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Corruption Chronicles

Public Pension Fraud Investigated In N.Y.

New Yorkâ??s attorney general is using an obscure law used to fight Wall Street corruption to investigate abuse in the stateâ??s massive pension fund under an official who illegally spent hundreds of thousands of taxpayer dollars.

As New Yorkâ??s chief fiscal watchdog, Comptroller Alan Hevesi illegally used public employees on state time to chauffer his wife for more than three years. The Queens Democrat eventually pleaded guilty to the fraud and went on to become the first statewide official charged by the New York Ethics Commission.

Now Attorney General Andrew Cuomo is investigating the possibility that Hevesi committed other more serious crimes against taxpayers. The attorney general believes Hevesi may have abused the stateâ??s public employee pension fund for personal financial gain since the state comptroller is the sole trustee for the $154 billion fund and therefore decides where the money is invested.

Cuomo is using the Martin Act, a 1921 state law created to combat Wall Street fraud to thoroughly investigate the pension corruption. Under the law the attorney general is empowered to subpoena documents from those doing business with the state, keep an investigation secret and pick whether to file civil or criminal charges.

State and county investigators have for months been looking into allegations that donors to Hevesiâ??s political campaigns received investment business from the public pension fund and that companies checked by the comptrollerâ??s office to ensure reliability were pressured to give Hevesi contributions.

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