Update below: Wall Street Journal Removes 'Probe' From Headline, edits article text.

The Wall Street Journal is reporting that the man lovingly referred to as the "D.N.C.'s A.T.M.," by the New York Times is under scrutiny by the SEC in an alleged kickback scheme involving New York state's pension fund. The pay to play scheme has already resulted in the arrest of a top political fundraiser in a "123-count state criminal indictment that included money-laundering, enterprise-corruption and bribery charges."

Steven Rattner, the leader of the Obama administration's auto task force, was one of the executives involved with payments under scrutiny in a probe of an alleged kickback scheme at New York state's pension fund, according to a person familiar with the matter.

A Securities and Exchange Commission complaint says a "senior executive" of Mr. Rattner's investment firm met with a politically connected consultant about a finder's fee. Later, the complaint says, the firm received an investment from the state pension fund, then paid a $1.1 million fee.

The "senior executive," not named in the complaint, is Mr. Rattner, according to the person familiar with the matter.

Apparently the Obama administration was informed of the investigation during the transition yet they still went ahead with the appointment.

The New York Times nearly glorified Mr. Rattner a month ago as the announcement about the auto post was made; they even published a personal e-mail from Rattner to friends announcing his departure. Here is a partial preview of how big bucks hedge fund managers that help fund the Democratic Party are treated by the New York Times:

From: Steven Rattner
Date: Mon, 23 Feb 2009
Subject: Some news

With apologies for the impersonal nature of this, I wanted to let you know directly that after 26 fulfilling years on Wall Street — capped by the opportunity to help form Quadrangle Group with so many talented colleagues — I have begun a new phase of my life, in the public sector.

[...]

We are obviously at a critical moment in our nation’s history, particularly with regard to our economy, and I am honored to have this opportunity to serve my country in a meaningful way. I value our friendship and hope we can stay in touch in the years ahead.

Best,
Steve

The only thing missing is XOXO.

That the New York Times would afford Mr. Rattner such glowing treatment is no surprise considering that he is a former New York Times finance reporter and personal friend of New York Times publisher Arthur Sulzberger Jr.

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.

But the real story behind Mr. Rattner and how the press eventually chooses to cover the allegations is his close ties to the Democratic National Committee and in particular Hillary Clinton. Mr. Rattner's wife is the former National Finance Chair of the DNC and was also Hillary Clinton's finance co-chairwoman.

The millions of dollars they raised for the Democratic Party probably explains why people think that pay to play is just part of the game. (I'm from Illinois, call me a pessimist).

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). (src. Being Mr. Big - Newsweek, August 2, 2008)

Of course we would never expect these relationships to affect how the media covers such a blockbuster story. After all, if the nation's premier news outlets can afford 60 reporters to cover the droppings of the new White House dog surely they will chomp at the bit to cover this latest news. Who knows, some in the press might even give it a fancy moniker, something catchy like "Culture of Corruption".

One can dream.

Update: Not that big of a deal but worth a mention. The Wall Street Journal changed their original headline, removing the word "Probe" and replacing it with "Inquiry".

The newly edited version of the article added the following clarifications in addition to rearranging the text for clarity.

3rd paragraph, end: "Neither Mr. Rattner nor Quadrangle has been accused of any wrongdoing. Mr. Rattner did not return calls for comment."

In my experience newspapers often update stories and add clarifications so I wouldn't read too much into the edits. 

Terry Trippany is The Watcher at Watcher of Weasels. The image accompanying this article was cropped from a file photo in the New York Times. Go Blackhawks!