C M Y K A15
DAILY 03-11-10 MD SU A15 CMYK
THURSDAY, MARCH 11, 2010
KLMNO S
Economy & Business
A15
Runaway complaints
Guilty plea advances N.Y. state pension probe
Publicity of Toyota’s recalls appears to have had an effect on
the federal statistics regulators use to gauge the problem —
According to authorities, an
as complaints for unintended acceleration in some Toyota
Ex-official’s conviction
unnamed “senior executive” of
models have risen more than 100 percent since September.
Quadrangle met with Loglisci in
fuels speculation about late 2004 to solicit investments.
Average number of complaints for unintended
acceleration per 100,000 vehicles sold
prominent financier
That meeting was followed by an-
other in which Morris solicited a
“finder’s fee arrangement” with
As of Sept. 30, 2009 As of Feb. 3
by Tomoeh Murakami Tse Quadrangle. A Quadrangle affili-
Chrysler 1.83
ate then agreed to pay $88,841 for
1.72
new york — A former New the DVD distribution rights to a
Ford 3.53 York state official pleaded guilty low-budget film, “Chooch,” pro-3.12
Wednesday to a felony in connec- duced by Loglisci’s brother.
GM 0.880.82 tion with an alleged pay-to-play After the “Chooch” DVD dis-
scheme involving the state’s pen- tribution deal was struck, Loglisci
Honda 1.531.39
sion system, a move that legal ex- informed the Quadrangle exec-
NOTE: For model
perts said could bring the in- utive that the firm would be get-
Nissan 1.26
years 2005 to 2010
1.07
vestigation closer to one of Wall
CHRIS HONDROS/GETTY IMAGES
ting a $100 million investment,
Toyota 9.75
Street’s most prominent finan- New York Attorney General Andrew M. Cuomo said financier Steven authorities said. Quadrangle paid
4.81
ciers, Steven Rattner. Rattner and the firm he co-founded remain under scrutiny. Morris’s placement agency
SOURCE: Edmonds, NHTSA THE WASHINGTON POST Neither Rattner, who served for $1.125 million in fees. Sources
four months in 2009 as head of backs can be difficult to make be- Quadrangle and about a dozen close to the investigation have
the Obama administration’s auto cause prosecutors must show that other hedge funds and private- said the senior executive is Rattn-
NHTSA chief defends
task force, nor Quadrangle, the those involved knowingly paid for equity firms to middlemen who er.
private-equity firm he co-found- a specific gain. Such a scheme is connected the firms to New York’s Some experts warned that any
ed, has been charged with any seldom written down, and pros- $122 billion pension fund. The case against Rattner would hardly
response to Toyota flaws
wrongdoing. New York Attorney ecutors, therefore, often have to payments, or “placement fees,” be a slam-dunk. “Sometimes it be-
General Andrew M. Cuomo reit- rely on inside witnesses to make are common in the industry and comes a story about why that co-
erated Wednesday that both re- the connection. are not illegal. Authorities are in- operator is not reliable,” said Ste-
makers and consumer advo- main under scrutiny in investiga- “Loglisci is the person who can vestigating whether Quadrangle ven D. Feldman, a former federal
Strickland says agency
cates. tions by his office and the Securi- provide prosecutors with the keys and other investment managers prosecutor who is a partner at
did all it legally could
The industry, and Strickland, ties and Exchange Commission to the castle here,” said Robert A. knowingly participated in a pay- Herrick, Feinstein.
note that, overall, the rate of that are now in their third year. Mintz, a former federal prosecu- to-play scheme to get investments John Coffee, a law professor at
to address complaints
traffic deaths per mile traveled On Wednesday, David Loglisci, tor who heads the white-collar from the state pension fund. Lo- Columbia University, said, “Con-
has steadily fallen for more than who served as chief investment criminal defense practice at glisci was the sixth and highest- ceivably, there could still be a de-
a decade. officer of the New York state McCarter & English. “Anybody ranking official to be found guilty fense that Quadrangle thought
by Peter Whoriskey It’s an achievement the auto- comptroller’s office, pleaded who may have been involved with or to plead guilty in the probe. [the “Chooch” deal] was inde-
makers attribute to their innova- guilty to a corruption charge in a this scheme has to be very con- Loglisci is expected to help the pendently desirable.”
Federal regulators have faced tion, response to customer de- state court in Manhattan and cerned at this point that this in- prosecution in its case against “I don’t think the jury is going
torrents of criticism for not mov- mands and cooperation with the agreed to cooperate with the in- vestigation has with this plea Hank Morris, a former top adviser to buy that,” he added.
ing more aggressively against government. vestigation. Former prosecutors picked up a considerable amount to then-state Comptroller Alan Rattner and Quadrangle repre-
Toyota during years of com- But former NHTSA head Joan and legal experts said his cooper- of momentum.” Hevesi who also acted as a mid- sentatives declined to comment
plaints regarding runaway cars. Claybrook, who is also sched- ation could prove critical. The probe centers on millions dleman. Morris has said he is not Wednesday.
But the chief of the National uled to testify Thursday, argues Cases involving alleged kick- of dollars in payments made by guilty.
tset@washpost.com
Highway Traffic Safety Adminis- that much more should be done
tration, who testifies before a to protect drivers.
House committee Thursday, dis- In her view, car safety has im-
putes that criticism. proved because automakers
David Strickland, who was have been forced, either through
confirmed as NHTSA adminis- lawsuits or government require-
trator in December, says the rate ments, to improve their vehicles.
of complaints against Toyota, Even so, more needs to be done,
when compared with other mak- she said.
ers, was “unremarkable.” “There were 37,000 traffic fa-
And even if some statistics did talities in 2008,” Claybrook said.
point to a Toyota problem, until “That is a lot of death.”
someone pinpoints one of the One of the key focuses of the
sometimes elusive causes, there congressional inquiries into
is little the agency can do legally, NHTSA is the way the agency
he asserts. handled and investigated con-
“We have to find the vehicle sumer complaints regarding
defect that creates an unreason- runaway Toyotas.
able risk to safety,” he told a Sen- The agency reviewed the Toyo-
ate panel last week. “If we can- ta runaway-car issue at least six
not find that defect, we cannot times in the past decade, most of
go forward.” the time ruling it could find no
Exactly what NHTSA should basis for a recall or further in-
have done in response to years of vestigation.
B
complaints regarding Toyotas, In 2005, for example, Arizona
as well has how the agency resident Jordan Ziprin present-
should handle future com- ed the agency with 1,172 com-
plaints, will be the focus of the plaints in the NHTSA database
hearing Thursday before the that he said resembled his own
House Energy and Commerce problem with a Camry that ac-
Committee. It is the fourth con- celerated without his intending
gressional hearing in the past it. The agency restricted its
few weeks on the issue of how analysis to 432 of those reports,
Toyota and federal regulators saying that only that group re-
should have responded to grow- sembled the alleged problem.
ing concerns about the safety of Then it denied his petition to
the Toyota fleet. find a defect.
Toyota has recalled millions of The agency “has not identified
cars around the world, but on any vehicle-based cause to ex-
Tuesday, another report of unin- plain the reports, or uncovered
tended acceleration surfaced any evidence to indicate that a
when a 56-year-old housekeeper throttle control system failure
in a Prius sped down a driveway, occurred,” the agency said in re-
crossed a road and hit a stone sponse to Ziprin’s complaint.
wall. One of the proposals that will
N
E
O
AU
W
TY
TM
Lawmakers are weighing new be discussed Thursday is wheth-
regulation or enforcement er to allow the public to sue to
measures for the industry and force the agency to pursue an in-
the hearing is likely to draw con- vestigation.
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