Accused Pay-To-Play Ringleader Sees ‘No Crime’

Mar 23 2010 | 3:27am ET

The man at the center of the pay-to-play scandal at New York’s public pension fund acknowledges that his practices may have been unsavory, but were not illegal.

Henry Morris’ attorneys filed a 153-page response to their client’s indictment last year on charges of pension fraud. New York State Attorney General Andrew Cuomo charges that Morris, a top political aide to former state Comptroller Alan Hevesi, whose office oversaw the New York State Common Retirement Fund, demanded kickbacks and political contributions from money managers in exchange for awarding mandates from the pension.

The scandal has ensnared some of the biggest names in the alternative investments industry, including the Carlyle Group and Quadrangle Group. The only problem, according to Morris’ lawyers, is that none of it was illegal.

“The simple fact is that no matter how much the Attorney General disapproves as a matter of policy or ethics of the web of relationships that provided access and influence in the investment process, there was no crime here,” they wrote.

“In keeping with age-old traditions and longstanding practice in New York and nationwide, private equity and hedge funds frequently hire politically-connected attorneys, consultants, placement agents, finders or third-party marketers to facilitate introductions or access to staff, or to heighten their credibility when they are pitching the merits of their services. The private equity and hedge fund managers also, at times, make political contributions.”

Morris’ response comes just a week after David Loglisci, former chief investment officer of the CRF, pleaded guilty to violating the state’s general business law. He is cooperating with authorities.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

The Life Settlement: Yield For The Investor And Cash For The Consumer

Mar 31 2015 | 6:48am ET

Investors are languishing in a yield-starved, low-interest rate environment, looking...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note