Tuesday, October 6, 2009

October 7, 2009
Ex-Political Boss Pleads Guilty in Pension Case

ALBANY — Raymond B. Harding, one of the last of New York’s political bosses, admitted on Tuesday that he had accepted more than $800,000 in exchange for doing favors for Alan G. Hevesi, the former state comptroller; among the favors was a scheme to secure an Assembly seat for Mr. Hevesi’s son.

The guilty plea by Mr. Harding, who was once a leader of the small but influential Liberal Party in New York, was one of the more dramatic developments in a corruption investigation by the state attorney general, Andrew M. Cuomo, who is scrutinizing fees paid to associates of Mr. Hevesi by investment firms seeking business with the state’s pension fund.

Mr. Harding’s admission made for an inglorious final chapter in the political life of a power broker whose influence was felt from New York City to Albany.

The Liberal Party made the most of its tiny membership, usually less than 1 percent of all registered voters, and the lure of its ballot line. The party helped propel many prominent political careers, including those of Senator Jacob K. Javits and Edward I. Koch, a Democrat who probably would not have been first elected to Congress from a Republican district without its support.

Mr. Harding, 74, was a particularly close political ally of former Mayor Rudolph W. Giuliani, who put two of Mr. Harding’s sons, Robert M. and Russell A., on the city payroll. Court filings have indicated that Mr. Harding sought money from investment firms in part to pay legal bills for Russell Harding, a former Giuliani aide who pleaded guilty in March 2005 to embezzlement and possession of child pornography.

Mr. Cuomo’s investigation seems to be moving closer to Mr. Hevesi himself and further entangling Hank Morris, Mr. Hevesi’s longtime political confidante, who was charged in March in a 123-count indictment with selling access to the pension fund. Mr. Cuomo said Mr. Harding, who faces up to four years in jail, is cooperating with his inquiry. “We believe he can be extremely helpful,” Mr. Cuomo said.

The case has focused on the state’s $116.5 billion pension fund, and how people close to Mr. Hevesi exploited their relationship with the former comptroller to enrich themselves. The comptroller serves as the fund’s sole trustee, a relatively unusual arrangement that gives him ultimate authority over what firms are allowed lucrative contracts to manage the fund’s money.

Mr. Harding said Tuesday in court as part of his guilty plea that he had been installed by Mr. Morris on several deals as a sham intermediary between the pension fund and investment firms, including Pequot Capital Management, a once-prominent hedge fund.

Mr. Harding had an alliance with Mr. Hevesi that was decades long. Mr. Hevesi received the endorsement of the Liberal Party in races for mayor of New York City and state and city comptroller.

Mr. Harding said that in 2004 and 2005, he helped arrange a $150,000-a-year job for a Queens assemblyman, Michael Cohen, at the Health Insurance Plan of New York; Mr. Harding had been a lobbyist for the company. Mr. Harding said that he had cleared the seat because he had heard that Mr. Hevesi wanted it done “to create a vacancy in the Assembly for his son, Andrew, to fill.”

After Andrew Hevesi was elected to the Assembly in 2005, Mr. Harding said, the elder Mr. Hevesi thanked him for helping out.

Mr. Harding pleaded guilty to a felony related to securities violations under the Martin Act, a sweeping state securities law. Gary Naftalis, a lawyer for Mr. Harding, declined to comment on the plea.

Mr. Hevesi resigned in late 2006 after pleading guilty to a felony related to his use of state workers as drivers for his ailing wife, after an investigation that eventually broadened to include corruption in the state pension fund.

Bradley Simon, a lawyer for Mr. Hevesi, maintained on Tuesday that his client had played no role in any pension schemes. “As we have maintained for the last several years,” he said, “Alan Hevesi had no involvement in, or knowledge of, any wrongdoing, or any quid pro quo, related to the New York State Common Retirement Fund.”

The Cuomos and the Hardings have their own history. Mr. Cuomo battled Mr. Harding for control of the Liberal Party when his father, Mario M. Cuomo, was governor. The party backed the younger Mr. Cuomo in his 2002 bid for governor, a fateful decision. After Mr. Cuomo dropped out of that race, the party failed to attract the 50,000 votes necessary for it to remain on future ballots and lost much of its clout.

Mr. Cuomo’s office also said on Tuesday that Saul Meyer of Aldus Equity, a Dallas firm that consulted with the pension fund, had pleaded guilty to a similar charge that had been sealed since Friday. Mr. Meyer admitted to violating his fiduciary duty to pensioners in both New York and New Mexico and taking part in schemes allegedly orchestrated by Mr. Morris. He also faces four years in jail, but is cooperating with the investigation.

“These guilty pleas vividly depict the depth and breadth of corruption involving the New York State pension fund,” Mr. Cuomo said. “In one case, we see New York’s state pension fund looted to reward a political boss with hundreds of thousands of dollars in improper payments.”

“In the other, we see a pension fund adviser — the outside ‘gatekeeper’ who is supposed to safeguard the integrity of the pension fund process — recommending deals based on pressure from pension officials and politically connected people.”

Raymond B. Harding is former vice chairman of New York State's Liberal Party. On April 16, 2009, he was charged with accepting more than $800,000 that prosecutors say was a reward for doing political favors for the former state comptroller Alan G. Hevesi. Mr. Harding pleaded not guilty to three felonies under the Martin Act, the state securities statute that gives the attorney general broad powers to pursue financial corruption.

Mr. Harding was also accused of helping to clear an Assembly seat in a Queens district so that Mr. Hevesi's son, Andrew, could run for it in 2005. Attorney General Andrew M. Cuomo said that Mr. Harding, once a close political ally of former Mayor Rudolph W. Giuliani and a power broker in state politics, provided "30 years' worth" of political favors to the senior Mr. Hevesi, including reliably endorsing his candidacies on the Liberal Party line.

Mr. Harding is the latest figure to be charged in the wide pension corruption investigation by Mr. Cuomo, who is scrutinizing the fees paid to associates of Mr. Hevesi by investment firms seeking business with the pension fund.

The complaint against Mr. Harding is rich with echoes of state political dramas of the past. Mr. Cuomo skirmished with Mr. Harding two decades ago for control of the Liberal Party on behalf of his father, Mario M. Cuomo, the governor at the time. But the younger Mr. Cuomo was backed by the Liberal Party and Mr. Harding in his failed bid for governor in 2002. Mr. Cuomo dropped out of the race and the party failed to attract the 50,000 votes necessary for it to remain on the ballot in future elections.

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