Former Detroit Mayor’s Bermuda trip features in grand jury indictment
A visit to Bermuda by former Detroit Mayor Kwame Kilpatrick has become the subject of a grand jury indictment over alleged misuse of pension funds.US real estate firm MayfieldGentry Realty Advisors LLC has been accused of giving the mayor $174,000 in gifts and trips, including a 2007 visit to Bermuda, in order to maintain its position as an investment manager.Mr Kilpatrick was photographed golfing with then Premier Ewart Brown and comedian Steve Harvey while here.He also attended the Bermuda Music Festival, where he posed for pictures with various celebrity performers including members of the musical group, Earth Wind and Fire.MayfieldGentry Realty Advisors LLC is the largest real estate manager involved with Detroit’s Police and Fire Pension Fund, handling more than $300 million in assets.The allegations were detailed in Michigan newspaper, The Detroit News, last week.A section of the January indictment, which identified the firm as ‘Company G’, reads: “In September 2007, [then Detroit Treasurer] Jeffrey Beasley asked one of the principals of ‘Company G’ to charter a private plane so that Kwame Kilpatrick could fly to Bermuda, purportedly on business of the Kilpatrick Civic Fund.“At a cost of more than $34,000, ‘Company G’ then chartered a private plane over the weekend of October 4, 2007 so that Kwame Kilpatrick, his wife, Bernard Kilpatrick, and his companion could go on a trip to Bermuda.“No-one from Company G went on this trip, nor was Company G reimbursed by Kwame Kilpatrick or Jeffrey Beasley.”The indictment also lists chartered flights to Las Vegas, Nevada, and Tallahassee, Florida for Mr Beasley and Mr Kilpatrick.MayfieldGentry donated $50,000 to the Kilpatrick Civic Fund, which Mr Kilpatrick is accused of using for personal and campaign expenses.The indictment alleges that in return for the trips and other gifts, MayfieldGentry was able to maintain its position and earn substantial fees.The firm was also allegedly able to receive approval for a proposal to move real estate assets, the limits of which are controlled by Michigan state statutes, into another investment category by creating real estate trusts. This allegedly allowed Mayfield Gentry to increase real estate assets under its management and benefit through increased fees.Mr Beasley has been accused in the federal grand jury indictment of accepting cash, golf clubs, limousine rides and free flights for approving more than $200 million in pension funding investments. If convicted, he could face as much as 20 years in federal prison.The Detroit Police and Fire Pension Board fired the firm this week after its lawyer admitted that it had used $3.1 million to buy two Starbucks buildings in California without first informing the fund.The company has promised to repay the board $4 million, which included interest and launch a forensic audit into its dealings with the pension board.