Jerry Goldfeder, a prominent election lawyer in Manhattan who has been working for Andrew Cuomo will be joining the law firm Stroock & Stroock & Lavan, according to a source.

Among Stroock’s many clients is the former state comptroller, Alan Hevesi, who is being investigated because of an alleged pay-to-play scheme that allegedly may have included his political consultant Hank Morris, and millions of dollars from the state pension fund.

When asked about the move, Goldfeder e-mailed to say that a statement will be made later in the morning.  read more »

Goldfeder closed his private practice and joined Cuomo’s office in March of last year. By December, he had ]]> http://www.observer.com/2008/politics/source-goldfeder-leaving-cuomos-office#comments Politics Alan Hevesi Andrew Cuomo Jerry Goldfeder Tue, 22 Jul 2008 07:48:28 -0400 Azi Paybarah 72161 at http://www.observer.com http://www.observer.com/2007/remembering-2007

Tonight, I'm going on New York 1 News' reporters roundtable for, among other things, a look back at the major news stories of 2007.

I discussed this with a few readers at a bar not long ago, and there was some debate as to which was a bigger story: the ongoing problem of Alan Hevesi's financial indiscretion or Eliot Spitzer's eventful first year in Albany.

But there are other possibilities: Michael Bloomberg leaving the Republican Party, inciting speculation about a presidential campaign; Tom Suozzi's affection; Spitzer's quest for humility; Andrew Cuomo's investigations; Al Sharpton's continued relevance; a New York Post reporter quitting her job to cover the war in Iraq.

Personally, I'm still awed by Mathieu Eugene winning three elections in a single year.

So, what were the biggest, most memorable, must-remember stories of 2007?

Your nominees?

Eliot Spitzer and state Comptroller Tom DiNapoli announced a plan today for reforming the management of the $154 billion state pension fund.

But they did not recommend putting the fund under the control of a board of trustees. (Currently, the state comptroller’s office manages it alone). After DiNapoli's predecesssor, Alan Hevesi, resigned over alleged misuse, it reawakened a long-standing debate about the safety of the fund in the hands of one official.

Andrew Cuomo, who is investigating Hevesi, seems to be reserving judgment. From a statement:

"We agree that the Comptroller's Office needs significant reforms and will comment on them at the end of our ongoing investigation concerning that Office."

The city’s top fiscal manager, Bill Thompson, has a largely flattering profile in the latest issue of BuyOut Magazine, a financial trade publication.

At one point, Thompson explains why he diversified the city’s pension fund portfolio to a much greater extent than previous comptroller Alan Hevesi (who later made news as the state comptroller, and continues to now that he left office).

Thompson told the magazine the city now has invested its pension funds mostly in stocks (about 70 percent) and the rest in bonds (about 30 percent).

“I wasn’t trying to undercut the previous comptroller,” Thompson tells the magazine. “I just thought it made more sense…to have a more balanced portfolio perspective, and we tried to do that.”

For the first time in a while, amid continuing bad news, the Hevesi family has a reason to celebrate.

Tomorrow, former state comptroller Alan Hevesi's son Andrew is getting married.

An Assemblyman in Queens, Alan is marrying a woman named Rachel Ross in Massachusetts.

Alan Hevesi resigned after he admitted to having state employees chauffeur his ailing wife without reimbursing the state. Then, Alan was implicated in a state pension fund scandal. Today, Andrew’s older brother, former state Senator Dan, hired a lawyer to defend him against allegations that he got kickbacks from the arrangement.

Andrew hasn’t returned calls for two weeks about his or other stories I’ve called him about. Another person familiar with the event said of the Hevesis, “I’m sure they’ll all be there.”  read more »

So, here’s a little background on that much-loved investigatory tool, the Martin Act, which Eliot Spitzer used in his anti-fraud cases and Andrew Cuomo will use in his probe of Alan Hevesi’s alleged pension scam.

The person who blew the dust off the long-forgotten provision of state law is Eric Dinallo, who worked with Spitzer in the Manhattan DA’s office and is now the superintendent of the New York State Insurance Department. In 1926, a court ruled the Act had broad powers and didn't require prosecutors to prove "a willful decision to commit misconduct."

According to Brooke Master’s biography of Spitzer:

“Unlike other applicants, Dinallo had actually read the entire text of New York’s general business law, known as the Martin Act for its long-forgotten Republican sponsor, Louis M. Martin. Though that 1921 statute was considered weak when it was enacted, Dinallo focused on later amendments that had strengthened the act and given the state attorney general unusually broad power to investigate and crack down on those who commit financial fraud. While the Mahattan DA’s Office had been limited to using the Martin Act’s criminal side, the law gave the attorney general a whole range of civil powers: he could subpoena documents, haul brokers and investment bankers in for public questioning, and, unlike his federal counterparts t the SEC and the Justice Department, he didn’t have to specify up front whether he was going to seek criminal charges or file an easier-to-rove civil case. An equally obscure 1926 court case, People v. Federated Radio Corp., had further strengthened the attorney general’s hand by holding that the Martin Act did not require proof that securities sellers made a willful decision to commit misconduct.”

So, if his current investigation turns out to be productive, Cuomo owes one to Dinallo.

A few minutes ago I ran into Eliot Spitzer's former gubernatorial challenger, John Faso.

Faso has had the unfortunate luck of running against two Democrats who became embroiled in ethical flaps after it would have been of any political use to him. First, he came within about 162,000 votes of of beating Alan Hevesi in 2002. By the 2006 re-election, Hevesi was engulfed in a scandal about using state employees to chauffeur his ailing wife. That year, Faso ran against Spitzer, who now has his own problems.

Faso, now a lobbyist with Manatt, Phelps and Phillips. was heading into City Hall but stopped here to chat with Mickey Carroll of Quinnipiac and City Hall gadfly Rafael Martinez Alequin.

Alequin, never one to miss an opportunity, asked Faso if he was going to run for office again, to which Faso jokingly replied, "I'm running for my life."

Now this is kind of fascinating.

Alan Hevesi's lawyer is seeking to explain those stories in the Post about millions of dollars Hevesi may have directed towards financial companies connected to his adviser, Hank Morris, with the following statement:

“Evasive responses from the Attorney General’s press spokesman with respect to these leaks will no longer suffice. Furthermore, the repeated leaking to the press of unproven allegations and details of the inquiry violates the New York State Lawyer’s Code of Professional Responsibility.”

I've tried to get an answer out of said press spokesman in Andrew Cuomo's office about the leak allegations, so far, without any luck.

Interesting that out of the two figures seemingly afflicted by prosecutorial leaks in Albany, Eliot Spitzer and Hevesi, only Hevesi is making an issue of it. (Spitzer, the erstwhile investigator, has stopped answering questions about the investigation.)

UPDATE: Jeffrey Lerner, Cuomo's Director of Communications, said, "We have no comment on this ongoing investigation or an obvious defense lawyer ploy to portray his client as a victim."

Here’s a significant story I missed in my morning round-up.

A financial company with ties to former comptroller Alan Hevesi’s closest adviser quietly amended its federal filings to show they got paid about $6 million more in fees than they had originally stated.

Sources said investigators are seeking to determine whether companies receiving investments from the state pension fund - which Hevesi alone controlled from 2003 until the end of last year - were directed by him to pay the "placement fees" to Searle in exchange for receiving the fund's cash.

A man who answered the phone at the company, Greenwhich-CT based Searle & Co. said “I don't know anything about it,” before hanging up. I called back and was told by another person a spokesman would call me back.

I also left a message for Hevesi’s consultant, Hank Morris, and am waiting to hear back.  read more »

Melinda Katz is going full steam ahead with her bid to be the next city comptroller in a race that, technically, doesn't happen until 2009.

“I’ve been in it for two or three months,” Katz, a Councilwoman from Queens, told me.

She's already picked up a major endorsement from RWDSU, the union representing sales and retail workers, to be announced formally tomorrow.

And aside from process, Katz is casting herself as the most experienced candidate for the job, reminding me that she is the chair of the Council’s Land Use Committee, a former state Assembly member, and former associate at Weil, Gotshal and Manges.

“I’ve become the known entity in this race,” she said, on her way to City Hall. That's where two of her three likely opponents for the race currently work: fellow Queens-based Council member David Weprin and Councilman Simcha Felder of Brooklyn.
Also considering the race the race is Assembly member James Brennan of Brooklyn.