Steve Rattner (pictured here), once one of the the most prominent bankers in the media business, is going to Washington after all. Except that the Quandrangle Group founder won’t be getting the “Car Czar” job he was originally supposed to take in the Obama administration, since that job never got created.

Instead, Rattner will be… something sort of like a Car Czar. But his official title will be “adviser.”

The New York Times explains the difference:

Mr. Rattner, 56, will advise Treasury Secretary Timothy F. Geithner and Lawrence H. Summers, the director of the National Economic Council, on reorganization efforts by General Motors and Chrysler, two carmakers that are receiving federal bailout money.

He was widely considered the front-runner to become the car czar, the Obama administration’s point person in mediating negotiations involving G.M. and Chrysler and parts suppliers, bondholders and unions. The car czar would have had a direct oversight role for the industry but the administration did away with that position last week, placing the auto bailout talks under Mr. Geithner and Mr. Summers. Mr. Rattner will still play a similar role but in an advisory capacity.”

Rattner is a former Times reporter who moved up quickly through the investment banking world and then formed Quadrangle in 2000. Which meant he rode the private equity/cheap debt roller coaster all the way up, and then back down. Big clients included Comcast (CMCSA), Sony (SNE) and Cablevision (CVC)–and New York City mayor Michael Bloomberg, who hired Quadrangle to manage his assets via a blind trust.

That relationship will continue, even though Rattner is unwinding his connections to Quadrangle–the company’s  Web site has already wiped him away. And Rattner will presumably continue to offer advice to his longtime pal, New York Times Co. (NYT) chairman Arthur Sulzberger Jr.

In other Barack Obama/media exec news, the White House has formally announced some of its digital hires. Former Blue State Digital consultant Macon Phillips, who most recently ran Obama’s Change.gov site, is his Director of New Media.

And, as I reported last month, former Google (GOOG) manager Katie Stanton will be Phillips’s Director of Citizen Participation.

More details from CNET here.