BUSINESS

SEC accuses ex-Detroit mayor Kilpatrick, ex-treasurer of influence peddling

05/09/2012 01:15 EDT | Updated 07/09/2012 05:12 EDT
WASHINGTON - Former Detroit Mayor Kwame Kilpatrick is facing federal civil charges of taking part in an influence-peddling scheme involving the city's public-employee pension funds.

The Securities and Exchange Commission says Kilpatrick and ex-city treasurer Jeffrey Beasley received $125,000 in private jet travel and other perks from an investment firm. The SEC says that was in exchange for getting the city's pension fund to make an investment favouring the firm.

Kilpatrick and Beasley violated federal securities laws, the SEC alleged in a civil lawsuit filed Wednesday in federal court in Detroit.

Lawyers for Kilpatrick, Beasley and Mayfield didn't immediately return phone calls seeking comment

MayfieldGentry Realty Advisors, the investment firm, asked the pension funds' trustees to invest $117 million in a real estate investment trust controlled by the firm, the SEC said.

Kilpatrick and Beasley were among the trustees. The SEC says the two should have told the other trustees that they received perks from the investment firm.

The SEC also accused the investment firm and its CEO, Chauncey Mayfield, of taking part in the influence-peddling scheme in violation of federal securities laws.

Kilpatrick and his father are accused of taking kickbacks and bribes to steer city business to certain contractors. Their corruption trial is set for September in federal court in Detroit.