Prosecution rests in Kilpatrick corruption trial
Local 4 is inside the courtroom for the federal corruption trial of former Detroit Mayor Kwame Kilpatrick, Kilpatrick's dad Bernard Kilpatrick and his childhood friend Bobby Ferguson. Each day we bring you information from inside federal court as it happens.
8:57AM Video turns on and for some reason Judge Nancy Edmunds is already in the courtroom. Kwame and Bernard Kilpatrick are both seated at the defendants' table but no sighing of Bobby Ferguson yet. Counsel that is present in the courtroom heads over to the judge's bench for a sidebar.
On Tuesday, prosecution wrapped up its case with a series of texts and audio with FBI special agent Bob Beeckman on the stand. Today, the defense will finish up its cross examination of Beeckman before heading to the defense witness.
9:05AM Judge discussing evidenciary issue about admissibility of checks through Rowena Schuch. Judge saying now she thinks they are admissible but still believes they were not admissible through Schuch. Prosecution will make admissible through EPA agent Carol Paszkiewicz. Ferguson's lawyer Mike Rataj objects. Wasn't the right witness for them.
"I think it opens up Pandora's box, judge," says Rataj. Says it's unfair to take one check and put it into evidence. The other issue is that now they need to see every check. Seems there were more than 400.
Judge says that Rataj pointed out to Schuch that many of the checks to cash were to rebut a contention of buying truck parts. Judge says that if the EPA agent can establish foundation for the checks, they are admissible.
Rataj continues that there is no question as a defense team they stipulate the authenticity of records. They challenge on evidenciary basis.
US Attorney Mark Chutkow adds that Paszkiewicz conducted the search and found the checks on Ferguson's desk.
9:12AM Jury called in.
FBI agent Bob Beeckman back on the stand. Mike Rataj cross examines.
Going through text messages from Tuesday.
Text dated March 20 2003 between Kwame and Bobby. Had to do with Club Rain. Being built by Matt Flynn. Private job.
Ferguson: Club Rain. The white boy thinks he is slick....
Text between Kwame and Bobby on the same date about Jim Jenkins.
Bobby: What up Black. you see the business second today Jim Jenkins front page about the casino might get kicked off....
Rataj saying this was another private job.
Text from September 6th 2002 between Kwame and Bobby.
Mentions a guy by the name of Bob Thompson, principal of Thompson McCully. Thompson using his own money on the project but ended up hiring company from Lansing that hired the other contractors.
Rataj says that Thompson McCully could have hired whoever they wanted as it was a private job.
Another text from March 31st 2003.
Between Ferguson and his assistant. Discussing getting hockey tickets. nothing in the text message to indicate that Kwame and Bobby were together for the game. Text indicates in the text that bobby was going with George Jackson of the Detroit Economic Development Cop.
Text on April 16th 2003 between Kwame and Christine Beatty.
About Detroit Police headquarters. Rataj says it never materialized under Kilpatrick administration. True says Beeckman. Ratak says only happening now under Bing. Right says Beeckman.
Looking at chart that agent Paszkiewicz put up on Ferguson's contracts under the Kilpatrick administration. Discussing the Book Cadillac renovation contract. Rataj saying that Kimberly Clark was involved at one point but is not on the chart. Beeckman agrees.
Rataj says that the original developer was Kimberly Clark followed by another contractor before Marous became general manger of the contract. Rataj says this is not accurately reflected on the chart.
Discussing the $9,198,153 generated in revenues by FEI onh the Book Cadillac. Rataj says that doesn't include costs and expenses. Right says Beeckman.
Rataj done. Jim Thomas has no cross.
9:27AM Chutkow redirects.
Chutkow says Shea asked questions about a conversation between Kwame and Bernard.
"you got to stay away from that little guy..." says Kwame to Bernard.
"From Chi". Government had indicated "Chi' was nickname for Andre Cunningham.
Shea mentioned someone called Cooper or Jeffrey Beasley possibly being "Chi". Neither one of these men were under federal investigation of the time.
Beeckman says that Andrew Cunningham is from Chicago. September 16th 2007 was when the NJ sting operation on Cunningham was revealed. Three weeks before the phone call
She objects about the timing. Beeckman corrects himself and says it was 2 months before.
Going back to the Club Rain text about "the white boy thinks he is slick."
Chutkow asks if private jobs need public permits. Yes says Beeckman a building permit, and then a "cabaret" license for dancing.
"Club Rain. The white boy thinks he is slick....Is it alright if BLDS safety f$%ks with his permit."
Beeckman says that head of Building and Safety was Amru Meah who reported to Kwame.
9:33AM Thomas decides he wants to do cross.
On this Club Rain exchange from March 20th 2003.
Thomas asks if Kwame says anywhere on the text where he agrees to "f$%%" with his permits.
Thomas says that Bobby is known to spew off. Yes says Beeckman.
Thomas asks if anywhere in the text that Kwame encourages Bobby. No says Beeckman.
9:35AM Rataj back to cross.
Text from June 29th 2004 between Bobby and Kwame.
Chutkow objects to an article that Rataj wants to introduce. Rataj asks for a sidebar to discuss it.
Judge sustains the objection and disallows the exhibit. Moving on.
Asks Beeckman if he has ever seen an article from Crain's about Ferguson's company.
Beeckman says he doesn't think he has seen the article.
Rataj has no further questions.
9:41AM And back to the Club Rain text.
Chutkow says going back to Thomas's question about Kwame encouraging Ferguson's behavior.
Chutkow asks if anywhere on the text the mayor asks of this is an inappropriate request to make of him.
Thomas objects and judge sustains.
Chutkow asks is at any time there were any exchanges where Kwame says the behavior was inappropriate.
No says Beeckman.
9:43AM Chutkow calls EPA agent Carol Paszkiewicz to the stand.
Thomas asks to be excused to go to the bathroom.
Chutkow asking about Rowena Schuch's testimony on Monday where she presented chart of checks to cash/ cash withdrawals.
There were numerous checks with memo line that said "truck parts". Paszkiewicz agrees that was the case.
January 15th 2009 was when the witness conducted search of FEI. Found the checks in the credenza in his desk area.
Looking at Bobby's office picture showing his desk. There was a credenza with lots of partition organizers. it had filing cabinet drawers.
Witness found canceled checks, negotiated checks. Two binders of checks yet to be written- 3 checks to a sheet with carbons.
Witness says that after testimony about checks with "truck parts" in memo line, she went back to look through check book.
Looking at a check from FEI for $8,500 on October 25 2007. Written out to Bobby Ferguson. Signed by Bobby Ferguson.
Witness says she found negotiated checks to various entities, including outside entities.
Found a check to Golden Sun, a jewelry store in Southfield.
Witness looked at carbons and negotiated canceled checks seized to find Golden Sun.
Check on September 12th 2003 for $9,900. Made out to Golden Sun but memo line reads "truck parts." Signed by Ferguson.
Chutkow says does Golden sun sell truck parts. No says the witness.
Now looking at Comerica transaction information for this check. Negotiated on September 12th 2003.
Also looking at stub to Golden Sun for "truck parts" for $9,900.
Stub and original check were not attached to each other.
Now looking at the carbon for the same check. Can't read out who it's made out to but same date and reads "truck parts" in memo line.
Looking at another September 12th 2003 check to Golden Sun for $9,500. Memo line reads "truck parts.". It's the next sequential check, 1006 where the previous one was 1005. Also cashed the same day.
No further questions.
9:58AM Rataj cross examines.
Rataj asks if witness remembers Schuch's testimony. She does.
Witness says she facilitated staff at the US Attorney's office to give Schuch information to create her chart.
Thomas just back from his bathroom break.
Witness says there were less than 100 negotiated checks that she seized.
Rataj says but there were other agents involved in the execution of the warrants. Asks if it's possible to assume that other agents seized checks.
Witness doesn't know this but concedes it's possible.
Looking at the October 25th 2007 check made out to Ferguson where memo line reads "truck parts."
"You can't tell this jury what Mr. Ferguson did with this money," asks Rataj.
No says witness.
Looking at the FBI checks made out to Golden Sun.
Witness says she doesn't know how many medallions were purchased with the check. At least one was.
Distracted by reading a Crain's article from June 2009 that states that Gary Yee, the manager of Southfield jewelry store Golden Sun, pleaded guilty that year to money laundering at his store. According to the article, Yee would allow purported drug dealers to buy jewelry to conceal their income. Seems he conducted more than $1.5 million in transactions in an 8 year period.
Looking at 3 other checks that do not indicate "truck parts" in memo line but "raffle" and "bonus."
Looking at check for $21,000 from 2007 that reads "graphics" in the memo line.
Counsel heads for sidebar.
10:16AM Not sure what the issue is exactly but we are taking a 10 minute break for the jury.
Some of the lawyers have left the room as have Kwame and Bernard. Rataj getting papers together.
10:20AM Chutkow addresses a September 17th 2007 receipt of funds exhibit. Opposing to relevance of defense exhibits and witness's ability to address them.
Relevance beyond the scope of witness has to say. Chutkow says they are not suggesting they don't know what he did with all of the cash. With 2 of them, he bought jewelry and wrote "truck parts."
Rataj says he is going to give the jury concrete examples of what the money was used for.
Rataj says all he is trying to do is give the jury a concrete example of what is written in the memo line correlated to what was bought.
Judge doesn't have a problem with that. Worried about where the document he is using came from.
Chutkow revising his objection. No objection to authenticity of the documents. Looks like Bobby did purchased some trucks. This all tr5anspired in September 2007 but check is for April 2008. Not sure what the correlation is.
Judge says it sounds like good cross examination to her. So it looks like we are going ahead with Rataj's exhibits.
10:29AM Jury coming back in. Bobby just left the courtroom as the jury comes back in.
Judge tells jury that the objection has been overruled and Rataj will go ahead with some of the exhibits.
Looking at check for $25,000. Memo line reads "graphics."
Looking at document from September 17th 2007 from Eastern Michigan Kenworth on Wyoming for $352,203 for 3 trucks. Looks like an order form. Balance due is $317,203.
Looking at promissory note for First Source Bank from October 27th 2007 for $317,403. Signed by Bobby. Loaning funding date is September 27th 2007. Right around the date of the Kenworth document.
Looking at title application. Plate # AB42023. Application for Kenworth tractor. First secured interest, First Source Bank.
Picture of a red truck with yellow and black checkers on the front. Witness says that the plate matches the document and it looks like a newer model truck.
Each truck was $117,000.
Now talking about the graphics on two- trucks. A plainer white truck and the red truck with the black and yellow checkers. Rataj says this is after purchase costs. Witness says she has no idea.
Several weeks after truck purchases, a check made out for "graphics."
Now looking at check from April 30th 2008. Made out for "new truck parts".
Side note: after this trial started, an attempt was made to repossess the three trucks. To this day, the repo man has been unable to find them.
Rataj says that the Ferguson Enterprises logo was an after market purchase. Witness agrees. Not sure about the other graphics. "Wouldn't know one way or another," says witness.
Rataj done. No redirect. Witness excused.
10:45AM Chutkow formally rests the government's case.
Taking a 20 minute break.
READ: 75-page document of the government's proposed jury instructions.
Judge says we are going over Rule 29 request after the break. Apparently, this is a defense motion to the judge for acquittal before it goes to the jury.
11:08AM Judge says she needs to make a finding. Judge finds that the government has made its case and that each of the three members who are defendants were part of the conspiracy. Judge says this is merely evidenciary foundation for statements admitted during course of the government's case. Jury will make verdict
Jim Thomas says they felt they would do Rule 29 after they had rested their case. Thomas says throughout the case they have made objections and will not make lengthy discourse except to protect the record.
Judge denies the motion feels there is sufficient evidence to go forward.
US Attorney Michael Bullotta says one of the defense witnesses is going to be a student from the Sherill School. Bullotta says that this witness only relevant if they were at the school until after 2000.
Thomas says they will call other witnesses to testify to the program that Carlita Kilpatrick instituted during the School Arts Fair.
Judge seems to have a problem with the time frame. Thinks it might be very confusing if she didn't participate in the time frame. If she was there in 1999, it's not relevant.
Has to do with Carlita's peer mediation an conflict resolution that she was paid for at the school.
Gary Leeman is to be first defense witness who will be voire dired before the jury comes back.
11:16AM Bullotta is questioning the defense witness.
Leeman is CPA in Michigan.
Has no more specialized training in 501c4s.
Witness has not provided advice to his clients on 501c4.
This guy's hair is so distracting. There is a wispy tuft of white hair sticking straight up on his mostly bald head.
Witness says usually his cases are civil cases, tort issues, but currently he has 3 criminal issues. Has never testified on a RICO claim.
Bullotta trying to establish if he is an expert. Bullotta has no problem with this witness.
11:21AM Defense calls it's first witness. Not Leeman but a woman who may be a sales director at the Athenaeum Hotel.
Judge instructing that the defense has no obligation to provide witnesses but Kwame wants to do so.
Sophie Plastiras is the witness. She is sales director at the International Banquet Center by Greektown Casino. Has been there 12 years. She usually books events and goes over food and beverage with event planner.
Remembers a party for Marvel Cheeks. Says government retrieved records for the birthday party. Doesn't remember who came.
Made documents available to the feds.
Plastiras says there was an event for Kwame's birthday on June 9th 2006. Looking at the "Splash of Red" invitation for Kwame's party.
Witness says she helped set up the party at the ballroom in the Athenaeum. The capacity of the room is 900 to 1,200. Another 400 in the balcony so maximum is 1,600.
Witness recalls the birthday celebration. Kwame came in wearing black with a spash of red. Same thing with Carlita. Don Barden, Jim Pappas and Ted Gatzaros were there. There were roughly 1,500 people there. Party started at 8pm. Witness didn't stay until the end.
Witness says the menu was basically hors d'oeuvres. It was cash bar.
36 marked in grey on the invitation.
11:32AM Bullotta cross examines.
Looking at check for $2,500 from Kilpatrick Civic Fund to the Athenaeum hotel on May 8th 2009. The money was for Marvel Cheeks's birthday celebration. Doesn't recall how many people were at the party.
Looking at witness's signature on banquet event order. She recognizes it for the 90th birthday celebration on may 15th 2009.
Grand total $6,620 for the party. $2,500 paid by the Kilpatrick Civic Fund.
11:36AM Thomas redirects.
Thomas asks if she knows if there were people other than the Kilpatrick's at the event. She can't remember.
She did go over with the food and beverage but can't remember who it was with.
Witness agrees this event was in 2009 and that she remembers the Splash of Red event better even though it was earlier in 2006.
"It was more of a bonding type of thing," she says of dealing with Carlita on Kwame's birthday.
It was a plated chicken dinner for 140 adults for Marvel's 90th.
Witness says the government came to her 3 years ago about Marvel's event, right after it happened.
Witness steps down. Think the point of her was to prove how many people there were at the Splash of Red party in 2006.
11:39AM Thomas calls Gary Leeman to the stand.
CPA licensed in Michigan. Practice located in Farmington Hills. Do research in other parts of the country.
Witness's specialty is forensic accounting. Says he is an investigative accountant to find out answers to problems like embezzlements, divorce case, issues like malpractice, anything related to personal injury.
Thomas says he has been retained and appointed to look into a specific area of the Kilpatrick Civic Fund.
Asks him if he is part of the Association of Certified Tax Practitoners. He is.
It's hard to follow this guy. Painfully dry and esoteric.
Going over the witness's resume. Witness has not been suspended from any associations.
Witness says he has testified over 150 times over the years.
Thomas moves to have him qualified as an expert witness.
Witness says he has looked at articles of incorporation for the Kilpatrick Civic Fund as well as application for tax exempt status.
11:50AM Leeman says he prepared a chart comparing 501c4s and 501c4s.
Witness says a 501c4 is an entity accepted by the state of Michigan and approved by the IRS. Usually referred to as a social welfare organization.
Witness says it allows for different activities than the 501c3. Both are non profits and exempt.
A person employed by a non profit could receive wages. But you won't get dividends from the organization.
501c4 can performing lobbying services says the witness. 501c3 has limited capabilities for lobbying.
Thomas asks witness to describe lobbying. Witness says potential influencing to make something happen that you want to take place- majorly paraphrasing.
Thomas asks him to describe lobbying for the jury. Witness says a lobbyist is someone who has a position who convinces someone with power to permit lobbyist's organization to do what it wants to do. again paraphrasing a convoluted response.
Witness says a 501c3 can take a charitable deduction on tax return. on 501c4 is general, contribution in general is not deductible.
Looking at the certification of the application of the Kilpatrick Civic Fund for tax exempt status.
Thomas, once again is going over the Articles of Incorporation for the Kilpatrick Civic Find. Killing us all slowly. The tact appears to be an attempt at validating the personal expenses of Kilpatrick.
The Summary of Cash Deposits Chart for Kwame from 2001 to 2008 is on display. Thomas suggest all the cash transactions have not been included in the chart.
The expert testifies the data is flawed if all the cash transactions are not included. They used many more words than that, but that is the idea.
Thomas has no further questions.
5 min break.
The government begins its cross of the defense expert.
Leeman admits he has never testified in a criminal case before today, he has never worked for the IRS, and has not reviewed any of the evidence in this case.
Bulotta displays a chart illustrating cash deposits made by Kwame Kilpatrick and asks if the cash deposited were bribes or extortion payments would they be taxable?
Leeman say they would be taxable and reportable.
Bulotta asks if funds from the Civic Fund could be used for a political candidate? Leeman agrees, that would not be legal.
The tape of Kilpatrick in his campaign claiming "not one penny from the civic fund has been used because that is not legal."
The Cadillac lease is brought up, the answer is long and boring - but, generally the use must be highly documented in order for consideration.
Bulotta asks if yoga lessons would be allowable from the civic fund - Leeman laughs, and says: "not even close."
So far, the defense witnesses have done more for the Government than the defense.
Mercifully, the judge calls it for today.
Leeman is not available for tomorrow, so he will be back next Tuesday. We will carry-on with the next witness tomorrow at 9am
About the author
Alexandra Harland is a Princeton undergrad and has a masters degree in International affairs with Columbia. A Montreal native, she worked with the Daily Telegraph newspaper for a few years before transitioning to TV, when she worked at ABC News with Peter Jennings. Alexandra has also worked in newsrooms in both Detroit and Boston.