One by one, over the past three years, former state Comptroller Alan Hevesi watched as his top aides and political pals pleaded guilty to their roles in a massive pay-to-play kickback scandal involving the state’s $150 billion pension fund.
Last Thursday morning, the Forest Hills resident walked into a Manhattan courtroom and joined the felonious fray. He pleaded guilty to receiving reward for official misconduct, a Class E felony under the Bribery Involving Public Servants and Related Offenses article of the State Penal Law, and faces up to four years in prison. State Attorney General Andrew Cuomo indicated that Hevesi, who was released on his own recognizance, will cooperate with the ongoing investigation.
“He was solely charged with protecting our pension fund, but he exploited it for his personal benefit instead,” Cuomo, the Democratic candidate for governor, said of Hevesi.
According to the Office of the Attorney General, Hevesi, 70, has acknowledged receiving nearly $1 million in gifts in exchange for approving a $250 million investment in Markstone Capital Partners LP from the state Common Retirement Fund. Elliott Broidy, Hevesi’s friend and fundraiser, was a principal of Markstone at the time. The firm received $18 million in management fees from the pension fund.
Broidy pleaded guilty last December to felony rewarding official misconduct for the gifts to Hevesi and other high-ranking public servants at the Comptroller’s Office in order to secure pension fund investments in Markstone.
The gifts Hevesi accepted from Broidy, a venture capitalist based in California, included $75,000 in travel expenses for the defendant and his family, $380,000 in “sham” consulting fees for a lobbyist friend and more than $500,000 in campaign contributions as directed by the former comptroller.
Cuomo’s office also said Hevesi admitted knowing that his top political advisor, Hank Morris, was using the pension fund to secure personal fees from deals, and steered investments to friends and political associates.
Morris and David Loglisci, chief investment officer of the pension fund, were indicted last year on 123 counts of enterprise corruption, securities fraud, grand larceny, bribery, money laundering, and other offenses for allegedly conspiring to sell access to the fund in exchange for millions of dollars in kickbacks and other payments for political and personal gain. Loglisci pleaded guilty earlier this year to one count of securities fraud. Morris is fighting the charges.
A New York Times report earlier this month detailed how Hevesi’s son, former state Sen. Dan Hevesi, has been tainted by the scandal since a private equity firm he operated collected lucrative fees for deals with the city pension fund.
Another son, Assemblyman Andrew Hevesi (D-Forest Hills), is linked to the probe through former state Liberal Party Chairman Ray Harding, who pleaded guilty last year, according to Cuomo’s office, to obtaining “over $800,000 in illegal fees on state pension fund investments as a reward for over 30 years of political support to Hevesi, including helping to open up a state Assembly seat for his son.”
Andrew Hevesi’s predecessor, Mike Cohen, abruptly resigned in 2005 for family reasons. He subsequently accepted a job with HIP, a position Harding helped secure.
Andrew Hevesi’s office did not return a call or e-mail seeking comment.
Alan Hevesi’s guilty plea marks the seventh secured by Cuomo’s office in the three-year investigation. It has also recovered $138 million for the state as a result of the continuing probe. Hevesi, a former professor of political science at Queens College, resigned his post as comptroller in 2006 after pleading guilty to a felony related to using state employees to chauffeur his ailing wife, Carol.
His sentencing is scheduled for Dec. 16.