Under agreements announced in court today, former Liberal Party chairman Ray Harding pleaded guilty to a felony as well as a misdemeanor, with the understanding that Cuomo's prosecutors could recommend the felony conviction be withdrawn if Harding cooperates with investigators. Saul Meyer, the head of Aldus Equity, entered into a similar plea agreement.

"It is a major development for us, and a very positive step in the case," Cuomo told reporters on a conference call. "His cooperation is very important to us, and his full cooperation is very important to us."

Cuomo called the arrangement "typical;" it automatically disbars Harding, but would permit him to re-gain his law license if the felony plea is withdrawn. (Cuomo said this is ultimately up to the bar association.)

The agreements tighten the noose on Hank Morris and David Loglisci, two top aides to former comptroller Alan Hevesi who are accused of running the pay-to-play scheme. Their indictments in March spawned the investigation.

"Hank Morris inserted me as a placement agent on certain investment transactions with the New York state retirement fund so that I could receive hundreds of thousands in fees to reward me for my political support of Alan Hevesi," Harding said in court, as reported by Bloomberg.

Cuomo did not speculate as to whether this would make a plea deal by Morris more likely. Hevesi has not been charged with anything; Cuomo has in the past said that the investigation is ongoing when asked if he would be charged.