Hevesi Adviser Gets Jail in Pension Fund Scheme

Henry "Hank'' Morris was sentenced Thursday by a judge in Manhattan

By Jennifer Peltz
|  Thursday, Feb 17, 2011  |  Updated 12:25 PM EDT
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Hank Morris, former top political adviser of New York Comptroller Alan Hevesi is escorted in handcuffs into Manhattan criminal court, Thursday, March 19, 2009, in New York. Morris and David Loglisci, the former chief investment officer in the comptroller's office, not seen in photo, face a total of 123 charges, including enterprise corruption, securities fraud, grand larceny, bribery and money laundering, according to the indictment. (AP Photo/Louis Lanzano)

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A former top political consultant to New York's disgraced ex-comptroller was led off to jail Thursday after a judge sentenced him to at least a year and four months in prison for his pivotal role in an influence-peddling scandal involving the state pension fund.

Henry "Hank" Morris, 57, apologized to the people of the state for undermining their faith in government before a Manhattan judge handed down the punishment.

""Words cannot express the depth of my remorse," he said, his voice and hands shaking as he read a prepared statement.

Supreme Court Justice Lewis Bart Stone was unmoved. He sentenced Morris to the maximum allowed under the law, then denied him time to put his affairs in order before going to prison.

"No. It's time to go," the judge said.

Morris pleaded guilty in November to securities fraud. He admitted using his connections to former state Comptroller Alan Hevesi and other officials who oversaw New York's massive pension fund to extract kickbacks from investment firms hoping to manage some of the funds' assets.

Over just a few years, Morris made $19 million in fees from companies awarded state business by Hevesi's office. Prosecutors with the state attorney general's office and the Securities and Exchange Commission claimed that firms that refused to play ball were given the cold shoulder, and had a harder time getting their foot in the door.

The scandal enveloped a number of state officials and money managers, including Steven Rattner, the Wall Street financier who helped lead the Obama administration bailout and restructuring of Chrysler and General Motors.

Morris, who rose to political prominence in the state as a campaign manager for Democrats, has agreed to forfeit his millions of dollars in fees. He will be eligible for parole after 16 months and would serve no more than four years behind bars.

""Throughout my life, I have believed in the potential for government to be a force for good in the lives of people. In fact, I devoted the bulk of my professional life to achieving that goal," Morris told the court before he was sentenced. "To recognize that my actions undermined those efforts has been very painful."

"Simply put, my actions undermined the integrity of New York State's government, and, most importantly, have led ordinary people to question their faith in the political system."

As he was led away, he told relatives and friends in the courtroom: "I love you. I love everybody. Thank you."

The pension fund investigation was initiated and led for several years by former State Attorney General Andrew Cuomo, now the governor.

Eight people pleaded guilty to criminal charges in the case, including Hevesi, who admitted taking campaign contributions and luxury vacations from one money manager seeking pension fund business, and David Loglisci, the pension fund's chief investment officer.

Several financial firms also paid more than $170 million in civil penalties for their actions, including well-known, politically connected firms like the Carlyle Group.

Rattner, who was accused of paying Morris $1 million to better his chances of landing an investment deal with the pension fund, ultimately paid $16.2 million to settle civil lawsuits filed against him by Cuomo's office and the SEC.

Attorney General Eric Schneiderman, who inherited the case from Cuomo, said Morris' sentence "sends a strong message to New Yorkers that those who abuse positions of power to line their own pockets will be held accountable by this office."

New York's $125 billion retirement pool is one of the world's largest government pension funds and richest sources of potential investment dollars.

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