Detroit Free Press
written by Tresa Baldas
Tuesday February 28, 2012
Jeff Beasley, a former city official and fraternity brother of ex-Mayor Kwame Kilpatrick who was indicted today in a pension fund scheme, is ready for a fight, according to his lawyer.
“Jeffrey has always maintained his innocence, and there will be a number of witnesses who line up with him at trial to prove his innocence,” Beasley’s lawyer, Wally Piszczatowski told the Free Press today, noting he had not yet seen the indictment.
“I think it’s very interesting that only one person got indicted when there are 10 and 11 members of the respective (pension) boards on which he sat,” said Piszczatowski, convinced that others cut a deal in the case to save themselves. “I haven’t seen the witness list, but but I can bet that everybody who was testifying against Jeffrey before the grand jury is looking for, or has gotten, some kind of deal. Their testimony is bought and paid for.”
Beasley, Detroit’s former treasurer who was appointed by Kilpatrick, was indicted on charges he and others took bribes and kickbacks in a scheme that bilked $84 million from two Detroit pension funds. He took the bribes in exchange for approving more than $200 million in investments by the two City of Detroit pensions, the indictment said.
The bribes, the indictment said, came in all forms: cash, travel, meals, golf clubs, drinks, gambling money, hotel stays, entertainment, Las Vegas concert tickets, limos, and private plane flights.
"This is another example of a once-trusted public official abusing their power for personal gain,” said FBI Special Agent in Charge Andrew Arena, who warned public corruption remains a high priority for the federal agency. “The FBI remains dedicated to rooting out this type of corruption and reminding public officials they serve the citizens, not themselves."
According to the indictment, the bribes, which were paid to Beasley and his co-conspirators, came from individuals who had business before the General Retirement System and the Police and Fire Retirement System of the City of Detroit.
As city treasurer, Beasley was a member of the boards of trustees of the two pension systems, and he had a responsibility to make decisions on investments pending before the boards in the best interests of the retirees and beneficiaries, authorities said.
Beasley’s bribery scheme cost the two Detroit pensions more than $84 million in losses, the indictment said.
A federal grand jury issued the six-count indictment on Jan. 18, although it wasn’t unsealed until today.
According to the indictment, between January 2006 and September 2008, when Beasley served on the boards of trustees of the two pension funds, he conspired with others to defraud current and retired City of Detroit employees who contributed to the two pension funds. The indictment alleges Beasley deprived the employees of their right to honest services, including their right to Beasley's service as a pension fund trustee, free of bribery and corruption.
Longtime police and fire trustee George Orzech said Beasley’s tenure marked a time when the board had “gone bad for a small period of time.”
“There’s no way to stop a trustee if they’re going bad,” Orzech said. He said trustees have a “trusted spot” and city workers, retirees and the disabled depend on that trust. “That’s a trust placed on you to do the best you can with what you’ve got,” he said.
The indictment alleges Beasley personally pocketed more than $100,000 in cash from people having business before the two pension funds. Another part of the scheme included demands by Beasley and others that individuals having business before the pension funds contribute tens of thousands of dollars to the Kilpatrick Civic Fund to receive approval for their investment requests, the indictment said.
Beasley also is charged with five counts of extortion or attempted extortion, accused of extorting more than $10,000 in cash from persons doing business before the two pension funds at a "birthday party" in his honor.
Specifically, the indictment said, Beasley demanded $250,000 from the owner of an investment company in exchange for Beasley's support of $44 million in investment funds from the two pension funds. Beasley also demanded and received $20,000 from Marc Andre Cunningham, a former Kilpatrick aide who acted as a consultant for a communications company that received $30 million in investment funds from the two pension funds, the indictment said.
Beasley and his co-conspirators demanded and received trips, private plane flights, and lavish entertainment from an investment manager of the Police and Fire Retirement System who managed more than $150 million in properties owned by the system, the indictment said.
If convicted, Beasley faces up to 20 years in prison and a maximum $250,000 fine on each of the six extortion counts.
The indictment also seeks forfeiture of more than $225,000 in unlawful payments received by Beasley and his co-conspirators.
"Employees of the City of Detroit are entitled to honest services from the trustees of their pension funds. We will prosecute public officials who abuse their positions of trust to personally enrich themselves at the expense of the people they were intended to serve," said U.S. Attorney Barbara McQuade.
In October, the Free Press published excerpts from a five-hour deposition from a civil suit involving the pension funds, in which Beasley took the Fifth Amendment more than 450 times. He refused to answer questions about whether he took bribes or kickbacks, including Super Bowl tickets, a cruise and free condo stays, in exchange for his support of any pension deals. He wouldn’t even say how he met Kilpatrick, much less answer questions about whether he encouraged an Alabama businessman to donate $100,000 to Kilpatrick’s defense fund in exchange for a political favor.
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