Morris to pay $19m in NY pay-to-play case

Henry Morris will pay $19m and accept a permanent ban from the securities industry in New York State as part of his guilty plea in New York’s pay-to-play pension investigation.

Henry Morris, the chief political advisor to former New York State Comptroller Alan Hevesi, has pleaded guilty to his involvement in New York’s massive pension pay-to-play scandal.

Attorney General and Governor-Elect Andrew Cuomo has accepted the felony guilty plea, in which Morris will repay $19 million in fees he received for steering investments from colleagues and friends to the New York State Common Retirement Fund.

Morris also faces up to four years in prison. His sentence will be determined on 1 February.

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.

“Hank Morris used his influence at the New York State Comptroller’s office to stockpile millions in fees for himself from state pension fund investments,” Cuomo said in a statement.  “Through his scheme, Morris personified pay-to-play corruption.”

November has been a busy month for Cuomo.

Hevesi pleaded guilty to a felony charge in connection to the pension pay-to-play scandal.

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 New York Common. Hevesi also acknowledged that, while serving as state comptroller, he was aware of Henry Morris’ using the pension fund for a pay-to-play scheme.

Also this month, Steven Rattner, the co-founder of Quadrangle Group, settled with the SEC, agreeing to pay $6.2 million and a two-year ban from “associating with any investment adviser or broker-dealer”, the SEC said in a statement.

Cuomo brought two lawsuits against Rattner, alleging he paid kickbacks to obtain $150 million in commitments to Quadrangle from New York Common. Cuomo’s lawsuits seek at least $26 million from Rattner and his immediate lifetime ban from the securities industry in New York.