David Loglisci, former chief investment officer for the New York State Comptroller’s office, pleaded guilty to charges that he helped steer investments of the $129.4 billion New York State Common Retirement Fund, Albany, to politically connected firms, state Attorney General Andrew M. Cuomo announced today.
Mr. Loglisci, who was indicted last year, will cooperate in the continuing investigation, Mr. Cuomo said in a news release.
“Looking back, I underestimated the problem of government corruption in Albany,” Mr. Cuomo told reporters in a telephone news conference, adding that there had been “decades of the same type of abuse” linked to the comptroller’s office. The state comptroller is the state pension fund’s sole trustee.
Mr. Loglisci pleaded guilty before Judge Lewis Bart Stone in New York State Supreme Court and was released on his own recognizance with unspecified travel restrictions, the news release said. Mr. Loglisci faces a sentence that could reach up to four years in prison.
He is scheduled to be sentenced June 17, although the date could change depending on his cooperation with investigators, Ellen N. Biben, special deputy attorney general for public integrity, said during the news conference.
The plea agreement with Mr. Loglisci is part of an investigation spanning two years into corruption involving the comptroller’s office under Alan G. Hevesi and the pension plan, according to the news release. Mr. Hevesi has not been charged.
Mr. Hevesi resigned as comptroller in December 2006, one month after winning re-election to a four-year term. He pleaded guilty to a single felony count of defrauding the government related to charges that he used state employees as chauffeurs and aides to his wife. In February 2007, a joint session of the New York Legislature voted for Thomas P. DiNapoli to succeed Mr. Hevesi.
“With today’s plea, a former top official overseeing the state’s single largest asset admitted that decisions were driven by politics and greed — not the best interests of the fund or its beneficiaries,” Mr. Cuomo said in the news release.
As part of his plea, Mr. Loglisci admitted fiduciary missteps while CIO from January 2003 through May 2007, the news release said. Mr. Loglisci acknowledged “breaching his duties and intentionally engaging in fraud, deception and concealment in connection with numerous investment transactions,” the news release said.
The news release added that Mr. Loglisci “acknowledged abdicating his authority to Henry ‘Hank’ Morris, the top political adviser” to Mr. Hevesi, “in order to help steer hundreds of millions of dollars worth of investment deals to Morris and to politically favored firms.”
Mr. Loglisci admitted in his plea that he understood but kept silent about the fact that Mr. Morris played three conflicting roles at the state pension plan: He was the paid outside political consultant to Mr. Hevesi; he had a financial interest in multiple proposed alternative investments; and he made investment decisions on deals in which he had a financial interest.
Mr. Morris was indicted last year along with Mr. Loglisci. Mr. Morris has pleaded not guilty. A court is expected to set a trial date in June, Ms. Biben said during the news conference.
Mr. Cuomo and Ms. Biben would not comment when asked about Mr. Hevesi’s knowledge of and/or involvement in Mr. Loglsici’s activities. Mr. Cuomo’s news release noted that Mr. Loglisci “admitted he had been instructed by senior (comptroller’s office) officials to obtain Mr. Morris’ approval” before approving or rejecting investment proposals.
“We are not commenting about what Mr. Hevesi knew or didn’t know at this time,” Mr. Cuomo said during the news conference.
“We have no comment,” added Ms. Biben. “This is an ongoing investigation.”