Hip Hop Mayor in Hot Water


Former Detroit Mayor Kwame Kilpatrick at his sentencing hearing where he received 120 days in jail in Detroit, Michigan October 28, 2008. REUTERS/Rebecca Cook
Corruption charges against former Detroit Mayor Kwame Kilpatrick continue to mount.

This time, it is the Securities and Exchange Commission that has the former “hip hop mayor” as he once was called, in its sights. The S.E.C. filed a civil complaint this week against Kilpatrick and a former associate, the city’s ex-treasurer, saying that the two accepted lavish gifts from an investment advisor seeking the city’s pension fund business.

The  S.E.C. has charged the duo with accepting $125,000 in gifts.  The booty included a trip to Charlotte, N.C. with a $3,000 hotel tab, a $60,000 trip to Las Vegas where the two and others stayed at a luxury hotel, received meals, massages and concert tickets.  Then, there was a $34,000 private jet trip to Bermuda and a $24,000 jet trip to Tallahassee, Florida, where Kilpatrick had a vacation home.

The charges follow a Detroit Free Press investigation into mismanagement of the city’s public pension fund. The former mayor was also indicted in 2010 on federal charges that he, his father and three others, ran a criminal enterprise in the mayor’s office.  If found guilty of the 38-count indictment, Kilpatrick could face 30 years in prison. In state court, Kilpatrick is under order to pay $500 a month in restitution over a text-message scandal that drove him from office. Kilpatrick has already been jailed twice amid numerous scandals.

John Sikora, assistant director of the S.E.C.’s Chicago office said: “The mayor and the treasurer broke trust with the public workers who benefit from the pension funds.”

As if Detroit didn’t have enough troubles already.

Sweep to Government accuses Kwame Kilpatrick of accepting lavish gifts from pension investment advisor

How about giving the penalties collected from companies caught bribing public officials to the victims of that bribery?

That’s an idea that is being floated by Andy Spalding, an expert in bribery law and a contributor to the F.C.P.A Blog. Spalding proposes that a portion of the settlements that regulators, like the U.S. Department of Justice collect from corporations accused of bribing foreign officials should go to directly benefit citizens of the country where the bribery took place.

This proposal is not without precedent.  In 2010, the U.S. government used an $84 million settlement with western oil companies to finance a foundation in Kazakhstan, where the bribery occurred. . The BOTA Foundation has provided scholarships to the needy, and funded health, education and social welfare projects. Its goal is to alleviate poverty in that country.

In the U.K., the Serious Fraud Office caught BAE Systems, one of the world’s largest military contractors, bribing officials in Tanzania. The penalty:  it ordered BAE to buy $40 million of textbooks for Tanzanian schools.

One of the proponents of this scheme is the Social-Economic Rights and Accountability Project in Nigeria.  In an interview with 100Reporters earlier this year, Lanny Breuer, who heads the Justice Department’s anti-corruption efforts, said that he was open to considering proposals along these lines.

Perhaps this can prompt a new twist on an old saw: To the victims go the spoils.

Sweep to To Mexico, from Nigeria, via Kazakhstan

It takes a lot of nerve to compare oneself favorably to Jesus Christ.

It takes even more nerve when the person making the comparison is facing corruption charges.

Yet that is exactly what Indian Home Minister P. Chidambaram did in response to allegations that he or his son benefited from a telecom deal in 2006, when he was finance minister.  The New York Daily News carried a story from IANS, the Indo-Asian News Service, saying that Mr. Chidambaram told a government hearing, “‘Father forgive them, for they know not what they do’… I pray the god forgive their sins. ” He said he was recalling a lesson a missionary teacher had taught him in his school days.

He is accused of delaying the sale of an Indian telecom company, Aircel, to Malaysia-based Maxis in 2006 so that his son Karthi benefitted financially. Chidambaran has said the allegations are “wild and reckless.”

Adding to the drama of the moment, after Chidambaran made his statement, he was shouted down by his political opponents. A “ruckus” ensued, according to the press report, which resulted in an adjournment.

Sweep to Chidambaram invokes Jesus to deny corruption charges


Leslie Wayne

Leslie Wayne

Leslie Wayne, former senior editor at 100Reporters, is an award-winning business reporter, formerly at The New York Times. Ms. Wayne joined The Times in 1981 and has covered Wall Street, banking industry regulatory reform, municipal finance scandals and, most recently, the aerospace and military industries. Ms. Wayne has an M.B.A. in finance from Columbia Business School and was also a Knight-Bagehot Fellow in Business and Economic Journalism.