Former Liberal Party Leader Pleads Guilty to Felony in Pension Corruption Scam

By Karen DeWitt

Albany, New York – State Attorney General Andrew Cuomo says the former head of New York's Liberal Party has pleaded guilty to receiving $800,000 in kick back fees as part of an illegal pay to play scheme under former State Comptroller Alan Hevesi.

Attorney General Cuomo says former Liberal Party Chair Ray Harding pled guilty to taking part in a pay to play kickback scheme devised by a top aid to former State Comptroller Alan Hevesi. As part of the scam, the aid, Hank Morris, installed Harding as a sham placement agent for some investments with the state pension fund, which is under the sole control of the state Comptroller. In exchange for the $800,000 in phony placement fees, the Liberal Party leader helped Hevesi's son gain a seat in the State Assembly.

Cuomo says in a "major development", Harding has agreed to cooperate with his office's on going prosecution of Morris for other alleged illegal payments in what the Attorney General says was part of a widespread, and long running scam, which reached their peak under Hevesi.

"This is a fatally flawed system," said Cuomo. "And it is a corrupted sytem."

In exchange for cooperating with the Attorney General's prosecutors, Harding may eventually see his sentence reduced or the felony conviction reversed.

A second actor in the scheme, Saul Meyer, also pled guilty and is also cooperating. Meyer is a founding partner in a Dallas, Texas based firm that advises public pension systems across the nation. Meyers admitted to steering public pension fund investments in New York and in New Mexico to firms that were giving kickbacks to Morris and others. Cuomo says companies like Meyer's are supposed to be the gate keepers in the public pension investing system, keeping everyone honest, but he says in this case, Meyers subverted that role.

"The gatekeeper was corrupted," said Cuomo.

Morris and another former Hevesi aid are charged in a 123 count indictment that includes charges of securities fraud, grand larceny, and bribery. Cuomo's investigators point out that Morris is presumed innocent until proven guilty in a court of law.

Former Comptroller Hevesi resigned from office in December of 2006, after admitting to using state funds to provide a chauffeur for his wife. His predecessor, current State Comptroller Tom DiNapoli, has instituted a number of reforms, including a total ban on the use of third party placement agencies for pension fund investments.

Attorney General Cuomo and former Liberal Party Chair Harding have a past political relationship that had it's ups and downs. Cuomo's father, former Governor Mario Cuomo, feuded with Harding for control of the Liberal Party in the 1980's. Harding later backed Andrew Cuomo when he made an unsuccessful bid for Governor in 2002.