Comptroller Tom DiNapoli Statement on the Sentencing of Alan Hevesi

Today’s sentencing of Alan Hevesi is a welcome and just conclusion to a years-long saga. Mr. Hevesi betrayed the trust of all New Yorkers. His sentence is clear evidence that this type of criminal behavior will not be tolerated.

Since taking office, I have changed the way the pension fund does business so history cannot repeat itself. I have banned placement agents and pay-to-play practices, and I have increased transparency in pension fund transactions. But there is more that can be done.

The punishment for breaking the law while performing a public duty must include pension forfeiture and increased fines and sentencing. The pension forfeiture bill I proposed earlier this year would do just that. No public official who violates the public trust should be allowed to receive a taxpayer-funded pension. Passage of my bill would be a much-needed step in rebuilding the public’s confidence in its government.

Ex-car Czar Steve Rattner Settles Pay-to-play Scandal by Dan Primack - Fortune

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After more than a year of wrangling, obfuscation and name-calling, Steven Rattner has effectively 'fessed up to having done wrong.

The former car czar and private equity boss today agreed to pay $10 million in restitution to the State of New York, for his role in the state's public pension kickback scandal. He also has agreed to refrain from "appearing in any capacity" before any New York pension fund for the next five years.

This follows Rattner's earlier deal with the SEC, under which he agreed to repay $6.2 million and agree to a two-year ban from the securities industry.

In an official statement, Rattner said:

"I am pleased to have reached a settlement with the New York Attorney General's Office, which allows me to put this matter behind me. I apologize if during the course of this process there is anything I did that may have made reaching this agreement more difficult. I respect the work of the Attorney General and his staff to ensure that the New York State Common Retirement Fund operates properly and in the best interests of New Yorkers."

That's a far cry from what Rattner said just last month:

While settling with the S.E.C. begins the process of putting this matter behind me, I will not be bullied simply because the attorney general's office prefers political considerations instead of a reasoned assessment of the facts.

This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity — and I certainly did not violate the Martin Act. That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.

For the uninitiated, Rattner's restitution is based on his time as a co-founding partner of Quadrangle Group, a New York-based private equity firm that invested in media, communications and information services companies. Here's the rundown, based on legal filings (note, I'm cribbing what follows from earlier posts, because nothing in the settlement appears to alter the underlying allegations):

• Rattner secured a video distribution deal for the brother of New York pension fund CIO David Loglisci, via a (now defunct) Quadrangle portfolio company. The deal was done over the initial objections of portfolio company management. Not only does this indicate pay-to-play, it also would seem to mean that Rattner violated his fiduciary obligations to Quadrangle limited partners (not letter of obligations, but spirit).
• Rattner also helped connect Logiscli's brother with people at film channel IFC, in which Quadrangle was an investor.
• Presumably at Loglisci's suggestion, Rattner secretly hired Hank Morris as a "placement agent," in order to secure a $100 million fund commitment for Quadrangle from the New York State Common Retirement Fund (it was later increased to $150m). This came after Quadrangle's legitimate placement agents had only been able to secure between $25 million and $50 million. Morris got Quadrangle the money without ever setting up or attending any meetings with CRF on Quadrangle's behalf.
• Morris also helped get Quadrangle $75 million from New York City pension systems, via a third-party who since has pled guilty to securities fraud.
• One of Loglisci's brothers put Rattner in touch with potential investors on the West Coast. These included Elliott Broidy, who sat on the board of the Los Angeles Fire & Police Pension Fund. LAFPPF committed $10 million to Quadrangle, and Broidy has since pled guilty to felony charges of rewarding official misconduct.
• In 2006, Morris allegedly asked Rattner for a contribution to the reelection campaign of State Comptroller Alan Hevesi (Loglisci's boss, who last week pled guity to fraud). Rattner demurred, saying that he had a policy against making contributions to public officials with oversight over investments, Morris suggested that Rattner contribute the money via a third party. Soon after, Rattner tapped a Democratic donor who subsequently contributed approximately $25k to Hevesi (plus another $25k from the donor's wife). That donor was not identified in court documents, but appears to have been Haim Saban. A source tells me that Saban was unaware of Rattner's backroom shenanigans.

A few final thoughts on this story:

1. This could have been FAR worse for Rattner, and perhaps would have been were Cuomo not leaving the AG's office in just two days. Cuomo originally sought restitution of between $18 million and $20 million in private, and then bumped it up to $26 million in a pair of lawsuits (both dropped today, as part of the settlement). He also had precedent on his side, based on the $20 million shelled out by Riverstone Group founder David Leuschen, for other activities related to Hank Morris, New York pensions and the aforementioned film (a horrendous piece of dreck called "Chooch"). Finally, Cuomo also was seeking a lifetime securities industry ban.

Not only did Rattner get off relatively cheaply -- and never face possible criminal charges -- but he even got a bit of a PR boon by settling on a day when half of the world is on vacation (or still stuck at an airport, as the case may be).

2. On the other hand, the timing makes a bad week even worse for Mike Bloomberg. Hizzoner used to employ Rattner as his personal money manager, via a Quadrangle wealth management group, and still sort of does (the Quadrangle unit broke off into a new group with which Rattner is affiliated).

When asked about Rattner over the summer, Bloomberg said: "I don't think [Rattner] did anything wrong… I happen to think the charge against him is ridiculous... I've always stood up for anybody that works with me who gets attacked by the press." He has since stuck by his friend, refusing to cut ties with someone who has tacitly admitted to public corruption in Bloomberg's own state.

3. We've seen private equity kickback scandals in a variety of state pension systems, including California and New Mexico, but the New York affair was enabled by a sole fiduciary structure. It's not coincidence that the only other state with such a structure, Connecticut, was rocked by a similar scandal that ended up with its treasurer in prison. A bill was proposed last year to drop the single fiduciary in favor of a board structure, but went nowhere. It's almost as if New York legislators are begging for its public pensioners to again be defrauded.

4. Now that this is settled, here's hoping that Rattner will sit down to speak about the situation with an informed interviewer who sdoesn't mind asking hard questions. No, not you Charlie Rose. I'll officially throw my hat in the ring, but won't hold my breath...

Tom DiNapoli Picks Former DEC Chief Pete Grannis to Top Deputy Spot by Celeste Katz - New York Daily News

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So this was the fresh start that Controller Thomas DiNapoli wanted to make with his office?

DiNapoli this afternoon named one-time Assembly colleague and former state Environmental Commissioner Alexander "Pete" Grannis to serve as his first deputy controller. He also announced that current First Deputy Comptroller Mary Louise Mallick will serve as a senior policy advisor.

Both appointments are effective January 20.

“Pete Grannis has built a life-long reputation for vision, leadership, integrity and the ability to get things done,” DiNapoli said in a statement. “We’re facing some of the toughest times in New York State history. Pete's skills, leadership and expertise will help us face those challenges. New York is fortunate that Pete Grannis chose to continue his public service career with the Office of the State Comptroller."

Grannis was unceremoneously dumped by Gov. Paterson's administration in October after he complained about the impact of planned job cuts on his department. His selection as DiNapoli's top deputy is surprising since he doesn't seem to have a financial background.

"Bottom line is he knows state government," said DiNapoli spokesman Dennis Tompkins, who also argued that Grannis served on the Assembly Ways and Means Committee and has expertise in running a large state agency.

Grannis, Tompkins added, was among the candidates for controller when the Legislature chose DiNapoli to replace discgraced ex-Controller Alan Hevesi.

Grannis’s salary will be $165,000. Mallick will be paid $162,000 in her new position.

State Controller Thomas DiNapoli Asks for Resignations of 15 High-level Aides by Ken Lovett - NY Daily News

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State Controller Thomas DiNapoli has asked for resignation letter of 15 senior-level aides.

State Controller Thomas DiNapoli, who narrowly won election last month, is planning a major shakeup in his office, the Daily News has learned.

DiNapoli has asked for resignation letters from 15 senior-level aides. Among them are top deputy Mary Louise Mallick, chief investment officer Raudline Etienne and spokesman Dennis Tompkins.

Not everyone who submits a letter will automatically be gone, though one source said Mallick, who used to work for former Senate Majority Leader Joe Bruno, is on the chopping block.

Tompkins admitted a shakeup is coming, but wouldn't elaborate.

"He's looking to strengthen the operations and get a team in place for the next four years," Tompkins said.

While it's not uncommon to ask for letters of resignation upon taking office, it usually happens only when an office changes hands.

DiNapoli put in place nine of the 15 people he asked to submit resignation letters. The rest date back to disgraced former Controller Alan Hevesi's regime.

Stung by campaign attacks that he did not aggressively go after waste and fraud, DiNapoli is prepared to "step up the intensity" of state agency audits, a source said.

The Legislature appointed DiNapoli, a longtime lawmaker close to Assembly Speaker Sheldon Silver, in 2007, after Hevesi pleaded guilty to using state workers to drive his sick wife around.

DiNapoli spent his first term in office dealing with the fallout from a massive pay-to-play scandal that erupted under Hevesi's watch. Hevesi and key aides eventually pleaded guilty in the scandal.

Guilty Plea Expected by Ex-N.Y. Comptroller Alan G. Hevesi in Corruption Case by Danny Hakim and William K. Rashbaum - NYTimes.com

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Alan G. Hevesi, the former state comptroller, is poised to plead guilty to a felony corruption charge after a lengthy investigation into his office’s rewarding of pension investment business to firms that provided financial benefits to Mr. Hevesi and his aides, people with knowledge of the case said on Tuesday.

Barring an 11th-hour change of heart, Mr. Hevesi would become the highest-ranking state official convicted in the case and one of the most likely to serve time in prison: in 2006, he pleaded guilty to a separate felony after admitting he had used state workers to chauffeur his ailing wife, but avoided jail time in that case after he agreed to resign.

The pension investigation, conducted by the office of Attorney General Andrew M. Cuomo, is one of the longest running in Albany and came to symbolize the ethically troubled culture of the capital. It has focused on allegations that Mr. Hevesi’s friends, family and associates sold access to the state’s $125 billion pension fund, one of the world’s largest, to reward allies, pay back political favors and reap millions of dollars for themselves.

The deal comes as Mr. Cuomo, the Democratic nominee for governor, is seeking to burnish his credentials as a reformer who can clean up state government, and his office has been in plea negotiations with Mr. Hevesi’s lawyer.

Mr. Hevesi, a Democrat, has long maintained that he did not know of the wrongdoing taking place among his subordinates, and he has not been formally implicated in the scandal.

But last December, a California money manager, Elliott Broidy, admitted paying nearly $1 million in gifts in exchange for a $250 million investment from the pension fund. Mr. Broidy, according to the attorney general’s office, paid at least $75,000 to send a “very high-ranking” official in the comptroller’s office and the official’s relatives on five trips to Israel, including first-class airfare, luxury hotel accommodations and a security detail. The high-ranking official was Mr. Hevesi, people with knowledge of the investigation have said.

A guilty plea by Mr. Hevesi would not end the broader investigation. His former political consultant and confidant, Hank Morris, was indicted last year on 123 counts; he has denied wrongdoing and remains determined to fight the charges.

Also unresolved is the fate of Steven J. Rattner, the New York financier who led the Obama administration’s rescue of the auto industry. This year, the Quadrangle Group, the investment fund Mr. Rattner founded, paid $12 million to settle allegations that it paid kickbacks to win pension fund business, and said it was publicly disavowing conduct engaged in by Mr. Rattner.

Bradley Simon, Mr. Hevesi’s lawyer, was traveling in Europe and declined to comment. Mr. Cuomo’s office had no immediate comment. People with knowledge of the matter said no plea agreement had been signed yet.

It remains unclear what specific offense Mr. Hevesi would plead guilty to, or what wrongdoing he would admit.

But it appears that it was the fate of Mr. Hevesi’s two sons, Assemblyman Andrew Hevesi and former State Senator Daniel Hevesi, that led him to accept the plea deal. Their role in the investigation, and potential prosecution, have been a part of discussions over the plea agreement, people with knowledge of the case said.

Documents in the case have suggested that Mr. Morris, Mr. Hevesi’s most trusted political adviser, was the architect of the corruption in the comptroller’s office and reaped millions of dollars by acting as a gatekeeper for private equity firms and hedge funds looking to do business with the pension fund.

But the activities of Mr. Hevesi’s sons have also drawn scrutiny: investigators have questioned why an obscure firm operated by Daniel Hevesi was paid more than $1 million in fees for deals with pension funds in New York City and New Mexico, and whether any legitimate work was done for the payments.

Andrew Hevesi had more limited exposure in the case: Prosecutors say the state’s former Liberal Party boss, Raymond B. Harding, maneuvered to force a vacancy in an Assembly seat in Queens so that Andrew Hevesi could assume the position. Mr. Harding pleaded guilty last year after accepting more than $800,000 for doing political favors, prosecutors said, including securing a private sector job for Andrew Hevesi’s Assembly predecessor, Michael Cohen.

Andrew Hevesi did not return calls Tuesday.

The investigation by Mr. Cuomo’s office, and a parallel inquiry by the Securities and Exchange Commission, led to a nationwide re-evaluation of public pension practices and the role of placement agents, the middlemen who brokered business for the investment firms from the comptroller’s office. Last year, the current comptroller, Thomas P. DiNapoli, banned placement agents and other paid intermediaries from doing business with the state fund. The city comptroller, John C. Liu, has taken a less rigid approach; this year he ended a ban on placement agents put in place by his predecessor, but established other safeguards to curb abuses.

A number of other Hevesi lieutenants have been implicated in the investigation, which began in 2007 amid allegations that Mr. Hevesi’s former chief of staff, Jack Chartier, had obtained, among other things, a loan from Mr. Broidy for his friend, the actress Peggy Lipton from TV’s “Mod Squad.” Mr. Chartier has been cooperating with investigators, people with knowledge of the case have said.

In March, David J. Loglisci, the former chief investment officer in the comptroller’s office, pleaded guilty to securities fraud, saying he helped steer pension money to Mr. Hevesi’s political contributors and to companies that paid kickbacks to Mr. Morris.

The case has also entangled prominent New York figures and institutions. Last year, theCarlyle Group, the private equity firm that once employed the first President Bush, paid $20 million to settle charges related to the investigation.

The inquiry has also extended into Mr. DiNapoli’s office; a meeting between Mr. DiNapoli and a prominent Democratic fund-raiser and money manager has been the subject of scrutiny. Mr. DiNapoli has denied doing anything improper.

For some time, it has been clear that Mr. Hevesi was the ultimate target of the investigation. This year, after Mr. Loglisci pleaded guilty, he said in court that senior officials in the comptroller’s office had instructed him to clear investment decisions with Mr. Morris, an alarming admission since Mr. Morris was Mr. Hevesi’s outside political consultant.

At the time, Mr. Cuomo declined to discuss whether Mr. Hevesi was one of the senior officials, but said: “This is the chief investment officer. He did report directly to the comptroller, at that time Mr. Hevesi.”

Danny Hakim reported from Albany and William K. Rashbaum from New York.

Pay-to-Play Trial Looms for Former Alan Hevesi Aide Hank Morris by Melissa Grace and Kenneth Lovett - NY Daily News

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Former Alan Hevesi aide Hank Morris appears in court Thursday. Hermann for News

A state judge on Thursday said the bulk of a pay-to-play case against the top political aide to disgraced former Controller Alan Hevesi can move to trial.
Manhattan Supreme Court Justice Lewis Bart Stone dismissed 13 counts of the indictment against Hank Morris, but left in place 77 counts - including a criminal enterprise charge that carries a 25-year prison term.

The toughly worded 85-page decision seemed to support many of the arguments brought by Attorney General Andrew Cuomo.

Stone called Morris a "central figure of the criminal enterprise" who received $19 million in fees from companies that won pension fund business.

He said the evidence presented to the grand jury was "sufficient to sustain a finding that Morris conducted the criminal activities alleged in the indictment."

"Morris' scheme was to create a 'toll gate' for entry into the [pension fund] where only those who paid Morris' toll could enter," Stone wrote.

Morris was indicted last year on charges he spearheaded a scheme requiring kickbacks to himself or associates - or campaign donations to Hevesi - from firms looking for pension fund business.

Morris' lawyer William Schwartz gave a terse "no comment" as he left court yesterday. Morris' wife cried during the hearing. The case against Morris will resume Thursday.

Disgraced Pol Alan Hevesi, Aide Held Pension Talks, AG Andrew Cuomo Says by Kenneth Lovett - NY Daily News

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Disgraced former Controller Alan Hevesi. DelMundo for News

Disgraced ex-Controller Alan Hevesi met regularly to discuss pension fund business with his top political consultant - a key figure in the pay-to-play scandal.

Attorney General Andrew Cuomo charged in court papers Thursday that Hank Morris was "intimately involved in the day-to-day business" of the pension fund.

Hevesi has not been charged in the scandal, though Cuomo has repeatedly said the investigation is ongoing.

Cuomo contends Morris received kickbacks from investment companies - as much as $19 million - in exchange for securing pension fund business.

Morris, in his legal filings, doesn't deny using his connections to get pension fund business. He argues it may have been unethical, but insists it's commonplace in Albany - and legal.

Cuomo disagrees.

Hevesi's lawyer Brad Simon said his client "from time to time" met with Morris in his role as campaign manager. They discussed how to use the pension fund's performance as a campaign issue, he said.

"Alan Hevesi had no knowledge that Hank Morris was acting as a placement agent and personally benefiting in that capacity," Simon said.

Cuomo also charges that a Hevesi staffer gave the names of investors seeking pension fund business to Morris so he could solicit campaign donations.

Michael Cohen Floats Stock Tax in City Council Bid by Michael Lanza - Queens Chronicle

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Former Assemblyman Mike Cohen is hoping a big picture approach will put him over the top in his bid to fill the 29th Council District seat.

That’s why the Democratic contender is proposing a citywide issue at the center of his campaign. Cohen wants the city to reinstate a long forgotten tax on stock transactions to help fill looming holes in the city’s budget.

Cohen said reinstating the tax could add as much as $10 billion annually into state and city coffers.

“The tax is actually still being collected and being instantly rebated,” Cohen said. “So we know how much money is being collected.”

He deflected critics who claim the tax would spur an exodus by already ailing Wall Street firms.

“A million dollar trade under this proposal — the cost would be 50 bucks. In London, the cost would be $5,000. In Hong Kong, it would be $8,000. In Singapore, it would be $11,000,” he said. “This is as close to negligible as you can get.”

While Cohen is focusing much of his energy selling the stock tax issue — it doesn’t mean he’s not paying attention to local issues as well.

Cohen would fight to bring Doe Fund workers to help with sanitation services on busy streets including Metropolitan Avenue, Jamaica Avenue, Grand Avenue and Atlantic Avenue.“The sanitation services in these areas is just not up to snuff,” he said.

Cohen wants to add speed photo radar systems that would automatically ticket speeding drivers on dangerous streets like Queens Boulevard and Woodhaven Boulevard.

He would fight for communities to have a greater say in development issues, adding that many neighborhoods were unprepared for growth in the short term. He also would work to give parents the opportunity to send their kids to school locally and would push for subsidies to bring hospitals back to the area.

Cohen, whose resignation from the Assembly for a cozy six-figure job at insurance giant HIP opened the way for Andrew Hevesi to take the seat, continued to deny questions of foul play in the ongoing pension fund scandal. The move was cited in an investigation into disgraced former State Comptroller Alan Hevesi, who allegedly set up the switch in exchange for pension fund favors.

Cohen said he was unaware of any ulterior motives in the arrangement, and had taken the job because a family health crisis was impeding his ability to serve.

The candidate has not been named as a suspect in the investigation.

Comptroller Scandal: Crony Was Paid For Cohen’s Seat: AG Cuomo by Brian M. Rafferty - Queens Tribune

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Current Assemblyman Andrew Hevesi gained his seat only after an illegal payout to a political crony set in motion Assemblyman Mike Cohen’s move to a health industry job and pressure from then-Comptroller Alan Hevesi pushed for a quick special election, according to Attorney General Andrew Cuomo.

Raymond Harding, the former head of the New York State Liberal Party, was charged Wednesday with obtaining $800,000 in illegal fees from state pension fund in exchange for decades of political favors, one of which was facilitating Cohen’s departure from the Assembly.

“Harding helped [Michael Cohen] get a six-figure job at an insurance company to generate a vacancy in the Assembly seat,” according to Cuomo. An unnamed official in the Comptroller’s office, alleged to be un-indicted co-conspirator Jack Chartier, “helped arrange for the Queens Democratic Party to endorse Andrew Hevesi for the open seat. [Chartier] then met with an aide to [then-Gov. George Pataki] and requested that the Governor certify a special election for the vacant Assembly seat as quickly as possible, which would discourage competition for the seat. Andrew Hevesi was elected to the open Assembly seat in May of 2005.”

Cuomo was clear to point out that Andrew Hevesi was not aware of the deal that was cut to arrange for his seat. The criminal complaint also fails to clearly connect the dots between Harding receiving the money and his interceding to arrange the meeting between Cohen and HIP, which ended up giving Cohen a $150,000-a-year position in the insurer’s marketing department.

Andrew Hevesi had no comment on the indictment, but a spokesman was clear to point out Cuomo’s absolution of any knowledge the younger Hevesi may have had about the scheme. A Cohen spokesman said that the former Assemblyman would continue in his bid to replace Melinda Katz in the City Council.

The charges against Harding are the latest to come from Cuomo’s investigation into wrongdoing in Alan Hevesi’s office. A few weeks ago Cuomo secured indictments against Hevesi campaign consultant Hank Morris and the Comptroller’s Chief Investment Officer David Loglisci on 123 counts of corruption, fraud, money laundering, falsifying business records and grand larceny.

Alan Hevesi remains un-indicted, though in several sections of criminal complaints against all three, it appears that Chartier was acting under the direct orders of Alan Hevesi.

Hevesi was re-elected Comptroller in 2006, but quickly stepped down amid a scandal involving his un-reimbursed use of a state vehicle and chauffer to take his wife around town.

In the current investigation, in addition to his alleged influence in the Assembly seat, Harding is said to have been paid off for decades of political support on behalf of the Liberal Party, including for Alan Hevesi’s campaigns for Assembly from 1971-1993, Mayor in 2001 and State Comptroller in 2002.

According to Cuomo, Harding participated in a corrupt scheme devised by Hank Morris and David Loglisci to skew the process of selecting investments at the State pension fund to favor political allies, friends and family. “Morris and Loglisci allegedly made Harding a sham placement agent for three investments in order to repay him for past political favors to Hevesi,” Cuomo said. “Through investment deals with Paladin and Pequot, two private equity firms, Harding is charged with securing over $800,000 in sham placement fees.”

In May 2004 the state invested $20 million into Paladin Homeland Security, for which Harding received $300,000 in bogus placement fees, Cuomo said. In October 2005 and June 2006 the state pension fund invested $100 million into Pequot Diversified Offshore Fund, netting Harding $500,000 in bogus fees.

Cohen Talks About His Seat Scandal by Joseph Orovic - Queens tribune

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Michael Cohen asserts that his hands are clean.

The City Council candidate said he was unaware of any nefarious machinations that may have helped him attain his current six-figure job, leaving his seat open for then-Comptroller Alan Hevesi’s son Andrew to be rushed into his vacated Assembly seat.

“Nothing occurred to me that anything untoward, suspicious or illegal had gone on to in order for me to be interviewed by my current employer,” Cohen said in an interview with the Queens Tribune.

A criminal complaint from Attorney General Andrew Cuomo’s office claims a political operative gained $800,000 from the State’s pension fund in exchange for political favors, which included helping Cohen find his current job. Another unnamed official in the Comptroller’s office then pulled the strings ultimately leading to Andrew Hevesi’s win in a special election for the vacated seat.

The Attorney General’s complaint does not draw a direct line between the payouts and Cohen’s ability to get a $150,000-a-year job with insurance giant HIP. Cohen said by the time a meeting with HIP was arranged, he had already decided to vacate his seat due to a family illness that demanded he spend more time at home.

“My thinking of leaving was known with my colleagues in the Assembly; and then I was approached,” he said.

Cohen defended his current employment, saying he met HIP’s need for someone with strong ties to labor unions, and he currently retains this same position with the company.

While Cohen said he had a three-decades-long working relationship with the operative, thought by many to be Hevesi’s No. 2, Jack Chartier, they were never close friends. Still, he did not suspect any foul play when the job opportunity appeared.

He didn’t know “what motivated people or why they were doing it. I just accepted it as someone who was trying to help,” he said.

The operative, former head of the New York State Liberal Party Raymond Harding, was charged with securities fraud for receiving the state pension funds though he was not certified to be handling them as a placement agent.

Cuomo’s complaint states Cohen was approached by Alan Hevesi in 2003, asking to be notified should Cohen ever consider leaving office. When asked if the election of the younger Hevesi raised his suspicions, Cohen said, “Only because there are other people in the comptroller’s office I’ve known for some time. But you’re asking the million-dollar question. I can’t comment.”

But he quickly added he played no part in Andrew Hevesi’s election.

“It wasn’t a concern of mine who would succeed me. I wasn’t asked to help anybody to be my replacement. It was not my concern.”

Cohen said he has had “extensive conversations” with the Attorney General, and has not sought legal counsel regarding the investigation into Hevesi’s office.

The complaint’s revelations have changed the landscape of the 29th Council District race.

None of Cohen’s opponents demanded he bow out of the race to replace Melinda Katz, and most doubted any wrongdoing on Cohen’s part.

“I hope it all works out for him. I really hope the investigation does not reveal any improprieties,” said Heidi Chain, echoing the tone of other candidates that commented.

They all also said the decision to bow out of the race was purely his own to make - not theirs to demand.

Cohen acknowledged he now faces a cynical crowd of voters.

“I do expect the public to have a great deal of skepticism,” he said. “I know I’m going to have to deal with that. There are going to be a lot of people who are going to draw the worst possible conclusion about a situation. I personally have received no negative feedback.”

The case has also led elected officials in the State and City to call for a reform to the handling of pension funds. State Comptroller Tom DiNapoli and City Comptroller Bill Thompson both moved to ban the use of placement agents in the dispersal of pension funds, a direct nod to the system that allowed Harding’s alleged wrongdoing, as well as the indictments of others close to Hevesi.

Embattled Pol Spends $35G in Campaign Cash to Fght Federal Charges by Kenneth Lovett - NY Daily News

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Facing federal corruption charges, Assemblyman Anthony Seminerio has used $35,000 in campaign funds to help pay his legal fees, the Daily News has learned.

Seminerio's campaign cut the check to Rosedale lawyer Ira Cooper on Sept. 19, Board of Elections filings show.

Seminerio's campaign treasurer, Lisa Loughlin, confirmed the payment was for legal work connected to his arrest.

"According to a state Board of Elections ethics opinion, the expenditure is permissible," Loughlin said.

While not commenting specifically on Seminerio, state Board of Elections spokesman Robert Brehm said the board issued a formal opinion in 1989 allowing the use of campaign cash for legal fees if the charges are related to the holding of office or running of a campaign.

Blair Horner, of the New York Public Interest Research Group, blasted the use of campaign money for legal fees.

"This should be illegal," Horner said. "These are campaign funds, not legal defense funds."

Federal prosecutors filed corruption charges against Seminerio in September after an undercover investigation.

Seminerio is accused of pocketing $500,000 in payoffs through a sham consulting company that offered favors to entities with business before the state.

A preliminary hearing in the case is set for Dec. 10, by which time he could be indicted by a federal grand jury or make some type of plea.

Despite his lingering legal troubles, Seminerio, 73, this month ran unopposed for a 16th term.

Seminerio is not the first criminally charged state legislator to dip into his campaign account for legal fees.

- Former state Controller Alan Hevesi, who pleaded guilty to using state employees to chauffeur his wife, used at least $750,000 in campaign cash to pay his lawyers.

- Former Assemblyman Brian McLaughlin, who pleaded guilty to stealing more than $2 million, paid his lawyers $500,000 from his campaign coffers, but later refunded the money.

- Former state Sen. Guy Velella, who pleaded guilty to a felony charge of conspiracy to commit bribery in 2004, used $400,0000 from his campaign on legal fees.

klovett@nydailynews.com

Albany's Political "Crime Wave" A Glossary of Corruption in New York's Capital - Newzjunky

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Albany's Political "Crime Wave" - A Glossary of Corruption in New York's Capital

Senator Darrel Aubertine – ADMITTED he illegally hired his sister in violation of state Ethics law he sponsored. Penalty: $40,000 fine; ADMITTED writing letter to influence a town vote on wind power, while holding secret contracts to build turbines on land he owns.

Assemblywoman Gloria Davis (Bronx) – CONVICTED 2003, for taking bribes.

Senator Efrain Gonzalez (Bronx) – CHARGED with diverting tax dollars to buy homes, vacations and Yankees tickets.

Assemblywoman Diane Gordon (Brooklyn) – CONVICTED April 2008, for accepting bribes in exchange for votes. Penalty: Up to 10 years in prison.

Assemblyman Roger Green (Brooklyn) – CONVICTED 2004, for billing the state for transportation he received for free.

Comptroller Alan Hevesi (Queens) – CONVICTED January 2007, for stealing taxpayer funds by using state employees as a personal chauffeur for his family.

Assemblyman Brian McLaughlin (Queens) – CONVICTED March 2008, for stealing $2.2 million from Little Leagues and labor unions.

Assemblyman Clarence Norman (Brooklyn) – CONVICTED 2005, for selling judgeships in Brooklyn, stealing campaign funds and accepting illegal campaign contributions.

Secretary to the Governor Charles O'Byrne – ADMITTED he didn't pay taxes for five years.

Assemblyman Anthony Seminerio (Queens) – CHARGED with taking $500,000 in bribes from contractors doing business with the state.

Senator Guy Velella (Bronx) – CONVICTED 2004, for steering state contracts to favored

Fed Sheriff Takes on the Capitol of Corruption by Bill Hammond - NY Daily News Opinion

Albany's Hall of Shame

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Pin a star on the starched white shirt of U.S. Attorney Michael Garcia. He's the new Sheriff of Albany - and he has the bad guys shaking in their boots.

It's high time that someone with subpoena power imposed some law and order on the corruption-infested Hall of Shame also known as the state Capitol.

The politicians have been left to police themselves far too long, with the predictable result that taxpayers get fleeced.

"When it comes to ethics, Albany is Dodge City without Wyatt Earp," quips veteran watchdog Blair Horner of the New York Public Interest Research Group.

It makes what you might call a target-rich environment for someone like Garcia, an up-and-coming federal prosecutor with a sharp eye for official corruption.

He has just bagged his fourth state politician in three years, with the hint of more to come.

At this rate, they'll have to add a Garcia wing to the Albany Hall of Shame.

His latest contribution is a plaque bearing the mug of Queens Assemblyman Tony Seminerio, caught on FBI wiretaps peddling his modest influence at the Capitol for hundreds of thousands in payoffs from a hospital in his district.

In Garcia's words, Seminerio "put his office up for sale to those willing to pay the right price."

Previously, Garcia convicted another Queens assemblyman, Brian McLaughlin, of embezzling $2 million from taxpayers and union members - including money intended for Little Leaguers in his district.

He's also going after Bronx Sen. Efrain Gonzalez for allegedly skimming $400,000 from the state treasury. Gonzalez, who is fighting the charge, lost the Democratic primary to keep his seat last week.

But the biggest notch in the prosecutor's gun belt has to be ex-Gov. Eliot Spitzer, a failed sheriff of Albany who was forced to resign in disgrace after admitting he was the "Client No. 9" in Garcia's indictment of a high-priced hooker ring.

The Albany crime wave of the past five years has generated plenty of work for other prosecutors, too.

Manhattan District Attorney Robert Morgenthau put Bronx Sen. Guy Velella and Bronx Assemblywoman Gloria Davis in jail for taking bribes.

Brooklyn District Attorney Joe Hynes won corruption cases against two Assembly members from his borough, Clarence Norman and Diane Gordon.

Albany DA David Soares convicted former state Controller Alan Hevesi for using state employees to chauffeur his ailing wife.

Garcia is showing signs he may top them all in bringing about a much-needed cleanup crusade.

For one thing, he and the FBI reportedly convinced McLaughlin - who hasn't been sentenced yet - to help make the case against Seminerio by wearing a wire.

Getting one pol to flip on another could be the most effective way of blowing Albany wide open.

"I've made it a priority to take a hard look for corruption," Garcia said recently. "So there are resources looking, doing the investigations, following up on leads and tips, and that's going to produce results."

He says the common thread of the cases he has pursued is Albany's "lack of transparency" - his way of saying the pols are keeping far too many secrets. With billions of tax dollars changing hands behind closed doors, people are bound to get greedy.

So, will he be exposing still more corruption in the months ahead?

"What you can expect is we'll keep looking, that we'll maintain this level of commitment," Garcia said. "If it's there, there's a significant chance we'll find it."

Go get 'em, sheriff.

whammond@nydailynews.com