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Alan Hevesi Facing Up to 4 Years Under Plea Deal in New York Pension Scandal

By DNAinfo Staff on October 7, 2010 12:57pm  | Updated on October 7, 2010 2:14pm

By Shayna Jacobs and Nicole Bode

DNAinfo Senior Editor

MANHATTAN – Former State Comptroller Alan Hevesi could face up to four years in prison after pleading guilty Thursday to accepting $1 million in gifts in a pay-to-play scheme to profit off of the state's multi-billion-dollar pension fund, the Attorney General's office said.

Hevesi admitted to one count of official misconduct, a felony, after steering the state's pension fund to invest in the company of California-based venture capitalist Elliott Broidy in exchange for $75,000 in travel expenses for Hevesi and his family, $500,000 in campaign contributions and $380,000 in bogus lobbying costs for a friend of Hevesi's former aide Henry "Hank" Morris, the AG's office said.

"I deeply regret my conduct and sincerely and deeply apologize to the people of the state of New York, the court and my family," Hevesi said during his plea in Manhattan Supreme Court on Thursday.

"I did not disclose the fact and circumstances of the benefits I received from Broidy to investment staff or others at the Office of the New York State Comptroller."

Hevesi said he used his position as the only trustee of the state's $125 billion pension fund from 2003 - 2006 to encourage the fund to invest in Broidy's holdings to the tune of $250 million.

In exchange, Broidy footed the bill for Hevesi's multiple trips to Israel and Italy, as well as the cost of travel for Hevesi's two children and some of his colleagues from the Comptroller's office, Hevesi said Thursday.

Broidy also picked up the tab for a campaign fundraising trip to California, Hevesi said.

Attorney General Andrew Cuomo, whose office is overseeing the investigation, has since recovered approximately $138 million of the questionable investments, his office said in a statement.

Hevesi turned himself in to officials Thursday morning and was taken in handcuffs to Manhattan Supreme Court, where he was arraigned in criminal court. He pleaded guilty a short time later during an appearance before Supreme Court Judge Lewis Bart Stone.

Hevesi was released on his own recognizance and will have to return to court for his sentencing Dec. 16. Under the terms of his plea, Judge Stone will be able to say whether to sentence Hevesi to as much as four years in prison or as little as probation.

The charges follow a massive investigation by Cuomo's office into the so-called "pay-to-play" culture in Albany, which has been cited as a prime example of the corrupt political atmosphere upstate.

Cuomo released a statement Thursday emphasizing that the Hevesi scandal has left the current office unscathed and that "Mr. DiNapoli is not involved in any investigation or matter in this Office."

DiNapoli's office also released a statement to the New York Observer Thursday seeking to distance himself from his predecessor's tainted legacy.

"Over the past three years, we've made huge strides to restore that public trust in the management of the pension fund," the Observer reported.

DiNapoli praised fellow Democratic candidate Andrew Cuomo for his "diligent investigation" which "has brought to public view the crime of the Hevesi administration."

Alan Hevesi had turned himself in Thursday morning to face public corruption charges.
Alan Hevesi had turned himself in Thursday morning to face public corruption charges.
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Spencer Platt/Getty Images

"The steps I've taken implement reforms to protect the fund from abuse. But Alan Hevesi's guilty plea as a result of the Attorney General's investigation is a stark reminder of the need for constant vigilance," DiNapoli continued, according to the Observer.

Cuomo has already charged Morris, Broidy and several others in conjunction with the three-year investigation. Morris was charged in a 123-count indictment of selling access to the pension fund in exchange for kickbacks and political favors. Broidy pleaded guilty last December to charges he gave $1 million worth of gifts to New York state officials in exchange for access to business with the state pension fund.

Cuomo has also reached a previous settlement with Bill White, the former president of the Intrepid Sea, Air and Space Museum who was a top Hevesi fundraiser.

Hevesi's prior felony guilty plea in 2006, to improperly using state workers to care for his disabled wife, is not being considered a prior infraction because the date of that felony came after the official misconduct he pleaded guilty to Thursday, officials said.