ALBANY – Even with a new comptroller in office, the top political consultant to disgraced ex-Comptroller Alan Hevesi took in a hefty fee from a fund doing up to $100 million in business with the state pension system, The Post has learned.
New disclosure documents released yesterday by the Comptroller’s Office showed that Searle & Co., a small financial firm tied to Democratic consultant Hank Morris, received a placement fee from the Sector Performance Fund in a deal approved by Comptroller Thomas DiNapoli in April.
A source told The Post that Morris represented Searle in the deal, which yielded a placement fee of between 1.5 percent and 2 percent, or as much as $1 million.
Sources have told The Post in the past that under such deals, Morris kept 95 percent of the fee, with Searle & Co. collecting the rest. The fee from the fund, which is owned by HM Capital, is said to be part of the $25 million in payments that investigators from the state Attorney General’s Office believe Morris pocketed since Hevesi took office in 2003.
Searle’s connection to Morris was not widely known at the time DiNapoli approved the deal with the fund, DiNapoli spokesman Dennis Tompkins said.
“It was a deal that was in the process for a number of months before Comptroller DiNapoli took office and it was properly vetted under the existing regulations,” Tompkins said.
The Post has since reported in a series of stories that Morris received millions of dollars in placement fees from companies that secured business with the pension fund under Hevesi’s watch from 2003 through 2006.
Some of the fees were paid to Searle, where Morris was employed as a broker. Others went to five LLCs tied to Morris, four of which shared his home address in East Hampton.
An HM Capital spokesman would say only that the firm “is currently engaged in fund-raising and cannot comment on any aspect of that process.”
Peter Anderson, a lawyer for Searle, had no immediate comment. Neither Morris nor his lawyer could be reached for comment.
Searle’s links to the fund surfaced yesterday in a set of monthly transaction reports the Comptroller’s Office is now making available.
As part of a series of reforms announced yesterday by DiNapoli and Gov. Spitzer, the Comptroller’s Office will release, for the first time, on a monthly basis, transaction reports detailing the pension fund’s individual investments and whether placement fees were part of the deal.
In addition, Spitzer announced the state Insurance Department will have broader audit oversight of the pension fund and Comptroller’s Office.
The proposed regulation, which needs no legislative action:
* Establishes a conflict-of-interest disclosure requirement and reporting standards for the comptroller and all outside consultants and investment managers.
* Establishes an independent audit committee made up of members not affiliated with the comptroller or the pension fund.
* Calls for the development of transparent procurement rules.