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Guilty!
The mastermind behind the massive state pension pay-to-play scheme that ensnared former Comptroller Alan Hevesi reached a plea deal with prosecutors yesterday — notching one of Attorney General Andrew Cuomo’s biggest victories over Albany corruption just weeks before he takes the governor’s office.
Hank Morris, who was a top political adviser to Hevesi, was awaiting trial on charges that he used the pension fund as a personal piggy bank — reaping millions of dollars as a middleman between the fund and the investment companies.
During a hearing, state Supreme Court Justice Lewis Stone said Morris had struck a deal with prosecutors to plead guilty to a felony, but did not divulge any details.
Morris could receive as much as four years in prison under sentencing guidelines. Another hearing has been scheduled for Nov. 22.
But the judge said that he is not ready to sign off on the arrangement just yet.
“The court is not willing to consider this on such short notice,” Stone said.
“In a matter as weighty as this, the court wants an opportunity to consider the papers,” he added.
Morris was one of the top targets in a sweeping probe — led by Cuomo — of one of the world’s largest public pension funds.
Cuomo’s office said Morris may have pocketed as much as $19 million after squeezing massive brokerage fees out of equity and hedge funds that wanted a piece of the state’s pension pot.
Those companies included the Quadrangle Group, then run by Obama-administration auto-industry czar Steven Rattner.
The plea comes after reports last month that Rattner, who was being probed by state and federal officials, is close to reaching a settlement with the federal Securities and Exchange Commission, sources said.
Stone said Morris’ scheme deprived the state’s 1 million pensioners of the “opportunity to have a safer, better or more balanced portfolio.”
Morris was indicted in March 2009 on 77 counts of enterprise corruption and other felonies after a two-year investigation.
Morris’ case was complicated by the fact that he was a personal consultant, not a state employee, law-enforcement officials said.
In fact, his lawyers had even argued that since he was not a state official, it was not illegal for him to lobby the Comptroller’s Office or to receive hefty fees for his help landing deals.
Morris’ attorneys could not be reached for comment.
Hevesi alone controlled the $125 billion pension fund until 2006, when he resigned after pleading guilty to using state workers to chauffeur his wife.
Hevesi, after agreeing to cooperate with investigators, later implicated Morris, who is accused of bribery and money-laundering.
“During my tenure as New York state comptroller, Morris solicited contributions to my re-election campaign from those doing business with the Common Retirement Fund,” Hevesi told a judge last month.
At least seven people, including Hevesi, have pleaded guilty in connection with the probe. Sixteen firms have settled and paid more than $139 million to the fund and the state.
Additional reporting by Dareh Gregorian and Fredric U. Dicker