David Loglisci, former chief investment officer for the New York Common Retirement Fund, has pled guilty to felony charges related to the state’s pay-to-play investment scandal. He also has agreed to cooperate with the ongoing investigation, and could face up to four years in prison.
For the uninitiated, Loglisci was part of the scheme that included infamous “finder” Hank Morris. Here’s how it basically worked: A private equity firm would seek business from NYCRF. Loglisci would direct them to Morris, saying he was a NYCRF “gatekeeper.” Morris then would agree to work with the firm, in exchange for a commission on any fund commitment secured from NYCRF. It does not appear that Loglisci necessarily received a cut of the proceeds personally, but he did get to maintain his position of CIO (because Morris was a political ally of Hevesi). Plus, some PE pros invested in a film being produced by Loglisci’s brother.
New York Attorney General Andrew Cuomo has scheduled a press conference for 11:30am ET, and we’ll cover it as it happens…
Update 1: Cuomo’s office has issued a statement about the guilty plea. It reads, in part:
As part of his plea, Loglisci acknowledged breaching his fiduciary duties and violating the public trust by making investment decisions according to political benefit for the Comptroller, rather than in the best interests of the CRF’s members and beneficiaries. Loglisci admitted that he understood, but did not disclose, that Morris played three conflicting roles at the CRF: He was the paid outside political consultant to the sole trustee; he had a financial interest in multiple proposed alternative investments; and he made investment decisions, including with respect to deals in which he had a financial interest. ter than a little less.
Still waiting for the presser to begin (these typically start a bit late)…
Update II: Press conference begins… Here we go:
11:36: First mention of Chooch, the straight-to-video film produced by Loglisci’s brother. Some PE pros helped finance the film, as what seems to have been an obvious quid pro quo.
11:38: Cuomo is patting himself on the back. Someone wants to be governor…
11:38: “This investigation symbolizes the corruption that has been going on for decades in Albany… goes back 10, 20, 30 years. People knew about it and no one did anything.”
11:39: “Our investigation in many ways has spurred a national investigation.”
11:40: In Loglisci’s allocution, he said there was a “culture of corruption” in the Comtroller’s office. That would be ex-Comptroller Hevesi, by the way. Still no official word on if he’s under investigation. Cuomo previously said his office was looking into the actions of future officials, but declined to give names.
11:41: “Without legislative reforms, the same scam could happen today”
11:42: Moving onto Q&A…
11:43: NY Daily News asks if there’s reason to believe Hevesi knew what was going on beneath him. Cuomo says “we are not commenting about what Mr. Hevesi did know or didn’t know at the time.”
11:45: Cuomo says Rattner/Quadrangle is an ongoing investigation, no resolution imminent.
11:48: Albany Times asks if current Comptroller DiNapoli has done enough to institute reforms. Cuomo basically says “no.” Cuomo is right. The fact that NYCRF still operates under a single fiduciary is absurd.
11:50: Question about when a sentencing will occur, and what is status of Hank Morris case. Reply is that sentencing is set for June 17, but he actually will be sentenced at end of cooperation. On Morris, court says it will set trial date in June.
11:54: This is getting clear that Hevesi is involved. If not, who would be the “senior OSC officials” who directed Loglisci? Moreover, Cuomo says there is no evidence that Loglisci directly received part of Morris’ cut. Instead, he got promoted to CIO and got to keep the job. There’s only one person with the power to let him do that.
11:56: Call is over.