A longtime adviser to New York's disgraced former Comptroller Alan Hevesi has been denied parole and will remain in prison for felony securities fraud stemming from an influence-peddling scandal at the state pension fund.
Political consultant Hank Morris told the parole board in a videoconference this week that he was wrong, poses no threat and paid about $19 million in restitution for what authorities called kickbacks from financial firms seeking roles in handling pension fund investments. Morris, 58, has spent a year locked up. He is serving 16 months to four years.
The board denied parole, concluding there is "a reasonable probability" Morris would break the law again if released now.
"It was a blatant conflict of interest," Morris told the three commissioners.
However, he said his fees were standard for representing investment managers, hedge funds and private equity managers seeking fund business, though he was also Hevesi's principal political consultant while also doing that starting in 2003.
He said he had asked an ex-federal prosecutor in advance whether the work would be a problem and was told that as a private citizen it would not.
Morris said his prosecution was an unprecedented use of New York's Martin Act against securities fraud by the attorney general's office.
"Honestly, I think the first time that I was aware that this was certainly illegal when the judge issued his opinion interpreting the law," he said, adding that he knew for a few years he was under investigation and got a lawyer.
Morris said his clients "performed spectacularly" making money for the fund for about 1 million government workers and retirees, and "the fundamental harm" was to government integrity and public faith in the political system. He paid income taxes on the $19 million and won't get that money back, he said.