Drug link in alleged bribe of Kilpatrick's dad probed
Feds explore claim that $100K from heroin dealer secured pension loan
By Robert Snell
The Detroit News

Detroit— Federal agents are investigating whether money for a $100,000 bribe allegedly paid to former Mayor Kwame Kilpatrick's father came from an accused international heroin dealer, The Detroit News has learned.
The alleged bribe, first reported by The News in April, was paid to Bernard Kilpatrick by Detroit businessman Abner McWhorter to obtain a $10 million loan from a Detroit pension fund, the businessman's partner said.
Investigators are probing whether McWhorter borrowed the $100,000 from Macomb County resident Carlos Powell, who was indicted in January and accused of heading a large-scale drug ring, sources said.
The allegation surfaced Thursday, two days after McWhorter's business partner, George Kastanes, was arrested by federal agents in Florida following a two-month manhunt and a search for $5 million in missing Detroit pension fund money.
"My understanding is McWhorter borrowed money from the drug dealer to do the pay-to-play," Kastanes lawyer, Joseph Brien, told The News.
He did not identify the drug dealer by name.
A second source familiar with the investigation confirmed federal agents are trying to determine whether Powell bankrolled the alleged bribe.
The allegation offers insight into the ongoing FBI investigation of the city's pension funds, which in February yielded an indictment of former city Treasurer Jeff Beasley.
"The fact someone may be saying this and that an investigator is assigned to see whether it's true doesn't make it true," Bernard Kilpatrick lawyer John Shea said Thursday. "Bernard has always maintained that he had a legitimate business relationship with Abner."
Powell's lawyer did not return phone messages seeking comment Thursday.
A U.S. Attorney's Office spokeswoman declined comment.
The alleged bribe is the latest fallout from a failed $10 million pension deal to buy foreclosed homes. The deal with McWhorter's company, Paramount Land Holdings, led to McWhorter's suicide, legal battles and a search for $5 million in missing pension fund money.
Investigators have uncovered other ties between Powell and McWhorter.
Before he died, McWhorter had transferred some of the foreclosed homes to Powell's company, according to federal court records.
The property transfers were discovered by federal drug agents during a raid at Powell's home two years ago, according to a search warrant application reviewed by The News.
It's unclear why the properties were being transferred or if the real-estate deals were related to the alleged $100,000 bribe.
Kastanes, who was released from custody Thursday following a court hearing in Florida, does not know whether Powell loaned money to McWhorter.
"It could certainly be why the properties were conveyed to (Powell)," Kastanes said Thursday. "Anybody can make whatever assumptions they want on the damn thing.
"I don't think Abner had that kind of money."
Paramount's former attorney Ben Gonek said Thursday he does not know anything about an alleged bribe.
The alleged bribe was paid before January 2008. That's when the Detroit Police and Fire pension fund loaned $10 million to Paramount, which was formed in January 2008 to borrow money and buy foreclosed mortgages.
The loan went into default last year and McWhorter committed suicide in August amid accusations he was involved in a Ponzi scheme that defrauded the pension fund.
Before the loan was issued, McWhorter hired Bernard Kilpatrick's consulting firm, Maestro Associates, to work on the pension deal.
Bernard Kilpatrick received the bribe in spring or summer 2007 to ensure the pension fund, which included members of Kwame Kilpatrick's administration, approved the deal, Kastanes said.
Kastanes has said he was unaware of the bribe until after the loan went into default.
Prosecutors previously have accused Bernard Kilpatrick of wrongdoing related to the city's pension funds.
Bernard Kilpatrick, Kwame Kilpatrick and former city official Derrick Miller were charged in a racketeering conspiracy indictment with soliciting and pocketing more than $1.2 million in cash and property from people seeking deals with the city's pension funds.
"The allegations in the indictment are just allegations and they're contested," Shea said.
rsnell@detnews.com