As New York’s Attorney General, Andrew Cuomo uncovered a sprawling network of “pay-to-play” political corruption involving the New York State Comptroller’s Office, and in particular Comptroller Alan Hevesi and his chief political consultant Hank Morris. The basic scheme involved Hevesi and Morris awarding huge investments from New York’s Pension Fund (which they controlled) to various firms in return for money and gifts. Morris managed to collect approximately $20 million by positioning himself as a so-called “placement agent” (essentially a middle-man or finder) and thereby collecting a percentage of the investments that the Pension Fund awarded to a favored firm.
Hevesi and Morris eventually both pleaded guilty to criminal violations of the Martin Act and were sentenced to jail. The various investment firms involved — including the Carlyle Group and Quadrangle — settled with New York and the SEC and were fined millions.
Others caught up in the scandal included New York Liberal Party Boss Raymond Harding and Obama’s former “Car Czar” Steven Rattner, who founded Quadrangle. Rattner eventually settled with the State for $10 million.
Alan Hevesi (Comptroller)
- Hevesi Pleads Guilty in Pension Case, New York Times (Oct. 7, 2010)
- Plea Bargain for Comptroller who got corrupt $1M, New York Post (Oct. 8, 2010)
- Hevesi Sentenced to 1 to 4 Years, New York Times (Apr. 15, 2011)
- Hevesi Plea Allocution
Hank Morris (Hevesi’s Chief Political Consultant)
- Hank Morris Pleads Guilty to Felony in Pension Pay-to-Play Scheme, agreed to pay back $19 million, New York Daily News (Nov. 22, 2010)
- Indicted Alan Hevesi Aide Hank Morris’ Shady Dealings Stretched Across U.S., New York Daily News (May 4, 2009)
- Follow the Pension Money, New York Magazine (July 26, 2009)
- Hank Morris Allocution
David Loglisci (OSC Chief Investment Officer)
- No Jail Time for David Loglisci, New York Daily News (Oct. 9, 2012)
- Former Hevesi Aide Pleads Guilty in Pension Case, New York Times (Mar. 10, 2010)
- David Loglisci Plea Allocution
Jack Chartier (OSC Chief of Staff)
- The Peggy Lipton Affair Brings Down Another Mogul, The Village Voice (Dec. 8, 2009)
- The Peggy Lipton Affair Takes Down Another Albany Big Shot, The Village Voice (Dec. 9, 2009)
- Peggy Lipton, the Girlfriend Who Sparked the Pension Investigation, The Village Voice (Apr. 29, 2009)
- Alan Hevesi: Shakedown at the Pension Fund, The Village Voice (Mar. 25, 2009)
Partial List of Firms and Individuals Implicated in Hevesi/Morris “Pay to Play” Scheme
- The New York Pay-to-Play Rap Sheet, Fortune.com (Oct. 7, 2010)
Elliot Broidy (Markstone Capital Group)
- Two Hevesi Cooperators Could Get Off Easy, New York Daily News (July 12, 2012) [David Loglisci & Elliot Broidy]
- Investor Elliott Broidy Given Wrist Slap for Role in Pension Fund Scandal, New York Daily News (Nov. 28, 2012)
Steven Rattner (Quadrangle Group)
- Pay-to-Play Rattner Agrees to Pen-$hun, New York Post (Dec. 31, 2010)
- Obama’s Chief auto Adviser Steps Down, New York Times (July 13, 2009)
- The Smartest Guy in the Room, Vanity Fair (Sept. 2010)
Carlyle Group
- Carlyle Group Reaches Settlement with New York in Pension Case, New York Times (May 14, 2009)
Quadrangle
- New York reaches $7 million Settlement in Alleged Pension Fund Scandal, Washington Post (Apr. 16, 2010)
Raymond Harding (Liberal Party Chief)
- Harding takes Harding Scalp in Pension Scandal, Village Voice (Oct. 6, 2009)
- No Jail Time for Ex-Political Boss in Pension Case, New York Times (May 18, 2011)
- Raymond Harding Plea Allocution
Saul Meyer (Aldus Equity)
- Aldus Equity Founder Saul Meyer Pleads Guilty to Role in New York Pension Scandal, Alt Assets (Oct. 7, 2009)
Kevin McCabe (GKM/NY Venture Capital Fund)
- Firms needed to play politics to do business with NY state pension fund under Controller Alan Hevesi, NY Daily News (Apr. 16, 2010)
- McCabe Agrees to Settle Cuomo Probe for $535,000, Lawyer Says, Bloomberg News (Nov. 3, 2009)
- Kevin McCabe Agreement of Discontinuance
Darius Anderson (Platinum Advisors LLC)
David Leuschen (Riverstone Holdings)
- Leuschen to Pay $20 Million to Resolve Pension Probe, Bloomberg News (Dec. 9, 2009)
- Equity Fund Pays $30 Million in Pension Fund Case, New York Times (June 11, 2009)
Patricia Lynch (Patricia Lynch Associates)
- Attorney General Cuomo’s Press Release
- Cuomo Slaps Ban, Fine on Pat Lynch Firm, The Business Review (Dec. 8, 2010)
Jerry Weiss (LW Strategies)
- Law Firm Hiscock & Barclay Gave Cuomo $45,000 During Investigation in Pension Scandal, New York Daily News (Dec. 12, 2010)
- Cuomo Reaches Settlement with Second Albany Lobbyist, The Business Review (Dec. 9, 2010)
Agreements of Discontinuance