Detroit pension fund fires lawyer linked to scandal
Detroit — The city’s Police and Fire pension fund fired a lawyer Thursday linked to a bribery scandal that cost retirees almost $100 million after members said they had lost confidence in him.
The 9-7 vote to fire general counsel Joseph Turner and his law firm, Clark Hill, comes three weeks after The News reported that some members of the pension fund had lost confidence in Turner. His continued involvement in the pension board raised questions about the city’s ability to move past a history of corruption, mismanagement and bad investments that helped push Detroit into bankruptcy, critics said.
“I respect their decision,” Turner said after the meeting. “I don’t agree with it, but I respect it.”
Clark Hill will continue to represent the pension fund in matters related to the city’s bankruptcy case and some ongoing lawsuits, pension fund spokesman Bruce Babiarz said.
The board will seek a replacement in coming months.
Detroit Police & Fire Retirement System Chairman Mark Diaz was among those who voted in favor of the motions. Diaz has been vocal about his concerns over continuing to employ the firm as general counsel and argued it’s in the system’s best interest to “move in a new direction.”
“The board needs to be progressive,” Diaz said. “We need to constantly seek the best representation in every way for our retirement system. That is our mission today and our mission going forward.”
“I want the best representative for our retirement system. Period,” he added.
Other members who voted to fire the firm include Vice Chairman Jeffrey Pegg and trustees Matt Gnatek, Michael Simon, Sean Neary, George Orzech, John Serda, Melvin “Butch” Hollowell and John Naglick.
Voting against the measure were council President Brenda Jones and trustees Louis Sinagra, Portia Roberson, Michael Jamison, Pamela Scales, Angela James and Edsel Jenkins.
The board gave Clark Hill a 30-day contract termination notice, decided it will request bids for general counsel services and created a 90- to 120-day period for the process.
The fund’s Legal Review Committee will seek and accept potential names of law firms to serve the board in the interim.
Turner testified during the two-month trial that ended with guilty verdicts Dec. 8 against former Detroit Treasurer Jeffrey Beasley, ex-pension trustee Paul Stewart and Turner’s predecessor, Ronald Zajac, the former pension system’s general counsel.
The corruption and pay-to-play scandal cost Detroit’s retirement system more than $97 million.
Turner, whose firm led the retirement system’s fight against pension cuts during Detroit’s bankruptcy case, contributed cash during birthday parties for pension board members before receiving a pay raise, according to a federal indictment.
He was never charged with a crime.
Last month, Turner called the birthday parties “yesterday’s news” and said he fully disclosed his involvement to the board in 2012.
Turner has previously said he did not request or receive any benefit from the birthday parties.
Turner and Clark Hill were hired in June 2013 following Zajac’s indictment in the pension scandal.
Turner’s hiring was controversial and approved by a 9-6 vote.
According to the Beasley indictment, Turner — identified as “Attorney B” — contributed cash during birthday parties held in 2007 for Beasley and trustees Stewart and Marty Bandemer before receiving a pay raise.
Zajac solicited large cash gifts for Beasley and the trustees during “birthday” parties attended by people with financial ties to the pension funds.
During the corruption trial, Turner testified he gave Zajac two envelopes at the party for Stewart and Bandemer, according to a trial transcript obtained by The News. Each envelope contained $500 cash.
Later, he joined Zajac in a back room during the party.
“There were two piles of cash and Mr. Zajac indicated those were the gifts, and each pile, he indicated, had $5,000 in each stack,” Turner testified, according to the transcript.
Turner also testified that he contributed $500 cash at Beasley’s birthday party.
During the corruption trial in December, Beasley testified that Zajac handed him a birthday card at the January 2007 party filled with $100 bills.
“Tell us how much was inside,” said Beasley’s lawyer, Walter Piszczatowski.
“Nine thousand dollars,” Beasley testified. “That’s what I used to take my family on vacation.”
Months after the party, Beasley made a motion during a pension fund meeting to “substantially increase the hourly rate of “Attorney B,” according to the indictment.
The raise bumped Turner’s hourly rate as the pension fund’s special legal counsel from $225 to $300 an hour, according to meeting minutes.