Spin Cycle

Hank Morris, 54, has a local pedigree. He's gained undoubtedly-unwanted notoriety for fees under investigation involving state pension business at a time when his close ally Alan Hevesi was state comptroller and sole trustee of that giant fund. One reflection of his past Democratic involvements in Nassau: Tom DiNapoli's failed run for county executive, which was the same year as Hevesi's failed run for mayor. If there proves to have been wrongdoing anywhere in the pension investment process -- and Hevesi's lawyer has strenuously denied it -- that figures to be more serious than Hevesi's misuse of state resources, to which the Forest Hills Democrat pleaded late last year. An updated profile on what we know of Morris and his role is here.

A hedge fund was directed to do business with longtime Alan Hevesi associate Hank Morris when it came to the matter of state pension investments, reports the Post's Ken Lovett. In a rare but little-noticed statement, the former state comptroller recently demanded an end to AG Andrew Cuomo's office allegedly leaking allegedly inaccurate reports of the ongoing investigation.

Here's an interesting historical fact about the state Ethics Commission, currently in the mix as an investigator of the Spitzergate mess:

When the commission investigated Alan Hevesi, the commissioner he had nominated -- Susan Shepard -- recused herself. And when the commission investigated Eliot Spitzer over a complaint from Tom Suozzi about Spitzer's service on the board of a family non-profit, the commissioner he had nominated -- Carl Loewenson -- recused himself.

So does that mean that this time around, the two commissioners Spitzer has chosen -- Loewenson, and new chairman John Feerick -- will recuse themselves? And if the probe rolls over in September to a new 13-person public integrity board, will the seven appointed by Spitzer recuse themselves?

Or will everyone signal the new, higher ethical standard Spitzer has brought to Albany by ruling on a case involving the guy who chose them?

John Riley

It turns out that Hillary Clinton isn't the only one who's latched onto the right enemy this week. She's making hay out of a letter from a former Cheney aide in Bush's Pentagon. NY AG Andrew Cuomo and Comptroller Tom DiNapoli are taking fire from none other than Alan Hevesi.

He may have a legitimate complaint -- we're kind of surprised it's taken this long for a complaint about leaks from Cuomo's office to surface -- but somewhere between the Driving Mrs. Hevesi scandal, the resignation in disgrace and the guilty plea, Hevesi lost the aura of Mr. Credible.

In the latest tempest over Alan Hevesi’s tenure as state comptroller, successor Thomas DiNapoli this afternoon released a statement that is unusual if only for its awkward effort to distance him from his predecessor — while also taking the “let-the-probe-take-its-course” tack.

Following on the heels of a Times story over the weekend that raised the possibility that Hevesi’s two sons and longtime adviser Hank Morris benefitted in still-undisclosed ways from state pension fund business, the Post reported that relevant documents were destroyed or disappeared early in DiNapoli’s tenure.

“It is apparent,” DiNapoli states, “that former Comptroller Hevesi and others on his staff engaged in unethical, irresponsible and possibly criminal activity.”

He also identifies “David Loglisci, who served as deputy comptroller for Pension Investment and Cash Management” as having a desk from which “certain records were missing.” Copies were compiled and provided to the Albany district attorney, DiNapoli said.

“It’s unfortunate that some individuals close to the investigation have chosen to compromise it by disclosing sensitive information,” DiNapoli said — although the Post based the thrust of its report on “a source close to DiNapoli’s office.”

The full statement is below.

If Gov. Eliot Spitzer has his way, Howard Weitzman may be the guy signing your state tax refunds from the state, among other things.

Should that happen, County Executive Tom Suozzi, newly named to a restructuring commission by Comptroller Tom DiNapoli, also gets to work on a replacement for the two-term Nassau comptroller.

In a way it becomes a repudiation by Spitzer of the lawmakers who rejected Weitzman and the other two candidates presented by that recruiting committee. The governor's side of it is that Weitzman impressed his team on the merits during the comptroller scramble in January.

Dan Janison

James Larocca, who spent a decade as a state commissioner and nearly another as a Long Island business leader, has put in his name for state comptroller.
Larocca, 63, now a professor at Long Island University’s Southampton graduate center, said, “I’m looking for the lightning I couldn’t find in 1998 to strike now” -- a reference to his unsuccessful run that year for governor.
A Sag Harbor resident, Larocca served as transportation and energy commissioner at different times in the Carey and Cuomo administrations. He also headed the Long Island Association for eight years and is currently the unpaid chairman of the Long Island Regional Planning Board.
Larocca, a lawyer, said he believes his credentials in different roles gives him unique qualifications for the post and feels that the merit-based process made it worth getting into. “I think I will receive very fair and respectful considerations. Whether I get all the way there is yet to be determined,“ he said.

Rick Brand

We ought to know by the end of the month who the lawmakers in Albany will pick as the next state comptroller — and one possibility sets up a curious situation.
Should Assemb. Thomas DiNapoli (D-Great Neck) be awarded the powerful post, Gov. Eliot Spitzer would have two special elections to call for northwestern Nassau County. State Sen. Michael Balboni (R-East Williston) is leaving his post to be Spitzer’s homeland security czar.
Simultaneous special elections for Balboni’s Senate seat and in DiNapoli’s Assembly district — where he won 74 percent of the vote in November — has a chance of boosting the Democratic candidate in the Senate district, whoever it turns out to be.
“That would certainly be interesting,” Nassau Democratic chairman Jay Jacobs said. “But I don't know if it would change too dramatically the get-out-the-vote dynamic.”

Reid J. Epstein

After reaching a plea deal late yesterday to resign and avoid jail time, Democratic state Comptroller Alan Hevesi will arrive this morning at the Albany County Judicial Center to plead guilty to a class E felony. Hevesi will also pose for a mug shot after he's booked and fingerprinted, an embarassing end after more than three decades in public service.

One political scientist noted to me late yesterday that while it was an abuse of power, Hevesi's assignment of state employees to help his sick wife, Carol, is a common misstep in political circles. The difference is Hevesi got caught. The spotlight was turned on him by an aggressive political challenger, Republican, J. Christopher Callaghan, and an equally aggressive Albany District Attorney, David Soares, who won office two years ago pledging to root out corruption.

Some Democrats are advising us to add the name Adolfo Carrion, the Bronx borough president, to the list of those likely to succeed Alan Hevesi as state comptroller.
As, as one activist noted: "It would do Bill Thompson a big favor, getting Adolfo out of the way for the '09 mayoral race." Thompson, a Democrat who must leave his current post by 2008 under the city term limits law, is known to be interested in succeeding Mayor Michael Bloomberg.
Stranger things have happened. Then again, more normal things have happened too...
(Note: Alert pickup on the earlier, CPA error. Thank you).

As the countdown continues to whether and when Alan Hevesi will quit as state comptroller, the question arises: are his efforts to do business as usual in the meantime doing anyone any good?
Hevesi has been negotiating a deal with the Albany district attorney that is expected to result in him stepping down, perhaps as early as tomorrow, over his use of state employees to chauffeur his ailing wife. While the scandal has unfolded, he has continued releasing audits criticizing cities for not using conservative financial assumptions when putting together multiyear financial plans and scolding the state for allowing its debt burden to grow too fast.
Some of these audits raise serious points, but how seriously can anyone take Hevesi when he criticizes other people’s financial missteps? It brings up that old saying about people who live in glass houses.

Mark Toor

The Democrats might already be thinking about Alan Hevesi's replacement but I will always remember him this way: smiling, jovial, ambling through the lobby of the Buffalo Hyatt amidst the crowd at the 2006 state Democratic convention. "No one knows I'm running for reelection," he joked, pleased that his low-on-the-radar status would help him coast easily to victory. He had that confident, elder statesman way about him.

Now Hevesi is avoiding reporters at his Forest Hills home and since he was persona non grata at the Democrats' election night celebration they've resorted to using an old photo from the May convention.

Errol A. Cockfield, Jr.

Here's a link to the settlement. Turns out Hevesi will pay $33,000 since he'd already repaid the state about $173,000 - the $83,000 he reiumbursed shortly after the scandal broke and another $90,000 the attorney general's office asked him to place in escrow.

Outgoing Gov. George Pataki is expected today to sign an executive order that would allow a special counsel to subpoena witnesses as part of an investigation of state Comptroller Alan Hevesi.

This comes after Gov.-elect Eliot Spitzer signaled through a targeted leak last week that he is leaning toward asking the state Senate to remove Hevesi once he takes office.

Errol A. Cockfield Jr.

A supporter finally showed up for Comptroller Alan Hevesi at the Madison Towers. He said he was a volunteer for Eliot Spitzer but he couldn't get into the Dems' big election night bash at the Sheraton, so he wandered over to Hevesi's in the Leonardo Room.
“It’s better to go here than go home,” said Eliezer Alter, 26, of Brooklyn.

Karla Schuster

Update: The actual name of this hotel is (no joke) the Jolly Madison Towers Hotel. It is printed on the matchbooks. The room is starting to fill up with "mostly people who work for the comptroller's office," Karla says.

State Comptroller Alan Hevesi, he of the Driving Miss Carol scandal, has his election night headquarters across Manhattan from other Democrats, at the Madison Towers Hotel at 38th and Madison.
Right now, our Karla Schuster is there, along with about 25 other members of the media and the comptroller's staff, among them spokesman Dave Neustadt, aka 'Neustadt.' They are hanging out in the sparsely-decorated Leonardo Room.
"There’s no one here," Karla reports. "It's a small room, no balloons, no nothing. There's just a podium that says 'Hevesi' and a bunch of signs taped up. No supporters."
Nor is Alan Hevesi in the house. But we are told Hevesi will speak, win or lose tonight, and more than likely, will apologize again, for some kind of -- in his own words -- "incredibly moronic" behavior or another.
Update: Here is a quote from Neustadt, who tells us that Hevesi is apparently enroute from Forest Hills.
"The important thing today is what the voters did, not how many people show up at this party. We're hopeful the voters are looking at the whole man, his whole records, and not just one thing. If they do that, we are very optimistic."

A poll out today from Quinnipiac University shows state Comptroller Alan Hevesi leading his Republican challenger, J. Christopher Callaghan, by 50 to 38 percent. That's in line with a Newsday/NY1 poll released Thursday that had Hevesi up by 10 points, but it challenges a Siena Research Institute poll released Friday that had Hevesi up by four points.

The Quinnipiac poll shows more swing voters moving over to Callaghan. In mid-October Hevesi led Callaghan among independent voters by a 51 to 24 percent margin, but that lead has slipped to 11 points.

Errol A. Cockfield Jr.

Gov. George Pataki told reporters yesterday that he may not be able to make a decision on whether to recommend a trial for state Comptroller Alan Hevesi's removal before Pataki leaves office at the end of the year.

"It may well be something that doesn't happen over the course of the balance of this year," Pataki said.

David Kelley, the man Pataki appointed to review the Hevesi case, said over the weekend that there is a legal basis to recommend Hevesi's removal but he said a number of legal questions would make a trial premature.

Errol A. Cockfield Jr.

State Senate Majority Leader Joseph Bruno has done a lot campaigning since first working for the re-election of Gov. Nelson A. Rockefeller in 1966. Ditto for Bruno’s top party-caucus deputy, Sen. Dean Skelos (R-Rockville Center) who’s been in state government for nearly 25 years.
Their skill was on display last week as they gently coached fellow Republican J. Christopher Callaghan as he sought to capitalize on the chauffeur scandal engulfing incumbent state Comptroller Alan Hevesi, a Democrat.
Suddenly Callaghan found himself with a substantial campaign treasury, journalists wanting interviews and rallies to attend but very limited stump experience. Not to worry, Bruno and Skelos were there to lean on.
“Chauffeur, don’t forget the chauffeur,” Bruno whispered as Callaghan answered questions at a news conference in Hauppauge. And later, “have you shaken hands with everyone here?”
— James T. Madore

David Kelley said there is a "valid legal basis" for a trial to remove state Comptroller Alan Hevesi from office, but in a report released today he said any effort to unseat Hevesi would be premature because of a litany of legal issues.

Pataki, who is campaigning with fellow Republicans in Delaware and New Hampshire today, is still considering whether to ask the GOP-held state Senate to conduct a trial. The governor's spokesman, David Catalfamo, did not rule out the possibility before Election Day.

UPDATE: We made some changes to this post after a reader noted accurately that it gave the impression Kelley had recommended Hevesi's removal. He says there is a legal basis for a trial, but does not recommend proceeding on that front.

Errol A. Cockfield Jr.

Attorney General Eliot Spitzer has asked state Comptroller Alan Hevesi to pay another $90,000 to the state, atop the $83,000 he paid in late September as a result of the chauffeur scandal.

Hevesi delivered a check for that amount today after a preliminary review by Spitzer's office detailed how often a staffer, Nicholas Acquafredda, assigned to drive Hevesi's wife, was away from his workstation.

Spitzer's call for a larger payment reinforces a claim by Hevesi's Republican opponent, J. Christopher Callaghan, that the comptroller vastly underestimated what he owed taxpayers.

Errol A. Cockfield Jr.

"We has no comptroller like Mr. Hevesi in my country. He make many wonderful audit reports on my sister, and invest great New York retirement money in Glorious Nation of Khazakshtan.”
- Borat

Disclaimer: This post is a bit of political satire inspired by the proliferation of Alan Hevesi endorsement announcements this afternoon.

Nassau County Executive Thomas Suozzi may not have time for pretrial testimony but he does have a few moments to craft a few words endorsing embattled state Comptroller Alan Hevesi.

So Eliot Spitzer withdrew his endorsement of Hevesi, but Suozzi, who portrayed himself as the loudest voice of reform in the state, backs a guy who the Ethics Commission says violated state law. I wonder what Tommy would have said if he won the primary against Spitzer.

In a statement, Suozzi said, "Alan Hevesi has been a great Comptroller for suburban homeowners. His report on property taxes sounded the alarm on the huge burden placed on State taxpayers and his work on Medicaid reimbursements helped establish the caps that prevented our local taxes from going even higher. His opponent, Chris Callaghan lacks the experience necessary to deal with the issues facing Long Island. That’s why I am voting for Alan Hevesi."

Errol A. Cockfield Jr.

In another sign of how the state GOP has shifted its focus to the battle for comptroller, Arizona Senator and presidential contender John McCain just announced he is endorsing Chris Callaghan.

And John, how do you feel about John Faso, Jeanine Pirro and John Spencer? Are those crickets I hear chirping in the distance?

In a statement, Senator McCain said, "Like all Americans, the people of New York want and deserve integrity in their government, and that's why I'm endorsing Chris Callaghan for State Comptroller. Chris Callaghan has the integrity, the honesty and the decades of experience to restore faith in the Comptroller's Office, and I know that he will make an outstanding fiscal watchdog for the people of New York State."

Errol A. Cockfield Jr.

State Comptroller Alan Hevesi's Republican opponent, J. Christopher Callaghan, launched his "Tax-Less Express" bus tour in front of Hevesi's Albany office this morning.

Callaghan, the former treasurer of Saratoga County, introduced his wife, Liz. "Here is the poor woman who will not have a chauffeur," he said.

Callaghan also had choice words for city Comptroller Bill Thompson who has questioned Callaghan's qualifications and yesterday said, "Comptroller Hevesi's record as both New York City Comptroller and State Comptroller is something to be proud of."

"I want to know, Bill, what do you have to do to be a bad comptroller?" Callaghan said.

The Village Voice weighs in with a story in the wake of the Hevesi scandal describing how Gov. George Pataki "never skimped on providing help and protection for his own family." The piece also critiques the role and connections of the Pataki-allied ethics chairman who was behind the report on Hevesi.
Judge the merits of the story for yourself.

The piling on Alan Hevesi continued today, with Suffolk Republicans rallying with challenger J. Christopher Callaghan in front of the state office building in Hauppauge. Only GOP committee chairman Harry Withers spoke at the event but a news release from the Callaghan campaign includes some strong words from local officials:

* Assemblyman James Conte (R-Huntington Station): “It’s an outrage that the state’s top fiscal officer is involved in such a scandal. Government must be held accountable and to let this obvious abuse of taxpayer dollars to go without recourse is unimaginable. Mr. Hevesi should resign immediately.”

* Suffolk Comptroller Joseph Sawicki Jr. (who has been crossed endorsed Suffolk Democrats): “Just because you return the money you stole from the taxpayers of New York doesn’t mean that the crime didn’t happen. Hevesi must be held accountable and he should resign or face impeachment.”

* Suffolk County Clerk Judy Pascale: “It is clearly time for change in the comptroller’s race. Hevesi has a good record but no record would be good enough to overshadow the disturbing findings of the New York State Ethics Commission. Hevesi should step down immediately and accept responsibility for his actions."

James T. Madore

Over the weekend we published an exclusive interview with Albany District Attorney David Soares as he considers whether to indict state Comptroller Alan Hevesi. Soares is prohibited from discussing the details of the case, but he had choice words for Hevesi's claim that a criminal investigation is politically driiven.

He also had this to say about politicians who steal taxpayers' money. "The idea that we in public office are living a life of luxury or using the public's money to obtain any personal benefit, it's distasteful, offensive and criminal," he said.

Errol A. Cockfield Jr.

Gov. Pataki appointed David Kelley to investigate Hevesi yesterday, and when you look at the morning papers you see how everyone pulled out their respected-former-federal-prosecutor dot bios. A Democrat! A former cop and firefighter! Prosecuted Ramzi Yousef! And Martha Stewart! And Bernie Ebbers!

But somehow, one career highlight gets less-mentioned. John Walker Lindh, the California Muslim who was available when Bush, Ashcroft and company needed a scapegoat after Sept. 11. His crime was .... carrying a rifle for the Taliban to fight the Northern Alliance when, unbeknownst to him, the U.S. decided to declare war on the Taliban? Kelley was the co-lead prosecutor who helped put Lindh in prison for 20 years.

No doubt he's especially proud of that one. A real high point in the history of the American justice system.

Democrat Andrew Cuomo, the frontrunner in the state attorney general’s race, this afternoon called the ethics commission report on state comptroller Alan Hevesi's inappropriate use of a state worker to drive his wife around “very, very troubling." Cuomo also said of Hevesi, "This is a man who I've known many years and I'm surprised and shocked at his behavior."
Asked how the scandal would affect Hevesi's job performance, Cuomo said, 'I think it severely compromises his position."

James T. Madore