Unless legislation bolstering ethics laws is enacted soon, New York will continue to be scarred by cases such as that of former state Comptroller Alan Hevesi, a leading good government activist told the Chronicle this week.
Hevesi, 71, was sentenced last week to one to four years in prison for his admitted role in a pay-to-play scheme involving the state pension fund. The former Forest Hills resident pleaded guilty to felony corruption last year.
“We’ve seen continued public corruption even after Alan Hevesi’s crimes came to light,” said Dick Dadey, executive director of Citizens Union, referencing the alleged illegal exploits of state Sen. Carl Kruger (D-Brooklyn), Assemblyman William Boyland Jr. (D-Brooklyn) and former state Sen. Pedro Espada Jr. (D-Bronx).“[Hevesi’s punishment] might make people pause, but I don’t think in and of itself it will lead to people stopping their activities.”
Dadey emphasized the urgent need for substantial ethics laws on the state books, ones that call for full disclosure of elected officials’ financial ventures and “stronger enforcement by independent entities.”
Ethics reform was a tenet of Gov. Cuomo’s campaign, and he has remained adamant about adopting new legislation that provides for the independent authority Dadey said is crucial to true transparency.
Hevesi copped 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, for accepting 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.
According to state Attorney General Eric Schneiderman, Hevesi acknowledged that during his tenure as comptroller, he was aware that Hank Morris, his top political advisor, was a paid placement agent in connection with pension fund investments, steered pension fund investments to friends and political associates and that Morris solicited campaign contributions from financial firms who appeared before the fund.
Morris received the same prison sentence in February, and was ordered to return $19 million to the state.
Schneiderman said Hevesi, who once taught political science at Queens College, was “appropriately punished” for abusing his power.
“Hevesi brazenly sold access to New York pension fund investments — a betrayal of the public trust that went to the heart of his duties as comptroller,” he said in a prepared statement.
A woman who has lived on Ingram Street near the Hevesis for decades echoed Schneiderman’s assertion.
“I can’t believe it,” she said, requesting that her name not be published. “I’m thrilled that he is [in prison.] But I thought he’d get away with it somehow. It’s disgusting.”
The sweeping investigation, which was initiated four years ago by then-Attorney General Andrew Cuomo, has resulted in eight guilty pleas to date. In addition to Hevesi and Morris, guilty pleas have been secured from former Chief Investment Officer David Loglisci; former Liberal Party Chairman Ray Harding; investment advisor Saul Meyer; hedge fund manager Barrett Wissman; unlicensed placement agent Julio Ramirez; and Broidy. These defendants are scheduled to be sentenced in the coming months, Schneiderman said.
Hevesi’s successor, state Comptroller Tom DiNapoli, noted that since taking office, he has “changed the way the pension fund does business so history cannot repeat itself. I have banned placement agents and pay-to-play practices, and I have increased transparency in pension fund transactions.”
However, DiNapoli believes more can be done.
“The punishment for breaking the law while performing a public duty must include pension forfeiture and increased fines and sentencing,” he said. “The pension forfeiture bill I proposed earlier this year would do just that. No public official who violates the public trust should be allowed to receive a taxpayer-funded pension.”
Asked why corruption scandals such as the one involving the pension fund persist in the Empire State, Dadey replied, “I think public officials think they won’t get caught.”