Steve Rattner, the political and corporate financier and the founder of media PE and hedge fund Quadrangle Group, is officially leaving the firm as its main principle to join the Treasury Department as a lead adviser on the auto-industry bailout. This is not quite the car czar position as some had hoped for.  But in his new role, Rattner will advise Treasury Secretary Tim Geithner and Lawrence Summers, the director of the National Economic Council, on reorg efforts by GM and Chrysler, two carmakers that are receiving federal bailout money, reports NYT. Rattner was a financial reporter for the NYT, and later became a media and telecom dealmaker for the likes of Lehman Brothers, Morgan Stanley and Lazard, before starting his own firm. New York City mayor Michael Bloomberg has hired Quadrangle to manage his assets via a blind trust. (That relationship continues even as Rattner leaves.)

Rattner has been politically active for years, as a longtime Democratic contributor and backer of Senator Hillary Clinton’s presidential campaign. Some even speculated that he sought the Treasury secretary post in a Clinton administration, but of course that never came to be. He has no specific experience in the auto industry.

Quadrangle closed its media hedge fund in November last year after a string of losses, but it has been active in the media PE sector, owning stakes in the loss-making Alpha Media Group (parent of Maxim and Blender) and MGM. In 2007, Quadrangle brought on former Yahoo COO Dan Rosensweig to start its Silicon Valley office, but nothing has come out of it yet, as the credit crisis and the resulting dearth of PE deals continue.

Update: This has been announced by Quadrangle, which has also appointed Michael Huber and Joshua Steiner as co-presidents of the firm.