A prominent political adviser linked to a state probe of improper influence on the New York State Common Retirement Fund said he committed no crime, adding that last year's indictment against him should be thrown out.
Henry “Hank” Morris, an adviser to former New York State Comptroller Alan G. Hevesi, says the investigation of him by New York Attorney General Andrew Cuomo isn't based on law but rather on a “theory” that Mr. Morris maintains is “unprecedented,” according to a 153-page response to the indictment filed March 17 by Mr. Morris' attorneys.
“The simple fact is that no matter how much the Attorney General disapproves as a matter of policy or ethics of the web of relationships that provided access and influence in the (Common Retirement Fund) investment process, there was no crime here,” according to the response, filed in New York State Supreme Court in New York.
“In keeping with age-old traditions and longstanding practice in New York and nationwide, private equity and hedge funds frequently hire politically connected attorneys, consultants, placement agents, finders or third-party marketers to facilitate introductions or access to staff, or to heighten their credibility when they are pitching the merits of their services,” the response states. “The private equity and hedge fund managers also, at times, make political contributions.”
Mr. Cuomo has been investigating so-called pay-to-play practices by which politically connected companies were steered investments of the $129.4 billion New York State Common Retirement Fund, Albany. The state comptroller is the sole trustee of the fund. Mr. Hevesi hasn't been charged in connection with the investigation.
Mr. Morris' court filing comes a week after David Loglisci, the former chief investment officer of the New York State Comptroller's office, pleaded guilty to charges of violating a New York securities law for helping politically connected firms do business with the state retirement fund.
In a related matter, Mr. Cuomo announced today that he has expanded his investigation of New York's pension system into “pension padding,” or “pension spiking,” the practice by which employees manipulate salaries and overtime payment so they can receive larger pensions.
“There is currently a striking variance in levels of retirement benefits paid across the state,” according to a news release from Mr. Cuomo. ”The average annual public pension payment in New York State is approximately $25,000, but pensions paid to some individual retirees top $300,000 per year and some retirees end up receiving more in pension than they received in salary.”