A former top investment officer for New York's state pension fund admitted yesterday that he helped channel hundreds of millions of dollars in public retirement money to investment firms that paid kickbacks to other officials to get the business.
David Loglisci pleaded guilty to a securities fraud charge, becoming the highest-ranking member of former state Comptroller Alan Hevesi's administration to admit a role in the "pay-to-play" scheme.
"Investment decisions were made in part according to political benefit for the comptroller, rather than exclusively in the best interests of the people," Loglisci, 38, said in a statement read in court. "The political motivations for investment selection were chronic and institutionalized throughout the office, creating a culture of corruption at the highest levels."
It's unclear exactly how high those levels may go. State Attorney General Andrew Cuomo, who is conducting the continuing investigation, declined to say whether he believed Hevesi was aware of the pension fund scheme.
The investigation has spurred changes in state pension investment procedures.
Hevesi oversaw the roughly $150-billion pension pool from 2002 until late 2006, when he resigned after pleading guilty in an unrelated case involving the misuse of a state driver. He has not been charged in the pension probe and has denied any wrongdoing.
Loglisci had authority to decide how to invest the fund. It holds the retirement assets of more than 1 million state and local government employees and retirees.
Loglisci said he got and kept the high-profile job by letting Hevesi political adviser Hank Morris take control of many investment decisions and use them as political plums.
Morris gave the investment business to firms that contributed to Hevesi's campaign and paid hefty "placement fees" to Morris, his friends and other "senior officials," Loglisci said. The attorney general's office declined to identify the officials.
Morris has pleaded not guilty to racketeering, securities fraud and other charges in the pension probe. His lawyer didn't immediately return a call yesterday.
A lawyer for Hevesi said the former comptroller never told Loglisci to let Morris hold sway over the investment choices. "Any implication or suggestion to the contrary is patently false," said the attorney, Bradley Simon.