NEW YORK (Reuters) - New York state's former top pension investment officer pleaded guilty to a felony for helping to steer hundreds of millions of investments to a political adviser and favored firms, Attorney General Andrew Cuomo said on Wednesday.
David Loglisci, who faces a sentence of 1-1/3 years, or 16 months, to four years in prison, acknowledged abdicating his authority to Henry "Hank" Morris, a top political adviser to the former state comptroller, Alan Hevesi, Cuomo said in a statement.
"With today's plea, a former top official overseeing the state's single largest asset admitted that decisions were driven by politics and greed -- not the best interests of the fund or its beneficiaries," Cuomo said.
The state's biggest asset -- its $129 billion pension fund -- was turned into a "piggybank" for Morris, "political allies and other friends," Cuomo said.
Morris, whose lawyer has said he is innocent, was charged in March 2009 with securities fraud, bribery, money laundering and other crimes in a 123-count indictment. He faced a long list of charges, including money laundering.
Hevesi has not been charged. His lawyer has also said he is innocent.
Loglisci is the sixth individual to plead guilty in Cuomo's probe, which the U.S. Securities and Exchange Commission has joined. The investigation has swept into other states, including California and New Mexico.
New York state and others have clamped down on the use of so-called placement agents, who often are politically connected individuals -- such as Morris -- who market investment firms that want to be hired by state pension funds.
But Cuomo said New York's $129 billion pension fund needed more safeguards:
"A culture of corruption permeated the fund and shows how vulnerable it can be to graft and exploitation without dramatic reform," he said.
Loglisci, the chief investment officer of the state pension fund, "ceded" his authority over alternative investment decisions to Morris, who then "corrupted the investment process," Cuomo said.
(Reporting by Joan Gralla and Jon Stempel; Editing by Jan Paschal)
