‘Everyone does it’ not a defense for corruption, NY AG argues in pension probe court papers

NY AG: ‘Everyone does it’ not a fraud defense

NEW YORK — Just because “everybody does it” in Albany doesn’t mean corruption is legal, New York’s attorney general said in court papers Monday, arguing the case against a former top political adviser charged in a corruption scandal at the state’s pension fund must go forward.

Hank Morris, a once-adviser to former state comptroller Alan Hevesi, has been accused of taking kickbacks and other payments to steer billions of dollars in pension fund investments to favored companies in a “pay-to-play” scheme.

Morris is facing a total of 123 charges, including enterprise corruption, securities fraud, grand larceny, bribery and money laundering, according to an indictment. Federal securities regulators also filed a civil fraud suit. He has pleaded not guilty. David Loglisci, the former chief investment officer in the comptroller’s office, was also charged in the case and pleaded guilty in March to a securities fraud charge.

Morris had argued in court papers filed earlier this year the case against him should be dismissed because he was involved in the “long-standing” practice of using political connections to obtain access to public assets, and while it was possibly unethical, it wasn’t illegal.

Court papers filed in State Supreme Court in Manhattan tried to rebut that argument.

“‘Business as usual’ is not a defense to fraud, and ‘everybody does it’ is not a defense to public corruption,” the Attorney General’s office wrote. “It is true that fraud and corruption in politics have existed from the beginning of time. That is not, however, a reason to ignore them. To the contrary, we must zealously root them out.”

A call to Morris’ attorney was not returned.

The investigation — which tangentially involves a low-budget movie and a 1960s actress — 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.

The attorney general’s office also argued that Morris wasn’t a mere middleman using his political clout, but that he secretly worked from the inside as well, concealing his involvement from most people in the comptroller’s office. He set up sham corporations and didn’t appear at meetings with potential investors in an effort to hide the activity.