Hank Morris inhaled machine politics growing up in Westbury

By Carol Eisenberg

April 24, 2009 at 9:05am

Back in the early 1990s, when he was still considered a wunderkind, Hank Morris would get almost misty-eyed reminiscing about how he came to his passion for Democratic politics growing up in the heart of the Nassau County Republican machine.

He recalled how patronage ruled everything in his hometown of Westbury, Long Island – determining which kids got summer jobs and which companies were awarded highway contracts – and how angry that had made him.

Which was why helping a relatively unknown Charles E. Schumer defeat Nassau kingpin and NY Sen. Alfonse D’Amato in 1998 was a personal, as well as a political coup for him.

So how did Morris end up a decade later charged with 123 criminal counts - among them, bribery, grand larceny, money laundering and fraud - for allegedly pocketing millions of dollars in kickbacks from firms seeking investment by New York’s $122 billion pension fund?

Might he have felt entitled after virtually creating the political career of Alan G. Hevesi, a close friend whom he had helped to elect as state comptroller? Had years of running intense, hard-driving campaigns made him completely cynical? Was he simply exhausted?

Through his lawyer, Morris has denied doing anything illegal.

But with the ever-expanding probe now reaching into California and New Mexico, it appears that Morris approached his work as a so-called placement agent for private equity firms looking to do business with pension funds with the same sagacity and ruthlessness he once applied to campaigns.

Morris was never on the state payroll. To make the case that he broke the law, New York Attorney General Andrew Cuomo contends that at the same time he represented private firms, he was a de facto government official: For instance, he was able to get an ally – David Loglisci – appointed chief investment officer for the fund; he was able to arrange meetings for his private clients; and he was able to block private equity funds that did not hire him.

Because of this influence and power, the indictment says, he “became a de facto and functional fiduciary” of the pension fund.

In light of the allegations, it is interesting that Morris began his political career in 1970s Albany, where he worked for the late Stanley Steingut, then the Democratic leader of the Assembly, where he presumably learned firsthand how political leaders dole out rewards and punishments.

It was in Albany, too, where he first befriended Alan Hevesi, then a young Queens assemblyman.

In those early years, he also worked with the legendary New York City political consultant David Garth, who had run John V. Lindsay and Ed Koch’s campaigns. The two men had a falling-out in 1982 and reportedly never spoke again, but Morris’ approach owed a lot to that of his mentor.

Years later, during the 2001 New York mayoral campaign, when the two consultants were running competing campaigns (Garth helping Michael Bloomberg and Morris, Hevesi), New York Times reporter Adam Nagourney wrote how similar they were “notwithstanding their mutual disaffection.”

“Both insist on taking total control of the campaigns that enlist them. Mr. Morris’s role in the Hevesi campaign seems very much patterned after how Mr. Garth worked for John V. Lindsay, Edward I. Koch and Mr. Giuliani: Mr. Morris is the Hevesi campaign. He is its strategist, its press spokesman and the producer of its television advertisements.”

By all accounts, Morris’ relationship with Hevesi transcended that of adviser. He was the candidate’s strategist, friend, alter ego and mentor. Beginning in 1993 when he helped Hevesi unseat Elizabeth Holtzman to become city comptroller, he also, in a real sense, created Hevesi’s political career.

When Hevesi was elected state comptroller in 2003, he inherited sole authority over the pension fund under New York law. And he joined a broad move in the pension world at that time to give more business to nontraditional firms, such as hedge funds

In the years since that election – and until Hevesi resigned in 2006 after pleading guilty to a felony related to his use of state employees to drive his ailing wife - Morris created or was employed by half a dozen companies whose main purpose was to help hedge funds, private equity firms and others handle some of the investments of New York’s giant pension fund.

He created several limited liability companies with bizarre names like Nosemote and Pantigo Emerging, most of which were based in an East Hamptons house he bought for $4.1 million in 2001.

Morris also worked for Searle & Company, a Connecticut financial services firm that has arranged deals between the pension fund and investment companies like the Carlyle Group, one of the nation’s largest private equity firms, the Quadrangle Group then headed by Steve Rattner, now an Obama official, and a Texas hedge fund, HFV Asset Management.

Prosecutors say the pension deals netted him and Loglisci and their associates more than $30 million. Like Morris, Loglisci has denied the charges.

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