despite all odds protests he’s innocent until he clears his name. Or it could be a great tragedy where someone who’s had a brilliant career tarnished and a great dream of public service stopped because of bad choices, perhaps illegal choices. It has all those elements, this story does. I am pleased to have Steve Rattner on this program at this time to offer his perspective on what happened and what might happen. With that I say welcome and thank you.

Steve Rattner: Thank you for having me, Charlie.

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 2 - 11/22/2010

Charlie Rose: When you were last here, I want to include for this audience this conversation, you came here to talk about this book, “Overhaul,” which is about the automobile industry and, of course, at that time, this story was known to many peoples. Events have since happened. Here is what took place in an exchange with him at that time which is why he is here at this time. Here it is.

[clip playing]

Let’s start with what’s happened since that conversation at this table.

Steve Rattner: Since that conversation at this table, as you said in your introduction, I was able to reach a settlement with the SEC which, while tough, was acceptable to me in the spirit of getting on with my life and trying to put this behind me. And as you also said in your introduction, for whatever set of reasons, Andrew Cuomo who is looking at exactly the same set of facts, exactly the same body of evidence as the SEC, chose not to settle and chose to sue me asking for, in my view, a ridiculous recompense and other damages.

Charlie Rose: It’s said to be $26 million. It’s said to be a lifetime ban.

Steve Rattner: So it is said.

Charlie Rose: And there is also, it is said, there have been negotiations with him which weren’t acceptable to either you or the Attorney general’s office.

Steve Rattner: We tried our hardest to reach an acceptable resolution. I would like to get on with my life. I have no interest in being in litigation with anybody let alone the Attorney general or the incoming . But there are rights and wrongs in this situation and I’m not going to agree to settle for something that is just not fair and doesn’t reflect the facts and circumstances.

Charlie Rose: Tell me what happened. What are the facts that got you and Quadrangle, your former firm, in this mess in the first place?

Steve Rattner: What happened was that we along with a dozen or more other firms made a decision to hire as a placement agent to raise money for us a man called Hank Morris, someone who I actually knew pretty well through politics, who I knew or believed at the time to be honest, who came to us highly recommended by people whose judgment I trusted, who,

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 3 - 11/22/2010 unlike many people who raise money for funds like ours, was registered, had gone through the whole process with the SEC to become registered and affiliating with a licensed broker-dealer. His engagement was signed and vetted and drafted by our then counsel very, very carefully. And we believed we were going into business with an honest man who could raise money on our behalf, not just in New York, but in a series of places around the country. He presented himself as someone who was building a business, raising money for funds like ours, which is a -- was a legal business then, and it's a legal business today.

Charlie Rose: Okay. So then what happens? So, I mean --

Steve Rattner: Then what happened was one day I awakened in February of this year to find that Mr. Morris and one of his colleagues -- [unintelligible] a colleague but a member of the New York state controller's office had been indicted on something like 123 counts. And it turned out, according to the indictment, that they had done a number of things that were potentially illegal, none of which we were aware of but involving potentially kickbacks and fee sharing and insolence peddling [spelled phonetically]. I'm not a lawyer, I can't even tell you the exact charges. But clearly they were in a lot of hot water. Since then, both Mr. Morris, Mr. Laglisi [spelled phonetically] and others have pled guilty to at least one charge in each case.

Charlie Rose: So you have said you have done nothing wrong in this -- in any of this.

Steve Rattner: I want to be clear that when I settle with the SEC, part of that settlement prohibits me from either admitting or denying or really even talking about the SEC piece of it. So I'd like to confine my comments to the attorney general's lawsuit against me and the charges he's made.

Charlie Rose: And were they different in terms of what the accusations had been that led to the settlement in the SEC case versus the attorney general's case?

Steve Rattner: Everyone can read that and reach their own judgment. I don't know that there's any substantive difference that I would identify for you.

Charlie Rose: Okay.

Steve Rattner: So let's talk about the attorney general.

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 4 - 11/22/2010

Charlie Rose: All right.

Steve Rattner: So the attorney general had a different view as to what the rights and wrongs of this were and decided to sue me.

Charlie Rose: Okay. But I don't want to -- I'm not here to prosecute or defend. But the accusation is there was a -- that Mr. Morris and Mr. Laglisi received help in making -- distributing a movie. And part of that was in consideration of them giving you which resulted in $150 million for your fund that you gave them something in order for them to give you. And that's called a kickback or a bribe. And that's the problem.

Steve Rattner: Well, there's a couple of potential issues. One is simply the hiring of Hank Morris, which I have just told you I believed and was told by my lawyers was legal then, legal now and done properly. The second you've just raised is the question of whether we, a Quadrangle or myself individually did anything to help this movie get made that influenced the outcome of the investment decision by New York state. I would say, one, did I introduce Steve Laglisi to a company that Quadrangle controlled to see if there was a potential DVD distribution deal? Yes, I did. Two, did I ever tell that company to distribute this DVD or insist that they distribute it in any way, shape or form? No. They made that decision entirely alone. And third -- and third, there is not a scintilla of evidence, including a Hank Morris' plea bargain today that that movie had anything to do with -- anything to do in any way, shape or form with why Quadrangle got money for our funds.

Charlie Rose: So no one, to your knowledge, has ever engaged in a quid pro quo, “We’ll help you with the movie, but you know that if you help us with the movie we'll get the money coming to the fund at a time that the fund” -- let's assume the Quadrangle needed a commitment from the New York pension fund.

Steve Rattner: I fundamentally reject the notion that the attorney general has put forward that there was any kind of a quid pro quo involved in either hiring Mr. Morris or in helping Steve Laglisi get an introduction to Good Times. There's not a scintilla of evidence to the contrary. And in the course of this litigation, everyone will find that out.

Charlie Rose: Okay. But are there e-mails that suggest there was some resistance to making -- to distributing the film? Do emails exist that suggest some people weren't crazy about the idea of distributing this DVD?

Steve Rattner:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 5 - 11/22/2010

There are e-mails in every direction, people who are for it, people who were against it. What's clear from the e-mails is that I never told Good Times to make this movie. And what's also clear from these e-mails is that one day I emailed the CEO of Good Times just to find out what was going on. She said, “I don't know. I'll get back to you.” And the next thing was she forwarded me an email from one of her colleagues saying we went ahead and decided to make this movie, unbeknownst, not only to me, but unbeknownst to the CEO of Good Times.

Charlie Rose: Why did you do it, that? Just whatever you -- the characterization of that is, why did you do that knowing you're a smart guy, you know, that somebody there thought this would be a nice thing to do, and you passed it along in whatever manner?

Steve Rattner: I've been in business for a long time. Part of business is relationships. Part of relationships is helping people, introductions, things that are entirely legal and appropriate. I'm sure you've made introductions for people. I've made many. I've asked people to make them for me. I believed I was making an introduction for someone to someone, not in the context of trying to have that make us get money or anything of that sort. But simply in the broadest sense of relationship building, and that was all. If you say to me in retrospect, do I wish I hadn't done it? Of course I wish I hadn't done it because it's brought me all this aggravation. In retrospect, do I think that I was doing anything illegal? Did I ever tell them to make that movie? Do I think it had anything to do with us getting the money? No. I don't believe it did, and I believe the evidence, when it comes out in due course will support that.

Charlie Rose: Do you believe in fact if you had encouraged the company to do it, that would have been either wrong, illegal or unethical?

Steve Rattner: I was very clear with the CEO of that company. I said to her repeatedly, “I do not want you to make this movie because I am saying so. I want you to do what's in Good Times' interests.” If I wanted her to make that movie, all I had to do was tell her to make that movie. We controlled that company. And if you read all the e-mails to which you referred, you will not find a single e-mail saying that. In fact, you will see e-mails from her saying “We don't know which way we're going to come out on this. We're still thinking about it. We may go this way, we may go that way.” It would have been the simplest thing in the world for me to tell her to make that movie and --

Charlie Rose: So in other words, no pressure or no urging or no encouragement to do this.

Steve Rattner:

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I asked her to take a careful look at it. I asked her to treat this gentleman carefully because of his brother's relationship to us potentially. But I never told her to make the movie in any way, shape or form.

Charlie Rose: Did Hank Morris say this was important to them?

Steve Rattner: No. I don't believe so. Hank Morris, my recollection is that Hank Morris introduced me to this fellow actually several years earlier when he wasn't -- Hank Morris wasn't even working for us in the context of somebody who he thought I might be able to help with something. I didn't remember him ever telling me it was important.

Charlie Rose: You settled with the SEC, negotiated with the attorney general but didn't settle. What's the difference here?

Steve Rattner: With the attorney general?

Charlie Rose: Yes.

Steve Rattner: The difference is that Andrew Cuomo decided that his -- as I said in my statement that you kindly read at the beginning, decided that for whatever set of reasons, the politics of this, the press, his own emotions, his people's emotions were such that he would prefer to sue than settle. I don't really get it. I don't think it serves the people of New York well. I was perfectly prepared to reach a reasonable settlement as I did with the SEC. But I'm not going to be bullied by Andrew Cuomo, and I'm not going to agree to something that I don't believe is fair with all things taken into account.

Charlie Rose: As I talk to people about this, two things came out. He's very angry for whatever reason. Something changed. He gave you immunity when you testified before the attorney general, before the grand jury. So you had immunity, then he later had information apparently that he didn't have at the time he granted you the immunity. So that seems to be issue [spelled phonetically]. I have not talked to anybody from his office or him so I don't know. But that seems, in reading things, that there is a change that took place because he realized there was information that he didn't know about earlier.

Steve Rattner: One of the things I've learned from this is prosecutors generally take the view of seeing the worst in people and believing the least and doubting the most. And that seems to be their attitude toward me. My instructions to our lawyers and to the people who are in charge of turning over information, turning over material, was to cooperate fully, turn

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 7 - 11/22/2010 over every little bit that was required, make sure we did exactly what was supposed to have happened. Along the way, there were things that were turned over in batches. And I my lawyers believe done completely legally and appropriately. My lawyers don't believe that any of the later material in any way contradicted what did I said fundamentally in terms of the substance of what happened. Andrew Cuomo may have a different view. But, look, I don't think as a prosecutor you should let emotion get in the way. You should deal with facts. The SEC looked at facts and came to a set of conclusions. Andrew Cuomo chose instead to rely on his emotions.

Charlie Rose: Is it possible that he sees the fact that he learned additional information when emails were presented to him that he had not seen before, so it's not some -- it's partly the emotional feeling like “There was new information that I didn't know about and that I would have expected Steve Rattner to have given me.”

Steve Rattner: He may well have thought that. But again, I'm not a lawyer. I'm not a prosecutor. But it would seem to me that you look at the entirety of the information and then reach a judgment as to what the facts and circumstances are. And most of all, it would seem to me that the prosecutor should recognize that I'm not in charge of figuring out which e- mails to turn over when or document production. My instructions to our lawyers are very clear. Be fully cooperative. And beyond that --

Charlie Rose: He did take note in a radio interview that you took the Fifth Amendment which is a basic American right 68 times. To point that out suggests some --

Steve Rattner: Well, that shouldn't be so surprising because over the past 15 months we have been subjected -- I have been subjected to every kind of threat of prosecution and punishment known to man practically. And therefore, my lawyers advice me on that basis when these threats are still hovering over me that I would be well advised to take the Fifth Amendment and so I did. It is not intended as any kind of an admission that I felt that I broke the law, broke the New York state law in any way, shape or form.

Charlie Rose: It must -- if the attorney general who Governor elect Cuomo [spelled phonetically] says that you were not cooperative or that you stonewalled them, you would say what?”

Steve Rattner: Absolutely not, and by the way, this interview that you refer to where I took the Fifth 68 times allegedly, this was my third or fourth interview with them. It is not as if there was information that they had not received previously that they were now hoping to receive. The vast preponderance if not every single question that they attempted to ask me in that interview had been asked in previous interviews. That interview was really a charade for

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 8 - 11/22/2010 what -- to be able to do exactly what they've done here, which is to say "Steve Rattner took the Fifth 68 times, so he must have done something wrong."

Charlie Rose: You were friends, you and the attorney general?

Steve Rattner: No.

Charlie Rose: You would characterize that, not friends?

Steve Rattner: I would characterize it as a distant relationship. I was never part of the Andrew Cuomo fan club. We knew each other from Democratic politics. He certainly tried to cultivate my support, going back to when he was at HUD, and had me in to lunch in the Secretary's [spelled phonetically] Dining Room, and so on, and so forth. But I never -- I was frankly never president of his fan club or even a charter member.

Charlie Rose: But had you financially supported him?

Steve Rattner: I believe my wife did at the request of one of his major fundraisers, did support him once. I don't believe I've ever supported him.

Charlie Rose: Do you wish you had settled this with him at any point? Because I've -- having conversation with people I know about this, not anybody who's involved as a principle, you know, they've said, "If Steve had just settled this, he'd be much better off. People would have forgotten about it. And he's a rich enough man so that whatever the cost would be, he could put that aside. Why didn't he settle? Why did he get -- allow this to get to this point?"

Steve Rattner: Well, for much of this period of time, Andrew Cuomo's people said there was no financial settlement possible. They wanted greater things. I don't even know exactly what they would have been. And they went for months without us even hearing from them. They dragged this on. In the middle of October, we were about to announce the settlement with the SEC which was just announced, and at 8:00 the night before, Andrew Cuomo's people asked the SEC to hold off because they wanted to basically get this past the election. So Andrew Cuomo has actually dragged this out. I've been willing to settle this all along at a -- you know, on reasonable terms, but I'm not going to settle them on terms that make no sense.

Charlie Rose:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 9 - 11/22/2010

Other people say to me, "This will be settled in the end, that's the way these things work out."

Steve Rattner: I would settle it today. I would settle it tomorrow. I would settle it in six months on terms that make sense and are fair and reasonable. If not, then we'll continue to litigate. And the conduct of the Attorney general's office in my opinion as a non-lawyer throughout this will raise -- will be raised in the course of this litigation, there have been repeated examples of suggestions of threats as recently as last Wednesday, the Attorney general, himself, when he's supposed to be getting ready to be governor, suggested to my lawyers that if they raised any more questions about irregularities, that there might be a disciplinary referral to the bar for my lawyers. This is not the kind of behavior I think we want out of an attorney general or a governor.

Charlie Rose: Have there been other examples of that in terms of the attitude and behavior of the Attorney general and his staff and his -- and the Attorney general's Office?

Steve Rattner: There have been, yes, there have been.

Charlie Rose: What are we talking about?

Steve Rattner: Well, I don’t want to go into all of them at this moment. The time will come to go into them, but there have been repeated threats, repeated suggestions of dire consequences if we didn’t do X or Y.

Charlie Rose: Dire consequences?

Steve Rattner: Dire consequences.

Charlie Rose: Meaning?

Steve Rattner: Meaning far greater punishment than anything that we're talking about [spelled phonetically] --

Charlie Rose: If you didn’t settle on their terms.

Steve Rattner:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 10 - 11/22/2010

Correct.

Charlie Rose: But can you say to me that in the negotiation between you, your attorneys, and the Attorney general’s Office, there has not -- have they come down from the 26 million, for example? I mean, are -- were they -- did they show any give in what they were demanding in the negotiations that took place?

Steve Rattner: I would say that they did show some give. I would concede them that. I would be honest and truthful about that, but not an indication that they would have been willing to settle at what I viewed as a reasonable -- remember one thing, Charlie, under New York law, the only payment that the New York Attorney general can receive, other than a couple thousand dollar fine, is the return of the gain that you got from the investment. And every one of these other settlements -- the Attorney general has settled with more than a dozen other firms -- every single other settlement has been based on the return of the gain that the firm got from the investment. I've already returned that gain through the SEC's settlement, through the SEC --

Charlie Rose: The six million.

Steve Rattner: Well, it's actually three million, and it's [unintelligible], inside that six million is the return of what the SEC calculated to be my three million of gain. So based on every precedent for the way the Attorney general's handled this case, there would be no settlement in monetary terms. I've already settled in monetary terms through the SEC, and that money probably actually comes back to New York state. But I've already settled in exactly the same fashion that every one of these dozen other firms have settled in. And so everything else is just frankly close to extortion.

Charlie Rose: What the attorney general's done is close to extortion.

Steve Rattner: I believe so.

Charlie Rose: Because?

Steve Rattner: Because he has basically threatened me all along the way that if I don’t do what he wants me to do he will prosecute me to the ends of the earth, basically.

Charlie Rose:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 11 - 11/22/2010

Does it make sense for the Attorney general to be doing the things that you’re suggesting? Why is it necessary? This is a man who -- he had an easy election to become governor.

Steve Rattner: It doesn’t make a scintilla of sense to me. He could have settled with me at the same time that the SEC settled. I certainly would have been willing --

Charlie Rose: Did you expect it? Did you think that was going to happen?

Steve Rattner: Honestly, I’ve been in negotiations for 35 years. I think I know a lot about negotiations. This is one that I have been consistently unable to predict. It doesn’t proceed according to any known rules of engagement that I’m familiar with. But my point is, he could have done exactly what you said and I would have done exactly what you said. He chose basically to force it to this place. Not me, I was ready to settle.

Charlie Rose: But he of course is arguing -- from what I understand -- that after he gave you immunity, he discovered new facts that he didn’t know and he feels like he approached this thinking that there were other people, really the principal targets of this, and that as the more he learned, the more he became concerned.

Steve Rattner: All I can say is that my lawyers who handled the production of the documents and the e- mails and supervised my testimony do not believe that anything has come along that fundamentally contradicts what I told him back at the time that he gave me immunity. He can have a different view if he wants, but that’s not my lawyer’s or my view. There’s no theory of the case behind $26 million. It doesn’t comport with any other settlement he’s done or anything else he’s done with anybody else who’s been involved with this whatsoever.

Charlie Rose: It is true, is it not, that he did settle with the former firm for $12 million?

Charlie Rose: Correct -- 12 million that was paid to both -- that’s a combination both to him and to the SEC in Washington and, again, it related to the benefit the firm got. I only got a faction of the firm’s benefit because I was by far less than a majority partner and I would happily give him the same proportion of my benefit as what the firm gave him, but that’s what he’s unwilling to accept. That doesn’t get you to 26 million or 13 million or any number like that.

Charlie Rose: I assume 13 million may be the point [unintelligible]

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Steve Rattner: No, I picked half of 26. I’m not trying to tell you where the negotiations were or were not.

Charlie Rose: Here’s what your partners said. These are the people you went into business with who settled. “Mr. Rattner’s actions were inappropriate, wrong and unethical.” These were your partners.

Steve Rattner: That was one of the most hurtful things that’s ever happened to me. I worked with these people for most of my career, in one case 20 years, in one case 15 years, in another case 10 years and I could not believe that they would throw me overboard to try to save the firm and themselves. I was really stunned by it. I was shocked beyond belief. I don’t know what I could say beyond that.

Charlie Rose: Well you could say why you think they did it. I mean, did they save themselves anything because they had to pay $12 million and the firm?

Steve Rattner: It wasn’t the 12 million, that was part of it, but it was also getting the firm out from under so the firm could go on and do other things. They thought that by throwing me overboard that would endear them to the investors and to other people. That judgment seems to have been proven wrong according to “The New York Post” today, the firm is going into wind-down mode. So the way it looks is they threw me overboard and in effect got nothing for it.

Charlie Rose: And you also -- don’t you have an arbitration suit against them?

Steve Rattner: I do because they have damaged my reputation substantially by comments like that and I intend to show in the course of the arbitration that I didn’t do any of those things that you just read off there. Plus they withheld very substantial sums of money that I’m owed and -- look, I hate litigation. I don’t think I’ve ever been involved in some piece of litigation before in my life but I am going to see this one through.

Charlie Rose: Here’s what it seems to be like. Whatever this, whatever Attorney general is, he seems to me, based on the way he read his statement, “Steve Rattner was willing to do whatever it took to get his hands on pension fund money including paying kick-backs.” I mean, that’s --

Steve Rattner:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 13 - 11/22/2010

That’s his opinion. I disagree with him.

Charlie Rose: That’s the reason he said there’s two indictments.

Steve Rattner: They’re not indictments, they’re charges.

Charlie Rose: Charges, yes.

Steve Rattner: I understand you said that and I responded [unintelligible]

Charlie Rose: “Ill-gotten gains,” he says. “To be held accountable.”

Steve Rattner: Yes, but if you go and read what he has said about almost any other money manager that he settled with in the course of this, he said almost the same thing about all of them and yet he didn't demand of them anything like what he's demanding of me. So I come back to your question, is it emotion, is it politics, is it -- what is it? I don't know.

Charlie Rose: Tell me why you think -- what it is about the attorney general in your case that is different from the other cases as you see it.

Steve Rattner: I don't think -- there are different, always inevitably slightly different facts in any case. When I look at all these other cases, and I've been over them and over them and over them. I don't believe that I did anything worse than the rest of these people or different even particularly. I think it comes down -- nor do I believe I broke the law or even did anything wrong. I've explained to you about the hiring of Hank Morris. It was completely legal. I've explained to you that I never told Good Times to make that DVD. I think this comes down, honestly, my supposition, but you should get the attorney general in here and ask him, is that it comes down to emotion and politics. I don't know how else to account for it.

Charlie Rose: What's the political gain for him, why would he need this?

Steve Rattner: I don't know why he needs anything. As I have said, I've given up trying to predict or project every one of his body movements. I certainly would have thought the logical would have been for him to settle with me. So, you know, I can turn this around and say to you, well, why didn't you settle? What's the point otherwise? So maybe it's emotion.

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 14 - 11/22/2010

Carl Paladino [spelled phonetically] ran a lot of ads during this campaign saying “Why don't you go after Steve Rattner? Why don't you go after Steve Rattner?” Obviously Carl Paladino was gone. Maybe he felt some need to not have to answer those questions for the rest of his days as to why he didn't go after Steve Rattner. I don't know, Charlie. You're asking the wrong guy. All I can do is tell you that I didn't break the law, New York state law. I didn't do anything wrong in hiring Hank Morris. And I never told Good Times to make the Chooch [spelled phonetically] DVD.

Charlie Rose: It also is clear that you have decided to mount an aggressive defense of yourself and your reputation.

Steve Rattner: As you said in your introduction, I've been blessed by a lot of success in my career. I think I've had until now an unimpeachable reputation, at least for integrity. As I said in that clip, people have criticized me or not liked me, I get that, that's part of life. But nobody has ever questioned my honesty. And I'm not going to let Andrew Cuomo do that without answering it. So I do intend to fight back vigorously and to defend myself. And now is the first time I can speak about this. And in the course of litigation, a lot more evidence will come out that I think will be very persuasive.

Charlie Rose: What kind of evidence?

Steve Rattner: Well, like what I said before, the fact that there's not a scintilla of evidence that this DVD had anything whatsoever to do with why Quadrangle got money from the New York common fund. The fact that there's not a scintilla of evidence, in fact, there's substantial evidence to the contrary -- not a scintilla of evidence that anybody at Quadrangle -- and many people at Quadrangle were involved in this, by the way. Quadrangle people would like the world to think it was just me. It was not just me. These were matters --

Charlie Rose: So if you are guilty of this, then they are guilty too, even though they have made a settlement with the attorney general and perhaps they are acknowledging their guilt by -- they may very well be acknowledging their guilt by their settling with the attorney general.

Steve Rattner: That's the -- you can ask them. But the fact is the hiring of Hank Morris was a firm-wide project. I was certainly one who spoke to the CEO of Good Times about “Chooch.” But it was widely known in the firm that “Chooch” was -- Good Times was considering making this DVD. So I don't remember where we left this point.

Charlie Rose:

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 15 - 11/22/2010

Here's the point about this. And I have not looked at all these e-mails. People say that there is an e-mail chain here that is awfully damaging to you. You simply say “That's not true. There's no e-mail out there that has come out either from the firm or from a subpoena that is damaging to me or subject to misinterpretation.”

Steve Rattner: I wouldn't argue that there are emails that are subject to misinterpretation and therefore if they're misinterpreted, I wouldn't argue they're potentially damaging to me from a representational point of view. But if you really take the time to go through those emails one by one and see what was happening, you will see that I never told Good Times to make that DVD. Indeed, the whole reason there's a chain of emails back and forth is because they were thinking about it, and we were interacting about it. If I wanted them to make it, all I had to say was make it. I never did. And indeed as I said at the beginning of this, there are emails making clear that Good Times decided to make that DVD on its own.

Charlie Rose: What email do you wish you hadn't written?

Steve Rattner: Happily, I have not memorized these emails. But look, in retrospect, for the reasons you say, there are emails that could be read the wrong way. I suspect in your life you've written emails that could be read the wrong way. I wish I hadn't done that to the extent they are being read the wrong way. But it's very clear that I never told Good Times to make this DVD. I told them to do what was in their commercial interests.

Charlie Rose: Let's talk about the larger view that I also mentioned in the introduction. I mean, we talked about the partners in your firm. I mean, you left Lazard and put together your own firm, Quadrangle. You brought in Josh Steiner and people like that who I think you obviously thought, “These were men and women I'd like to work with.” Yes?

Steve Rattner: Correct.

Charlie Rose: What -- how painful can that be?

Steve Rattner: It's unbelievably painful. I went to a 50th birthday party for a friend of mine on Friday night. And he was surrounded by people from every aspect of his life, including people who had been his partners for 20 years. And I sat there thinking to myself, I'm going to have a 60th birthday party in a couple of years, and I wish I had partners sitting with me who'd been my partners for 20 years. It was extraordinarily painful. I honestly never in a million years would have imagined that my partners would have behaved this way.

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203 Charlie Rose - 16 - 11/22/2010

Charlie Rose: And the timing of this all for you, I mean, the -- the book “Overhaul” is there. General Motors, as I mentioned, just had a very successful IPO. This was to be your moment. And all of a sudden you are fighting, fighting for your reputation and whatever aspirations you have had may very well be damaged in order to go to Washington to use the phrase.

Steve Rattner: In one of the dark days of this long process, my wife who now works for Richard Holbrooke and was in Pakistan or Afghanistan or someplace was in despair. She couldn't reach me on the phone. And she was really upset about this. And I sent her an email. And I said, “I have the best wife in the world. I have four wonderful children. Everybody is healthy. We're financially secure and nothing else matters.” And that's how I think about this. At the end of the day, I have the four things that most matter to me. And whatever else happens in my career will happen. I'm proud of the work I've done over 35 years in business. I hope to do more, particularly in the nonprofit and the civic areas. But I have the things that most matter to me.

Charlie Rose: And you continue with your employment with Mayor Bloomberg.

Steve Rattner: I continue to do what I have done for Mayor Bloomberg.

Charlie Rose: Thank you for coming.

Steve Rattner: Thanks for having me.

Prepared by National Capitol Contracting 200 N. Glebe Rd., #710 Arlington, VA 22203