Former NY Comptroller Gets Jail – and a Pension?

Attorney General Eric T. Schneiderman announced that Hevesi was sentenced to a term of one to four years in prison, the maximum sentence available by law. Hevesi, 71, pleaded guilty in October 2010 to a felony for his involvement in a pay-to-play kickback scheme while the head of the state Comptroller’s Office, specifically to charges that he received nearly $1 million in gifts in exchange for improperly favoring and approving $250 million in pension fund investments in private equity fund Markstone Capital Partners, L.P.  

“Today, Alan Hevesi was appropriately punished for abusing his position as New York’s Comptroller,” said Attorney General Schneiderman. “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. Today’s sentencing decision will help achieve my office’s principal objective of restoring New Yorkers’ faith in their state government. I’d like to thank Governor Cuomo and his team in the Attorney General’s Office for their work on this matter.”  

The sentencing decision was the second stemming from the long-running investigation by the Attorney General’s Office into corruption involving the Office of the New York State Comptroller and the state pension fund.  Last month, Hevesi’s former political advisor, Henry “Hank” Morris, received the maximum allowable sentence of one to four years in prison after pleading guilty to a Martin Act felony charge for his role in the pay-to-play scandal (see Morris Enters Pay to Play Guilty Plea). 

AG Schneiderman noted that under the sentencing guidelines, jail time wasn’t mandatory, “though it certainly should have been in this case”.  According to a press release from the AG, Hevesi is still eligible for his more than $105,000 annual pension, which the AG said was “completely outrageous”.  He went on to note: “Keep in mind Hevesi once had sole control over the nation’s third-largest public pension fund, valued at $140.2 billion as of Dec. 31. And even before this case was made public, Hevesi had been forced to resign in disgrace in December 2006 after pleading guilty to defrauding the state. That involved using a government employee to serve as a driver for his wife, and for other personal use.  Yet this guy still gets a taxpayer-funded pension? Incredible.” 

 The investigation has resulted in eight guilty pleas to date, according to the New York Attorney General.  In addition to Hevesi and Morris, the Attorney General’s Office notes that it has secured guilty pleas from former Chief Investment Officer David Loglisci; former Liberal Party Chair Raymond Harding; investment advisor Saul Meyer; hedge fund manager Barrett Wissman; unlicensed placement agent Julio Ramirez; and venture fund manager Elliott Broidy. “These defendants are scheduled to be sentenced in the coming months.”