April 20, 2010; New York Times | It never hurts to have friends in high places, especially rich and powerful ones. The New York Times reports that because of their longtime friendship, money manager Steven L. Rattner, who has been accused of kickbacks, is being tapped to play a still unspecified role in connection with the financing of New York Mayor Bloomberg’s philanthrophic foundation.

Following last month’s announcement that the city’s deputy mayor will also run Bloomberg’s philanthropy, this latest development is only adding to what the New York Times has called a “somewhat rocky” public debut for the foundation. The newspaper says that Rattner, who recently served as the White House’s auto czar, allegedly made payments to win New York state contracts for his former investment firm. Now he is starting a new company to manage the mayor’s fortune.

Although his lawyers have denied any wrongdoing, Rattner’s former firm, Quandrangle, last week paid $12 million to settle allegations in the kickback case. While observers try to make sense of the mayor’s latest move, his other decision to make Deputy Mayor Patricia Harris chief executive of the foundation is still not sitting well with those who think it presents a conflict of interest.

The New York Public Interest Research Group and Common Cause New York are both on record saying they think for Harris to hold a government job while running the foundation is a violation of the New York City Charter. In light of all the heat that appointment is already generating, why would Bloomberg further risk damaging the foundation’s reputation? Neither the Mayor nor Rattner have provided any illuminating details and Stu Loeser, a spokesman for Bloomberg, limited his comments to saying, “He [Rattner] is a friend whose advice the mayor has and continues to rely on.”—Bruce Trachtenberg