Henry Morris offers plea in NY fraud case

The former political consultant’s reported plea comes on the heels of news that Steve Rattner is close to a deal with the SEC.

Henry Morris, the former political consultant charged in New York Attorney General and Governor-elect Andrew Cuomo’s probe of corruption at the New York State Common Retirement Fund, has reached a plea deal with prosecutors, according to reports.

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 deal follows news last month that Quadrangle Group co-founder Steve Rattner, the subject of state and federal investigations of corruption at New York’s pension fund, was near a settlement with the US Securities and Exchange Commission. Rattner reportedly would have paid about $6 million and be banned for two years from the securities industry.

Hank Morris

Rattner arranged to retain Morris, the former chief political consultant to ex-New York Comptroller Alan Hevesi, as a placement agent and paid him more than $1 million, according to the SEC and Cuomo. Rattner also is accused of setting up a DVD distribution deal for a movie produced by the brother of a pension fund official.

Earlier this year, Quadrangle reached an agreement with Cuomo to pay $7 million to settle its case. At the time the settlement was announced, the firm accused Rattner of behaving in an “inappropriate, wrong and unethical” manner when Rattner hired Morris to solicit the New York State Common Retirement Fund for a commitment.

Hevesi pleaded guilty last month 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. 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.

At least six other people besides Hevesi have pleaded guilty in connection with the New York probe, 15 firms besides Quadrangle have settled and more than $139 million has been paid to the fund and the state.