Administration August 20, 2007

Probe Finds Brokerage Firm Got Millions in Business Because of Pension Fund Ties

August 20, 2007 (PLANSPONSOR.com) - Investigators looking at former New York Comptroller Alan Hevesi's activities during his four-year reign say as much as $18 million was paid to his former political consultant's brokerage firm, the Albany Times Union reported.

Reported by

Adrien Martin

New York State Attorney General Andrew Cuomo and Albany County District Attorney David Soares say that between $13 million and $18 million in investment related fess were paid by companies doing business with the $150-billion pension fund to Manhattan-based eSpeed – a company where Henry “Hank” Morris sat on the board.

The companies received large investments from the pension fund and paid a fee to Morris’ third-party firm for some reason, the source told the Times Union.

Investigators began looking into the link between eSpeed and the pension fund, along with payments in July (See Hevesi’s Sons and Cronies Engulfed in Pension Fund Probe ). They are also examining the pension fund’s investments in a hedge fund Third Point Capital, where Hevesi’s son is employed.

Cuomo and Soares’ probe into the connection between eSpeed and the pension fund is an extension of their inquiry into whether the officials in the state comptroller’s office may have improperly swayed the investment decisions of those running the state’s pension fund (See NY Comptroller Being Probed Over Conflict-of-Interest Activities ).

Hevesi resigned his position last year amid allegations that he abused resources by having state employees chauffeur his wife and help with personal chores (See Hevesi Missteps Could Trigger Removal – Eventually ). He pleaded guilty to a felony, but did not have to serve jail time.