Detroit corruption case reboots in federal court

Robert Snell and Oralandar Brand-Williams
The Detroit News

Detroit — The lawyer for former Detroit Treasurer Jeffrey Beasley told jurors during his opening statements Thursday in the corruption trial against Beasley and two others that his client did not take bribes or kickbacks in exchange for votes to win deals from the city’s two pension boards.

Beasley, the fraternity brother of former Detroit Mayor Kwame Kilpatrick, is on trial before U.S. District Judge Nancy Edmunds along with former pension board trustee Paul Stewart and former pension board attorney Ronald Zajac.

The three are accused by federal prosecutors of enriching themselves through payoffs from businessmen who sought and sometimes won millions in investments from the city’s two pension boards that oversee retirement plans for the city’s police, fire and other retirees.

Beasley’s attorney, Walter Piszczatowski, said Thursday during his opening statements that his client did not participate in a scheme to sell his vote on the pension boards for gain.

“The reality is he never sold his vote,” Piszczatowski said. “The government has not shown that Mr. Beasley sold his vote for money, drinks or anything else.”

Piszczatowski said while his client did accept a free trip to the Caribbean island of Turks & Caicos, he did not take it in exchange for a favorable vote on the pension board to fund an investment for a particular businessman.

“Does Mr. Beasley go on the trip? He sure does. Does he change his vote? No,” Piszczatowski said. “Does (Detroit businessman) Chauncey Mayfield buy a vote? No.”

But Assistant U.S. Attorney Robert Cares, who is prosecuting the case, told jurors Beasley, Stewart and Zajac broke the public trust in how business was done at the pension board by taking bribes and kickbacks.

“There was a preference shown to these bribers,” said Cares about the businessmen who supplied Beasley, Stewart and Zajac with some form of payment through cash, gifts or expensive trips for voting on a lucrative investment deal that was backed by pension funds.

“There was a fiduciary duty to guard and protect those pension funds,” Cares said.

Testimony in the case continues Friday. The trial resumed Thursday after a two-day break prompted by a surprise guilty plea from Georgia businessman Roy Dixon, who was accused of bribing Kilpatrick and several pension fund officials.

Dixon admitted bribing Beasley with $2,000 and a free family trip to the Turks & Caicos in 2007. In return, Dixon said he wanted favorable treatment from Beasley.

Dixon has agreed to testify during the trial and could become a star witness against his former co-defendants. If convicted, the men face 20 years in federal prison.

Dixon is the third person to plead guilty to a federal crime in the corruption case and the latest during a years-long corruption probe that has netted 35 convictions, including Kilpatrick.

The pension fund corruption trial is the first major public corruption case since Kilpatrick was convicted and sentenced last year to 28 years in federal prison.

Kilpatrick is an unindicted co-conspirator in the complex criminal case that explains what happened to money from a $1.4 billion Wall Street deal blamed for helping plunge Detroit into bankruptcy. Prosecutors allege the money ended up in the pockets of businessmen who bribed pension officials, including Beasley, with cash, exotic trips and a Christmas basket stuffed with cash.

Beasley is accused of pocketing bribes and kickbacks in return for approving more than $200 million in pension fund investments. The city’s two pension funds lost more than $84 million on the deals, prosecutors allege.


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