Week 4 recap of Kwame Kilpatrick's federal trial

More testimony heard in federal trial against former Detroit mayor, 3 others

Published On: Oct 19 2012 04:49:56 PM EDT   Updated On: Oct 19 2012 05:00:04 PM EDT
Kilpatrick friday oct 19
DETROIT -

Monday

Court in recess.

Tuesday

Courtroom testimony revealed that the Kilpatrick Civic Fund paid for a 90th birthday party at the Antheneum Hotel, the services of a PR crisis manager who once worked with Monica Lewinsky and a Nike golf bag with "The Mayor" embroidered on it.

Earlier on the day, 4 witnesses who all worked in investment management testified about donations they had made to the Kilpatrick Civic Fund in 2007 and 2008. Pugh Capital Management in Seattle, Washington donated $2,000, Chicago Equity Partners gave $20,000, Churchill Financial of Clearwater, Florida contributed $1,000 and Northpointe Capital of Troy handed over $10,000. All the witnesses said that had they thought their donations to the Civic Fund would go towards personal or political campaign expenses for Kwame Kilpatrick, they would never have contributed.

U.S Attorney Jennifer Blackwell asked Michael Nairne of Chicago Equity Partners if he would have donated for Kilpatrick "to go to the La Costa Resort for $8,000?" No was his unambiguous response.

Judy Smith, a D.C. based crisis manager whose life and work serves as the inspiration for a primetime series, testified that she received a call from Mr. Kilpatrick in early 2008 to enlist her aid with the text messaging crisis. For her work over the course of several months, Smith invoiced the former Detroit mayor close to $180,000. Smith's company Impact Strategies received two checks from the Kilpatrick Civic Fund in 2008- one for $30,000 and a second for $40,464. A third check for $25,000 was made out to Smith's L.A. based non-profit Impact Philanthropy. Smith said there was an amount of $60,000 outstanding on the bill that was ultimately struck off by her bookkeeper.

Another witness, golf club salesman William Brane Scott, told the court how Kilpatrick's golf instructor Butch Rhodes handed him a Civic Fund check for $3,050 to pay for a set of Nike stainless titanium golf clubs and a staff bag with "The Mayor" emblazoned on it.

"Nike makes good stuff," said Mr. Scott.

FBI agent Robert Beeckman took the stand again today to discuss telephone conversations recorded as part of wire taps. Amongst those was a Wayne County Jail conversation between Kilpatrick and his sister Ayanna to plan the 90th birthday celebration for their grandfather Marvell Cheeks. The jailhouse party planning included snippets of Kilpatrick telling his sister "momma we gotta do something really nice for grandaddy's birthday" and "get like a DJ to play that big band sound."

The party for 140 guests was held on the 8th floor of the Antheneum Hotel in May 2009. Menu items included Chicken Tarragon, medley of vegetables, roasted potatoes and a large birthday sheet cake. On a total bill of more than $7,000, a payment of $2,500 was made with a Civic Fund check and a further $3,800 was paid in cashier's checks.

Other recorded conversations included wire taps of Bernard Kipatrick's cell phone conversations. On one call he could be heard soliciting a donation for the Kilpatrick Civic Fund from Abner McWhorter of Expression Publishing in Detroit. How much asked McWhorter?

"Big sellers, 20, 25. If you can do 5, that would be really cool," replied Bernard.

The last wire tap was for a conversation between father and son Kilpatrick about how to pay a hotel stay in Orlando, Florida. Bernard is at the front desk and having issues because they need the check to be certified and signer Christine Beatty is nowhere to be found. The check from the Civic Fund was ultimately not negotiated for that stay.

A debit card for the Civic Fund was used to transact two payments of $367.89 at the Marriott Cyprus Harbor in Florida. John Shea, lawyer for Bernard, showed evidence that Bernard had used his American Express card to pay for flights, meals and car rentals.

"So the only expense charged to the Civic Fund debit card on this multi thousand trip would be the $367 room charge?" Shea asked the witness.

"Yes," replied Beeckman.

Wednesday

The Kilpatrick Civic Fund wrapped up.

The day got off to an interesting start with the glaring absence of former Detroit water department boss Vicor Mercado and one of his lawyers, Martin Crandall, from the courtroom. Judge Nancy Edmunds informed the court that they were in the building reviewing some documents. Mercado's absence generated much more of a buzz than his presence ever did as it had the rumor mill swirling at full tilt as to what he could possibly be doing.

More witnesses testified to receiving checks from the Kilpatrick Civic Fund. Linda Byrd, former head of A Step Ahead preschool in Detroit, told the court that she received a $5,000 check from the Civic Fund for the preschool's graduation activities in 2002, the same year Kilpatrick twins Jelani and Jalil graduated. In earlier questioning of IRS agent Ron Sauer, Kwame defense lawyer Jim Thomas had implied that the twins had graduated a year earlier.

Graduation activities included a "Kinder Prom" with a formal dance, a graduate trip, speeches and performances and the actual ceremony. Byrd testified that she spoke with Carlita Kilpatrick, a member of the school's PTO, about the possibility of inclement weather during graduation and the need to buy a tent. Shortly thereafter, Carlita returned with the Civic Fund check for $5,000.
Realtor Aaliyah Salaam testified that her company, Regality Management Services, received payment from the Civic Fund when the Kilpatrick family signed a 6 month lease on a temporary apartment rental in September 2008. On an invoice of $17,500, 3 checks totalling $12,800 were issued from the Civic Fund as partial payment.

The court also heard about more Civic Fund solicited donations from companies. Gwendolyn Butler of Chicago-based investment managers Capri Capital Partners testified to donating $5,000 in July 2008 and David Upmeyer of Tetra Tech, a consulting engineering firm that has worked with Detroit's Water and Sewerage Department for 20 years, said they gave $4,000 in June 2008.
Investment banker Fred Prime testified that his company Loop Capital Markets made four donations of $10,000 to the Civic Fund. Prime said that after hearing news reports in 2008, his company opted to give no further donations to the non-profit.

Mr. Thomas got the banker to concede that he sometimes conducts business during golf outings. This was obviously in reference to testimony that a Civic Fund check for more than $3,000 was used to buy golf clubs and a bag embroidered with "The Mayor".
U.S. Attorney Eric Doeh was having none of it.

"Did Loop Capital purchase your clubs?, he asked the witness on redirect. No answered Prime.

The last witness on the day was IRS agent Rowena Schuch. Her testimony went directly to discrediting some of the earlier defense cross examination of IRS agent Ron Sauer. With regards to a Civic Fund payment of $1,026 to Joan Anderson Travel, Bernard Kilpatrick's lawyer John Shea had intimated that Bernard may not have been in New Orleans in early February 2008. But the IRS had credit card charges for a meal, hotel and some jewelry that proved he most definitely was there in that time frame.

The best word play of the day went to Jim Thomas. Earlier in the trial, Thomas had cross examined agent Sauer about a stay at the Sonnenalp Resort in Vail, Colorado that was paid in part with a Civic Fund check for more than $1,000. The defense lawyer had implied that the former mayor was there to attend a National Conference of Mayors.

Agent Schuch testified today that the IRS subpoenaed the shedules for any possible conference of mayors- they never found a National Conference of Mayors- and none of them listed a meeting in Denver in November 2002.

"Did you ever talk to anyone in the mayor of Denver's office?" Thomas asked a perplexed Schuch.

So it's not a "National Conference of Mayors" but a "conference with the mayor."

Thursday

Homeless shelter owner Jon Rutherford testified that between 2000 and 2003, he doled out nearly half a million dollars to Kwame and Bernard Kilpatrick. And he did it because he wanted to build a huge casino project on the East Riverfront that would have yielded him a payout of $25 million.

Rutherford was sentenced to 21 months on tax charges in January 2011. He could get a reduced sentence as a result of his testimony in the Kilpatrick federal trial.

The witness ran a non-profit called Metro Emergency Services that provided services to the homeless and to the mentally ill. At its peak, MES generated $38 million a year. He also had a for profit business called DPR Management LLC that charged MES rent. 
Rutherford testified about various payments he made to Kwame and Bernard Kilpatrick. He was initially introduced to Kwame by Curtis Hertel, former Michigan Speaker of the House. The witness told the court how he was so impressed by Kwame's intelligence, drive and ability to interact with people.

"I thought the world of him," said Rutherford.

In a 2 week period in September 2000, Rutherford gave $100,000 to the 21st Century Fund, the Democratic PAC. He said that he donated the money with two clear conditions. The first was that Kwame would be in charge of distributing the funds. The second was that if the Democrats won the state House elections in November 2000, Kwame would get to be the Speaker. If they lost, he would be minority leader. Kwame was ultimately elected House minority leader.

Then came Kwame's mayoral aspirations. Between April and November of 2001, Rutherford supplied Kwame with $184,000 to help make his dreams a reality. Rutherford circumvented strict campaign financing laws by donating to Kwame's non-profit Kilpatrick Civic Fund and  the Next Generation Detroit political action committee. He also wrote a series of checks totaling more than $97,000 to Kwame's Community Coalition in the days leading up to the mayoral election.

But that wasn't enough.

Rutherford testified that on election day, he was at a funeral when he got a call from Bernard saying they needed more money. The witness said he met with someone from the Community Coalition to give them a check for $20,000. Because of the late hour, the banks were closed so Rutherford arranged for the check to be cashed at a grocery store.

Even after Kwame was elected mayor of Detroit, Rutherford continued to bankroll him.

First there were the suits. At a May 2002 fund-raiser for Kwame's mother, then-congresswoman Carolyn Cheeks Kilpatrick, the former mayor approached Rutherford for $10,000 to buy suits for a trip to Dubai.

The businessman didn't hesitate for a second. "He's my guy", said Rutherford. "I said 'I'll take care of it."

During a 2002 dinner with the Kilpatrick family at the Green Valley Ranch Resort in Las Vegas, Kwame informed Rutherford that he needed some more cash. Rutherford gladly handed over somewhere between $2,000 to $5,000.
And when a mutual friend called Rutherford and suggested he hire on Bernard as a consultant for $10,000 a month, he again complied. Over an 11 month period beginning in 2002, Rutherford paid Bernard's Maestro Associates $113,000.

All told, Rutherford paid Kwame and Bernard checks totaling $440,275. And that figure doesn't include the $10,000 for the suits, the $2,000 to $5,000 handout at the restaurant in las Vegas or the championship boxing tickets that went for $1,200 a piece (the Lennox Lewis/Hasim Rahman November 2001 title match in Las Vegas).

And what was the goal of the handouts to the former mayor and his father. Did the witness need Kwame for his ambitious East Riverfront casino project asked the prosecution?

"I couldn't have done it without him," conceded Rutherford.

Nearly half a million dollars later, Rutherford's casino project never got off the ground.

Friday

Three sisters testified to signing money orders on Bobby Ferguson's instructions in order to circumvent limits on personal donations to Kwame Kilpatrick's mayoral campaign.

Ferguson's former lover Renee Newsome testified along with sisters Josephine Johnson and Darlene Jefferson to being asked to sign money orders in July 2004. The contractor presented each of the women with 4 money orders totaling $3,400. The orders were unambiguously made out to "Kilpatrick for Mayor". The limit for personal contributions to a political campaign is $3,400.

When Ferguson heard that his girlfriend of 7 years was to be questioned by the FBI, he told her to "stick to your story."  Newsome admitted that as a result she initially lied to investigators about the money orders.

U.S. Attorney Jennifer Blackwell asked the witness what Ferguson meant when he said that.

"That the money was mine," replied Newsome.

Newsome's sister Darlene Jefferson testified that in 2005, before she was due to testify to a grand jury, Ferguson came into her bedroom and told her to say that the money never came from him. Jefferson said that Ferguson warned her if she didn't, it would fall back on her sister Renee and "she would get in trouble for the money order."

All three sisters were refunded the full amount of the campaign contributions around the time they were being questioned by the FBI. They testified they never returned the money to Ferguson.

Earlier in the morning, convicted businessman Jon Rutherford was asked by Kwame Kilpatrick defense lawyer Jim Thomas if he had any expectation of remuneration or reward for his various financial contributions to the Kilpatricks. No replied Rutherford. This seemed contrary to yesterday's testimony which indicated he hoped that he would land an ambitious casino project on the East Riverfront in return for his financial favors.

Witness Ahmad Chebbani, the co-founder of the Arab-American Chamber of Commerce, told the court about a trip to Dubai in May 2002. Chebbani led a Detroit trade delegation that included Kwame Kilpatrick, his former bodyguard Loronzo Jones and former aide Derrick Miller. On the last night of the four day trip, Kilpatrick left in the middle of a dinner with high-ranking Dubai officials in order to get fitted for a suit. Yesterday Rutherford testified to giving Killpatrick $10,000 for suits for the Dubai trip.

Upon return from the trip, Chebbani said he got a call from Miller asking about the shipping of suits. The witness said he was surprised by the question and told him he knew nothing about it. Miller told him that it seemed the suits had gotten lost in the mail.
Ernest Johnson of non-profit Community Coalition testified that he was contacted by Bernard Kilpatrick in 2001. Kilpatrick wanted the civic organization to endorse Kwame for mayor in the upcoming election. Johnson testified to receiving nearly $90,000 from Rutherford's DPR Management LLC to help pay for staffers who distributed election brochures and drivers who would take voters to the polls. On election day in November 2001, Johnson met with Rutherford to get a check for several thousand which he cashed at a grocery store.

"People at the top of the slate pay the slate," said Johnson.

Court resumes Monday 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.