A key political consultant and a top aide to former Controller Alan Hevesi were slapped with corruption charges Thursday involving the state’s $5 billion pension fund.

Hank Morris and David Loglisci were arrested, handcuffed and fingerprinted before pleading not guilty in Manhattan state Supreme Court before Judge Lewis Bart Stone.

A 123-count indictment unsealed this morning – and first reported in the Daily News – charged the men with “enterprise corruption” for a three-year scheme that yielded $35 million in fraudulent fees.

The Securities and Exchange Commission is also bringing civil charges. Hevesi, who resigned in 2006 just before pleading guilty to an unrelated felony, was not charged.

The state attorney general’s office probe is continuing.

Bail was set for Morris at $1 million cash. The court imposed travel restrictions and required him to surrender his passport by Monday.

Bail for Loglisci, a former deputy controller for pensions, was set $350,000 bond. He also has travel restrictions and must surrender his passport.

Lawyers for the men accused prosecutors bowing to political pressure.

Morris’ lawyer William Schwartz, said “there was no fraud and no corruption. (The) pension fund made hundreds of millions, if not billions, of dollars on investments Hank Morris lawfully introduced to it, and the fund did not pay him one penny. Hank Morris is innocent, and we will defeat these charges at trial.”

Loglisci’s lawyer, Irving Seidman, said the pension fund more than doubled in value under Loglisci. “This matter has its origin not in truth, but in politics,” Seidman said.

Assistant Attorney General Ellen Biben defended the charges. “There was sufficient evidence and due process,” she said.

The News reported in September that Cuomo had convened a grand jury to look into whether those seeking pension business were being steered to use Morris as a middleman.
 
Morris pocketed at least $25 million in middleman fees from financial firms that won business with the pension fund during Hevesi’s tenure.

Successful companies paid a little-known Connecticut financial firm, Searle & Co. “placement fees,” 95% of which are said to have gone to Morris.

The largest chunk was from the Carlyle Group, one of the world’s biggest private equity firms in the world.
 
Carlyle, which invests $1.3 billion for the state pension, paid $12.3 million to Searle from 2003 through 2006.

Morris, a longtime Democratic consultant who also worked for Sen. Chuck Schumer, quietly registered as a financial broker just months after Hevesi took office in 2003.

Few people are said to have known of his involvement with Searle & Co., which is located above a Greenwich, Conn., Christian Science reading room.
 
Meanwhile, Morris created five firms – four of which shared his East Hampton home address. His name was not listed on the incorporation papers.

At least three of the companies received fees from firms doing business with the fund, documents show. Morris no longer works at Searle.

Hevesi has denied knowing Morris made money off the pension fund. Loglisci resigned suddenly in May 2007 amid the probe.

After his departure, key pension fund documents, including lists of who received and who paid out placement fees were found to be missing.

One firm said to be cooperating with Cuomo’s probe is Dallas-based Hunt Financial Ventures, whose part owner, Barret Wissman, is reportedly friends with Loglisci.

A Hunt Financial Ventures lawyer said the firm was told before it won $116.7 million in pension business to contact Morris, who instructed it to pay the referral fees to certain companies.

Records show the companies were Searle and Nosemote, one of the five firms Morris created.

(Source: NY Daily News)