NY probe of Rattner over pension ties heats up

NEW YORK (Reuters) - A probe of investor Steven Rattner by the New York attorney general has "intensified" in recent weeks, a source familiar with the matter said on Monday.

The probe concerns how Quadrangle, the private equity fund that Rattner co-founded, won business from New York's public pension fund.

"The attorney general's office has been seeking additional documents from Quadrangle concerning the New York pension fund investments," the source said.

Rattner is the departing head of the U.S. government's auto task force. When the controversy broke in April, U.S. President Barack Obama stood by Rattner, saying he had not been accused of wrongdoing.

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.

Among others caught up in the investigation, private equity firms The Carlyle Group and Riverstone Holdings LLC and a California pension adviser have paid steep fines and agreed to a new code of conduct to settle their involvement.

(Reporting by Joan Gralla; Editing by Leslie Adler, Gary Hill)