Former New York state comptroller Alan Hevesi pleaded guilty Thursday to a felony charge in connection with the wide-ranging pension pay-to-play scandal involving New York’s massive $125 billion pension system.
Hevesi, who served as state comptroller from 2003 to his resignation in 2006, admitted to accepting nearly $1 million in exchange for approving a $250 million investment in Markstone Capital Partners from the New York State Common Retirement Fund. He will cooperate in New York attorney general Andrew Cuomo’s ongoing pension fund investigation and faces up to four years in prison.
It was widely reported in recent weeks that Hevesi had offered to plead guilty in the investigation. In addition to the guilty plea, Hevesi also acknowledged that, while serving as state comptroller, he was aware of his former political advisor Henry Morris’ using the pension fund for a pay-to-play scheme. Morris was one of the first people charged in the investigation for allegedly masterminding the scheme to collect sham finder’s fees from private investment firms in exchange for directing pension money their way.
The pension system’s former chief investment officer, David Loglisci, also pleaded guilty in the probe and is cooperating.
At least four others, including Aldus Equity founder Saul Meyer, have also been charged as part of the three-year old investigation, which has so far resulted in guilty pleas from seven individuals.
In July 2009, La Jolla, California-based PCG Capital Partners agreed to turn over $2 million to attorney general Cuomo as “restitution” to the pension. The firm was one of several private equity managers, including Falconhead Capital Partners, Riverstone Holdings and HM Capital, to settle cases with Cuomo related to the scandal. According to a statement from the attorney general’s office, Falconhead paid $1.3 million as a result of the settlement.