People to the manner born once deemed Manhattan apartment-living déclassé. A century ago, only ostentatious mansions—of Astors and other aristocrats—occupied "Millionaires' Row," the most gilded stretch of that blue-blooded artery, Fifth Avenue. But that all changed in 1912 when a luxurious new 12-story Italian Renaissance building rose near the Metropolitan Museum of Art. And it is here, in the marbled grandeur of a sprawling palazzo, that Wall Street veteran and onetime New York Times reporter Steve Rattner today hosts the beau monde of Manhattan.
The gatherings are like "a grand salon, a throwback to New York of old," says indie-film mogul Harvey Weinstein, who along with billionaire buyout king Henry Kravis, Internet mogul Barry Diller and assorted Democratic presidential hopefuls have gathered at Rattner's home for evenings of high living, highbrow discourse, high finance—and the high art of exercising influence.
From the wallets of donors wined and dined here, Rattner and his wife, Maureen White, have raised millions for the presidential runs of Hillary Clinton, Al Gore and John Kerry (White was formerly national finance chairman of the Democratic National Committee). And it is also in this sumptuous abode that Rattner cultivated lucrative ties to New York Mayor Michael Bloomberg. In January, Rattner's firm, Quadrangle Group, was tapped to manage the mayor's $16 billion-plus fortune, and in July, Quadrangle advised Bloomberg L.P., the financial-media empire he controls, on its repurchase of a $4.5 billion stake held by Merrill Lynch. "Steve Rattner has the ability to do almost anything," Bloomberg says.
So far anything, it seems, except achieving his loftiest ambition—to occupy one of the corner offices on Wall Street or in Washington. Though Rattner has cultivated the rich and powerful and become indispensable to them as a financier and fund-raiser, the brass ring still eludes this ambitious, 56-year-old former journalist. Among his many accomplishments in the financial world, running a top Wall Street firm is—glaringly—not one of them. (He came close at the prestigious Lazard Frères, making it as high as deputy CEO of the New York branch.) Nor has he managed to snare a cabinet post in D.C., something friends and associates say he has long coveted. In part, that's because Rattner keeps betting on the wrong horse—most recently Clinton, for whom he and his wife raised $2 million—though there is an outside chance his luck could change now that he is supporting Sen. Barack Obama.
Yet even if Hillary—or Gore, or Kerry—had won, many wonder whether Rattner could ever get a top Washington appointment without "CEO" on his résumé: after all, Treasury secretaries Henry Paulson and Robert Rubin both came from the corner office at Goldman Sachs. "It is a fair question," says Kravis. "Ask the average guy if he knows or has heard of Rubin, chances are he has. But not Rattner." He adds, however, that Rattner "has the brain power" for the job, and Bloomberg says he would be a "phenomenal" secretary of the Treasury.
The irony of all this is that Rattner's life already seems a charmed one. Ever since the first profile of him appeared 22 years ago in Washington Monthly magazine, Rattner's storybook life has unfolded in the press. Born in Great Neck, N.Y., the son of an aspiring playwright who owned a paint-making company, Rattner was a star reporter at The New York Times who left journalism in the early '80s for the world of high finance. Dubbed a Wall Street wunderkind, he built the media practice at investment bank Morgan Stanley, then landed a high-profile job at Lazard and, in 2000, launched Quadrangle, whose two private-equity funds now total $3 billion. Rattner has raked in an estimated $100 million plus at Quadrangle and has all the trappings of success: the Fifth Avenue palace, a showcase summer home under construction on Martha's Vineyard, and a plane he pilots himself.
Yet Rattner has his detractors. Even some of his admirers accuse him of being a hypercareerist with the journalistic savvy to promote himself above all else (none would say so on the record, for fear of incurring Rattner's ire). For example, some point accusingly to Rattner's newfound support of Obama—he and White have been trying to bring Hillary holdouts to the fold, and they are looking to raise at least $1 million for him. "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. On the other hand, maybe they just want to elect a Democrat. White, through a Quadrangle spokesman, declined to be interviewed.
Rattner's closest associates are downplaying his desire to move to Washington. They insist his priority is transforming the eight-year-old Quadrangle into a Wall Street powerhouse that will survive his eventual departure. "The main event is building the firm," says Peter Ezersky, a cofounder of the firm. Ezersky says there were internal discussions about Rattner's possibly leaving four years ago. "Around this time in the 2004 election, it was a more lively subject," he says. "But Steve is extremely engaged and fulfilled by what he's doing here now."
Among those engagements is Rattner's role as consigliere to New York Times scion Arthur Sulzberger Jr. Like most other newspapers, Rattner's alma mater is seeing its profits plummet as advertisers abandon print publications for the Internet. Rattner is working on ideas to help bolster the Times Co.'s fortunes and periodically briefs the board of directors, say people close to the situation who aren't authorized to speak for him or the Times. And he was pivotal, these sources say, in keeping two unwanted Times investors at bay: a fund managed by Morgan Stanley ultimately sold its stake in the company, and the Times reached a compromise with another dissident investor group by inviting two of its members onto the Times board.
Rattner is also said to be helping Sulzberger come up with a strategy to fend off increased competition from The Wall Street Journal, which mogul Rupert Murdoch has been fashioning into more of a general-interest paper. Ever since Murdoch's takeover of Journal parent Dow Jones, rumors have swirled that the Times will become the next family controlled newspaper to be sold. Bloomberg is often cited as a potential white knight (he has repeatedly denied it), and as an adviser to both him and Sulzberger, Rattner would seem to be in a unique position to broker any deal. But Bloomberg and Sulzberger say that isn't about to happen. "Because he's a friend of both of us, he couldn't represent either," Bloomberg says. (An interesting aside in all of this intrigue: Murdoch, among others, apparently indicated an interest in possibly acquiring, on friendly terms, the 20 percent stake in Bloomberg L.P. held by Merrill Lynch. One person involved in the dealings speculates the mogul's goal might have been to leverage the holding to combine Bloomberg and Fox Business News. But Murdoch never initiated talks with Merrill, and Rattner's Quadrangle handled the purchase for Bloomberg L.P.)
Rattner's association with the Times began in 1974, when the Brown University graduate was hired by renowned columnist James Reston as his clerk. He eventually landed in the Washington bureau and made a name for himself with sophisticated coverage of the energy and economy beats. And he befriended another upstart reporter: Sulzberger. "We've been workout buddies going on 20 years now," Sulzberger says.
But journalism wasn't Rattner's calling, despite his talents. In 1984 he headed for Wall Street, where he had been wooed to Lehman by Roger Altman, a former assistant Treasury secretary whom Rattner had met while covering the Carter administration's economic policies. "He was clearly just a brilliant guy," says Kathy Slobogin, a CNN producer and Rattner colleague at the Times in Washington. "He decided that rather than covering the players, he wanted to be a player." If he has his way, this player may again return to Washington—by way of a grand salon on Fifth Avenue.