NY AG probe of Rattner over pension ties heats up

NEW YORK Mon Jul 13, 2009 6:37pm EDT

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NEW YORK (Reuters) - The New York attorney general's probe of investor Steven Rattner, related to how Quadrangle, the private equity fund that he co-founded, won business from New York's public pension fund, has "intensified" in recent weeks, a source familiar with the issues said on Monday.

Rattner is the departing head of the U.S. government's auto task force.

New York Attorney General Andrew Cuomo for over two years has been investigating the use of paid middlemen to win business from New York's public pension fund.

Rattner is one of several high-profile individuals linked to the probe. When the controversy broke in April, U.S. President Barack Obama stood by Rattner, saying he had not been accused of wrongdoing.

"I think it's more than likely that he (Rattner) will have to work out some kind of civil disposition," said the source, who declined to be named.

(Reporting by Joan Gralla; Editing by Leslie Adler)

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