Hank Morris and the Pension Scandal

The nationwide pension scandal, separate but occasionally over lapping with the muni-bond scandal has been moving forward at a modest pace. The outing of Obama's Auto Czar Steve Rattner as a possible influence peddler was just the tip of the iceberg. Today the Times looks at Democrat Big Wig Hank Morris.
From the Times:

Top executives at Bear Stearns were surprised when word came down from the chief, James E. Cayne, that it was time to hire a new company to produce the annual report to shareholders.Mr. Cayne was very specific: It should be the one owned by Hank Morris, a political confidant of Alan G. Hevesi, the up-and-coming New York City comptroller who held sway over municipal bond work sought by Bear Stearns. Lunch with Mr. Morris was arranged, and soon his graphic-design firm, Curran & Connors, replaced the longtime producer of Bear’s reports — only to be dropped a few years later, when Mr. Hevesi was no longer in office.

Though fleeting, Mr. Morris’s work about 10 years ago for Bear, the now-defunct Wall Street investment house, offers an early, inside glimpse of how he became a pre-eminent practitioner of the art of access capitalism. Over the years, his public profile was that of a leading New York campaign consultant — a guru sought after by marquee Democrats nationwide. But below the radar, Mr. Morris increasingly gravitated toward more lucrative activities, parlaying his political relationships to bolster a portfolio of private business interests.

By access capitalism I assume they mean influence peddling and pay for play. It works like this, the "consultant" or whatever title you want to give him talks to friends and partners in elected positions. These politicians in turn direct money and investments to companies that hired the consultant. The companies then lavish this middle man with money, business , and perks. The politician at the very least gets campaign donations and possibly bribes funneled to them. Usually through the Middle Man, as of now the details are murky, but Morris appears accused of the following:

Today, Mr. Morris, 55, stands accused of crossing the often-blurry line separating the legitimate use and illegal abuse of influence. A 123-count state indictment handed up in March asserts that he positioned himself to extract $15 million in kickbacks from fund managers seeking public pension business in New York after he helped get Mr. Hevesi elected state comptroller in 2002. Mr. Morris has pleaded not guilty.

And how connected was Hank Morris:

A graduate of Columbia University’s law school, with a shock of white hair and preference for preppy-looking sweaters even in summer, Mr. Morris had disarming mannerisms that cloaked a brass-knuckled way of doing business. He rose from a job as a legislative assistant in Albany in the 1970s to become an architect of Representative Charles E. Schumer’s upset victory over Senator Alphonse M. D’Amato in 1998. It was the defining moment in his career, but he also worked with some other big names in Democratic politics, former President Bill Clinton and Senator Dianne Feinstein of California among them.

A president and two of the most powerful senators in Congress, not to shabby. Now how did he do it?

As Mr. Hevesi was settling into the state comptroller’s office in 2003, Mr. Morris took another step that, prosecutors say, showed he was preparing to exploit the office’s sole authority over the state’s $122 billion public employee retirement fund. He obtained a securities broker’s license and became affiliated with Searle & Company, a small investment firm in Greenwich, Conn. How he came to work with Searle, which has a handful of employees and an office above a Christian Science reading room, is unclear. The company declined to comment.

As a placement agent, Mr. Morris embarked on three years of deal-making, in which he and a Hevesi aide, David Loglisci, extracted fees from private equity firms seeking to manage state pension investments in New York, according to the indictment brought by Mr. Cuomo and a related civil complaint by securities regulators. The two men are accused of requiring fund managers to pay a fee to Mr. Morris, who provided no legitimate services in return, if they wanted state business.

One of the keys , just like in the muni-bond scandal, is the use of fees. It makes sense, companies or governments can't just bribe, so they pay fees to people like Morris for putting the deals together.