Steven Rattner seemed to live a charmed life in New York for the longest time. He was a New York Times' wunderkind reporter (James Reston's assistant, a coveted post in a bygone era) turned Morgan Stanley banker and then later major fund-raiser for the Democrats. His investment firm Quadrangle had a terrific record and reputation. But is it all crashing down now, as he tries to move into public service?

The SEC has named his firm in a complaint about middlemen and pensions. This has long been a hazy area, and frankly I'm surprised that Rattner would stoop to hiring a middleman of questionable repute. He will rue the day he met him. The New York Times reports that Rattner turned to a now-indicted middleman only after a New York pension official told him that all investment firms that want business have placement agents. He also figures in a similar controversy about fund raising in New Mexico. He has not been charged with any wrongdoing as of now. It's unclear how this will affect his ability to revamp the auto industry for the Obama Administration. Certainly, it is a distraction. 

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