Ex-Comptroller To Plead Guilty In N.Y. Pay-To-Play Case

Sep 29 2010 | 9:17am ET

Former New York Comptroller Alan Hevesi is set to plead guilty to corruption charges stemming from the pay-to-play scandal at the state’s public pension fund that ensnared several prominent alternative investments firm.

Hevesi is expected to plead guilty to at least one felony, although it is unclear what he will be charged with, The New York Times reports. Several former Hevesi underlings, including his closest political adviser, have already been charged in the scandal, and some have pleaded guilty. Hevesi had not been previously directly implicated in the case, which alleges that Hevesi’s associates demanded support for Hevesi and kickbacks for themselves in exchange for business with the $125 billion New York State Common Retirement System.

Hevesi resigned as comptroller in 2006 after pleading guilty to an unrelated charge involving using state workers as chaffeurs for his wife. He avoided jailtime then, but is likely to do time in the pay-to-play case.

Earlier this year, the former chief investment officer of the pension fund, David Loglisci, pleaded guilty to charges stemming from the case. Loglisci, who is cooperating with investigators, implicated Henry Morris, Hevesi’s top political adviser, saying that he controlled which alternative investment firms would receive allocations from the pension. In one case, the New York fund invested $150 million in a Carlyle Group and Riverstone Holdings fund after Riverstone founder David Leuschen invested $100,000 in a movie produced by Loglisci.

Morris has denied any wrongdoing, saying, “there was no crime here.”

All told, six people have pleaded guilty in the case, including Barrett Wissman, formerly of hedge fund HFV Asset Management. Earlier this year, private equity firm Quadrangle Group settled charges that that it paid about $1.1 million in bogus finder fees to Morris in exchange for a $100 million allocation.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...