Disgraced Ex-NY Comptroller Gets Prison in Pension Probe

Former state comptroller Alan Hevesi was sentenced Friday to one to four years in prison for his leading role in influence-peddling at the state's massive pension fund, capping a two-part downfall that made him an emblem of corruption in New York politics.

Hevesi, a Democrat who was forced from office after pleading guilty in a separate misconduct scandal in 2006, apologized to New Yorkers as he waited to hear his punishment for giving preferential treatment to a would-be pension fund money manager in exchange for free travel and other plums.

"Although it was never my intention, I know that I caused enormous damage to the integrity of my former office. I have publicly disgraced myself," Hevesi said, his voice soft but steady. "I have no one but myself to blame....

"I will never forgive myself. I will live with this shame for the rest of my life."

The 71-year-old walked out of court in handcuffs, looking back briefly at the roughly half-dozen relatives who accompanied him, including his sons, Assemblyman Andrew Hevesi and former state Sen. Daniel Hevesi, and his daughter, Laura.

The sentencing concluded a comedown that stood out even in a state rife with scandal, and it marked a milestone in then-state Attorney General Andrew Cuomo's sweeping probe of "pay-to-play" practices at the $141 billion retirement pool, which Alan Hevesi oversaw as comptroller.

Hevesi, also a former state assemblyman and New York City comptroller, was the highest-ranking state official entangled in the pension fund investigation. He pleaded guilty in October to a felony misconduct charge.

"Simply put, instead of using his power to protect the pension fund, he abused his power to pad his pockets and the pockets of his friends," said state Inspector General Ellen Biben, who built the case against him as an assistant attorney general and appeared in court Friday to push for prison time.

Manhattan State Supreme Court Justice Michael Obus gave Hevesi a sentence that will be the maximum for his crime if he serves it all. The range reflects the possibility of parole. With credit for good behavior, Hevesi can apply for parole in 10 months, according to the state Department of Correctional Services.

"Even in times of great cynicism about politicians and about public officials," the public still expects its officeholders to be worthy of their trust, the judge said. "When a person in that situation violates that trust, the damage, although hard to quantify, is quite profound. And this is such a violation."

Hevesi admitted that in awarding pension fund investments, he "improperly favored" a venture capitalist who paid for at least $75,000 worth of travel expenses to Israel and Italy for the comptroller, his family and other officials. Hevesi also acknowledged roughly $900,000 in other favors the businessman did for him or others in his orbit, including a total of $500,000 in campaign contributions to Hevesi and other candidates he or his staff suggested.

A former Queens College professor with a doctorate in political science from Columbia University, Hevesi won an Assembly seat in 1971. During 22 years in the chamber, he gained a reputation as an impressive debater, wrote more than 100 laws and was known for his work on health care.

Hevesi won the New York City comptroller's job in 1993, came up short in a 2001 bid for the Democratic nomination for mayor and took the statewide comptroller's election the next year.

As he ran for re-election in 2006, the state ethics commission found he had violated the law by using a staffer as a driver for his seriously ill wife for three years and not paying for it until after his Republican opponent raised the issue.

Hevesi was re-elected by a wide margin. But about six weeks later, he pleaded guilty to defrauding the government and resigned. He paid a $5,000 fine but wasn't sentenced to any time behind bars.

Over the next four years, Cuomo's investigation showed that pension fund officials and cronies got fees and favors from financiers seeking chunks of the fund to manage.

The retirement pool for state employees, plus local government workers outside New York City, is one of the nation's largest government pension funds and therefore a magnet for money managers. As comptroller, Hevesi was the fund's sole trustee.

"In the beginning, skeptics said it was business as usual, not a crime," Cuomo, now governor, said in a statement Friday.

But in the end, eight people have pleaded guilty. More than 20 other people and financial firms have agreed to pay a combined $170 million in civil penalties.

The probe swept up a roster of players in politics and finance, drawing guilty pleas from figures including the former head of New York's defunct Liberal Party and civil fines from people including former "car czar" Steven Rattner, the financier who helped lead the Obama administration's bailout and restructuring of Chrysler and General Motors.

In the wake of the investigation, current Comptroller Thomas DiNapoli made changes including eliminating the use of middlemen paid to help investment firms court pension fund business.

The only other person sentenced so far in the pension fund probe, former Hevesi political adviser Henry "Hank" Morris, is serving 16 months to four years in prison.

Plenty of powerful and promising figures in New York politics have seen their careers end in scandal.

Gov. Eliot Spitzer, a Democrat, resigned in 2008 after he was named as a client of a high-priced prostitution ring; he was never charged with any crime. Former Republican state Senate Majority Leader Joseph Bruno was convicted of a federal charge of using his public position to enrich himself; he is appealing.

About a dozen other elected and appointed state officials have been convicted or accused of crimes in the past two years.