Hevesi Pleads Guilty To Felony Corruption, Cooperating with NYAG Cuomo

Alan Hevesi, former New York State Comptroller, pleaded guilty today to a single charge of felony corruption in the latest development in the state pension fund scandal.

Hevesi turned himself in today at State Supreme Court in Manhattan. He acknowledged receiving nearly $1 million in gifts in exchange for improperly favoring and approving a $250 million investment by the New York State Common Retirement Fund into Markstone Capital Partners, a statement said. Hevesi also admitted that he knew Henry “Hank” Morris, his top political aide, used the pension fund to personally receive fees for deals and steered investments to friends and political associates, a statement from Cuomo’s office said.

Hevesi’s sentencing is set for Dec. 16 and the former comptroller faces up to 4 years in jail.

Andrew Cuomo, who is running for governor, has been investigating the “pay to play” practices at New York’s Common Retirement Fund, which is valued at $124.8 billion, for the past three years. Hevesi was sole trustee of the fund. Cuomo has charged that the fund became “a piggy bank” for Morris, who reaped millions of dollars in fees from individuals and firms seeking to invest the state’s money, Reuters said. Morris is expected to stand trial and faces more than 70 charges, including enterprise corruption.

Cuomo’s investigation has resulted in seven guilty pleas, while 15 investment firms have settled and more than $138 million has been recovered.

Hevesi is cooperating with Cuomo’s investigation, the NYAG’s office said today. The former state comptroller resigned in December 2006 after pleading guilty to an unrelated charge of using a state employee to chauffeur around his disable wife.

The pension fund scandal has also embroiled Steve Rattner, cofounder of the Quadrangle Group. Rattner allegedly participated in the pay-to-play scheme involving private equity firms and the New York state pension fund. The investigation of Rattner is ongoing, Reuters said.