Detroit — A city pension fund voted Thursday to stop paying the legal fees of a lawyer and former trustee indicted a day earlier by a federal grand jury in a widening bribery scandal.
The Police and Fire Retirement System board of trustees voted unanimously to terminate payment of any legal fees for Ronald Zajac and Paul Stewart as a result of the indictment issued Wednesday.
They were accused of participating in a widening scandal involving kickbacks, former Mayor Kwame Kilpatrick, free trips and a Christmas basket stuffed with cash.
Zajac allegedly paid bribes and kickbacks to Kilpatrick, indicted former Detroit Treasurer Jeffrey Beasley and others, according to a grand jury indictment filed Wednesday in federal court. Zajac maintained a lucrative job as the lawyer for the city's pension funds and received a pay hike, earning more than $400,000 a year.
Zajac was indicted alongside former Detroit Police and Fire pension trustee Paul Stewart, and both were accused of participating in a bribery and kickback conspiracy involving more than $200 million in pension fund investments.
It's the board's policy to pay legal fees of officials who are subject to litigation as part of their official duties. That policy includes termination for current and past officials of the board when a criminal indictment has been issued.
The board, in a statement provided Thursday, said "the law provides all with the presumption of innocence and these indictments are a most unfortunate development."
The statement says the pension system has "cooperated fully" with the federal investigation that resulted in the indictments.
Stewart resigned in May 2011 and Zajac's independent contract was terminated by a board vote Nov. 1.
"The indictments involve a matter of ongoing civil litigation initiated by the pension funds and is obviously the subject of an ongoing federal investigation," the statement on behalf of the 16-member board says. "Accordingly, the Police and Fire Retirement System cannot comment any further due to the civil and criminal justice actions."
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