DETROIT - Monday:
4 witnesses testified about falsified invoices, a lavish office renovation and a profit made on the sale of a home purchased with state grant funds from contractor Bobby Ferguson's non-profit group Detroit 3 D.
Chris Boettcher, President of Airtec Corp, testified today that invoices submitted to the state presumably from Airtec were in fact not his company's. He also testified that he never did any work on Meyers St and that he never authorized the statements sent with Airtec's name to the State Budget Office.
Next on the stand was Bob Murray, President of the Contract Design Group, a commercial and residential interior contracting company. Mr. Murray testified that in 2001 he did extensive work for Ferguson Enterprises which included hardwood floors, marble detailing, a spiral staircase and an upper loft in the President office. Initially, the loft area was meant to be a meeting space but due to budget constraints, midway through the project it became a "chilling pad" complete with television screen. The total cost of the renovation was $71,500 with an initial deposit of $37,000.
Murray described meeting Bobby's wife and children in the backyard of their home and about seeing campaign signs that read "Kwame for Mayor" on work vehicles.
"What's a Kwame?" asked Murray. Ferguson explained that he was hoping his life-long friend Kwame Kilpatrick would become mayor so that he could get some business when Kwame got rid of Detroit's blighted homes.
A former resident of Meyers St, Martin Jolly, described to the court how the home next door was falling apart: leaking roof, falling ceilings and weed overgrowth everywhere. He never met the owner of the property but said he recalled a brown skinned person driving a Cadillac come by once. Mr. Jolly ultimately bought the property in July 2005 for $50,000 from Detroit 3D.
Lastly, IRS agent Ron Sauer was called back to testify. Judge Nancy Edmunds explained to the jurors that because of the length of the trial, certain witnesses would be called back for different "chapters" of events. Agent Sauer testified that a check for $42,567.17 made out to Detroit 3D was deposited to the Ferguson Enterprises account at First Independence Bank.
The agent also described how when the $250,000 Arts and Cultural grant for Detroit 3 D came into one of 2 accounts at Merrill Lynch, the first transaction on the account was to wire transfer $100,000 to Carlita Kilpatrick's U.N.I.T.E.
Susan Van Dusen, one of Bobby Ferguson's defense lawyers, deftly cross-examined the witnesses. During her questioning of Murray, she pointed to date inconsistencies on government documents and explained that of the $71,500 bill from his company, Ferguson Enterprises paid $41,898.48. She also got Mr. Jolly to say on the stand that the seller never came looking for him and that it was he who pursued the sale of the home on Meyers St.
Van Dusen made a point of reminding Agent Sauer that as of November 2002, Detroit 3D had severed its ties with the SBO which had never sought to reclaim the grant of $250,000.
Van Dusen asked if, as President of Detroit 3D, did Bobby Ferguson not have the authority to sell the property on Meyers St.
Sauer answered that yes he was able to do it but "I would say it's unusual for a non-profit to withdraw funds and give them to its President."
But said Van Dusen you can't tell us it's illegal for him to do it. No responded Sauer.
Big news of the day was that the sleepy juror was tossed from the jury.
Right at the start of session, Judge Nancy Edmunds announced that juror #4 had been excused because "she had some issues being as attentive as she needed to be." She was replaced by an alternate.
Kelly Bartlett, former legislative liaison for the State Budget Office, testified about a phone call in the spring of 2001 from then-state rep. Kwame Kilpatrick.
Bartlett revealed that he was startled when Kilpatrick began the conversation with a tone of voice suggesting that he was in trouble.
"Kilpatrick said these organizations or these groups are getting nickeled and dimed by you people", said Bartlett. Kilpatrick was referring to Detroit 3D and Vanguard.
Bartlett also told the court of his concerns that Kwame's wife Carlita Kilpatrick was getting money from the grants. He even drafted a letter on the issue for the Attorney General's Office but it was never sent.
Stephen Oshinsky, former systems manager with SkyTel, also testified.
It was all about Emma Bell.
The former Kwame Kilpatrick fund-raiser never actually made it to court but her presence was certainly felt. In his cross-examination of IRS special agent Ron Sauer,Kwame Kilpatrick defense lawyer Jim Thomas did his utmost to discredit the government's co-operating witness, branding her just about everything out there: liar, criminal, snitch, gambler and alcoholic who stuffed money in her bra and mattress.
Bell plead guilty to tax evasion last year. She was sentenced to 18 months in jail but may see that amount reduced.
Earlier in his testimony, Sauer revealed that between 2003 and 2008, Bell received a total of $904,051.19 from four Kilpatrick-related entities including Kilpatrick for Mayor, the Next Vision Foundation, Kilpatrick Inaugural Committee and the Kilpatrick Civic Fund.
The government alleges that Bell kickbacked more than $250,000 to Kwame Kilpatrick, essentially paying him 50% on any amount greater than $5,000.
Bell had initially told investigators that she split anything over $25,000 with Kilpatrick because she didn't want Kwame to appear "petty" in splitting smaller amounts.
Thomas tried to poke holes in Bell's credibility by getting Sauer to admit she hadn't filed tax returns in possibly more than 20 years, kept bank account balances low to avoid triggering suspicion and had a drinking habit.
Oh, and possibly a little gambling problem too.
Greektown Casino records introduced into evidence by the defense indicated that Bell had a particular proclivity for the coin slots. In 2005, Bell gambled $170, 863 in coin slots and lost $15, 924. In 2006, she gambled $569, 868.34 and lost $39,276. In 2007, she gambled $788,950 ultimately losing $56,325 and in 2008, Bell gambled $803,022.29 and lost more than $82,000.
Thomas also dug into Sauer for not obtaining records from other casinos and for the defense's ability to uncover a further $42,000 paid out to Emma Bell in August 2003 that government investigators had failed to find. He also referred back to Sauer's grand jury testimony in 2010 where he told a juror "No, we haven't established a correlation between money Emma Bell received and payments made into Kwame's account."
Lastly, Thomas had Sauer read from one of his memorandums where he stated that "EB stored cashier's checks in her mattress or drawer".
As was widely anticipated, government witness Emma Bell testified in court. Bell told a rapt courtroom how she paid former Detroit mayor Kwame Kilpatrick kickbacks in his office from money stuffed in her bra.
Bell was the first cooperating witness to testify in the Kwame Kilpatrick federal corruption trial.
She plead guilty to tax evasion last year and signed a plea agreement with the government. Under sentencing guidelines, Bell is facing 18 to 24 months in prison but the government may opt to reduce that amount by half after her testimony.
Under questioning by U.S. Attorney Michael Bullotta, Bell recounted how she had met Bernard Kilpatrick and Carolyn Cheeks Kilpatrick and their family in the early 1970s through her involvement with the Shrine of the Black Madonna church.
Bell also revealed that her very first check for a Kilpatrick for Mayor fund-raising event was for $100,000.
Bullotta asked what the former mayor said when she thanked him for the payment.
"He said I was welcome and I'll see you later," said Bell. When pressed to say further by Bullotta, Bell said "He asked if I had something for him." By that, explained the witness, Kilpatrick meant that she should come back with money.
Bell then described how she would take money from a can under her bed which she would proceed to stuff in her bra or pockets.
"Hundreds mostly. Some fifties but mostly hundreds" were used to pad Bell's bra.
She would then visit Kilpatrick at his offices. Behind the closed doors of a side office, they would sit together in a barber chair and Bell would give him the money. On a series of some 18 visits, Bell testified that would typically hand Kwame between $8,000 and $10,000 a visit. From the first payment of $100,000, she said she gave him between $40,000 and $50,000
When asked how much in total she paid Kwame, Bell responded "I don't know the exact amount but I know it was more than $100,000. I know it was more than $200,000."
An incredulous Jim Thomas, Kwame Kilpatrick's defense lawyer, asked "Are you telling the jury you took money out of your bra in the mayor's office?"
"I would take money out of my bra in front of my son," responded Bell calmly. She then proceeded to lift her blouse slightly for Mr. Thomas in demonstration.
Thomas gained momentum in his questioning of the witness, taking her to task for possibly bending the truth to spare herself prison time and ultimately driving Bell to tears.
"There are only 2 people in this room other than God that know what happened. And that's me and Mr. Kilpatrick," said a teary Bell towards the end of her testimony.
Also, another juror, alternate #5, was excused from the jury. Now down to only 4 alternates.
There was a time warp in the courtroom today as jurors heard a younger Kwame Kilpatrick declare that he hadn't used a single penny from the Kilpatrick Civic Fund for his mayoral campaign.
The declaration was made during a mayoral debate between candidates Gil Hill and Kilpatrick which aired on October 28th 2001.
The video was introduced during the testimony of FBI agent Robert Beeckman.
The courtroom watched as a younger, baby-faced Kilpatrick was asked by panelist and Local 4's own Guy Gordon a question on campaign contributions.
"We haven't used one penny, ONE PENNY, of the Civic Fund on this campaign because it's not allowed by law."
The testimony of the next witness, however, revealed this statement may not have been true.
Daniel Gotoff, a survey and polling expert with Lake Partners Research, testified that his company was contracted in the spring of 2001 to conduct exploratory survey research for the Kwame Kilpatrick for Mayor Campaign. And he testified that they were paid for those services with checks from the Kilpatrick Civic Fund.
Three checks from the Kilpatrick Civic Fund to the then Lake Snell Perry & Associates were introduced into evidence by the prosecution. The checks were for $13,158, $8,872 and $14,000. They were all signed by former Kilpatrick Chief of Staff Christine Beatty and Kwame Kilpatrick himself.
Jim Thomas, defense lawyer for Kwame Kilpatrick, argued that under the revised articles of incorporation for the Civic Fund, there was no foul play as long as no specific reference was made to voting for Kilpatrick. Thomas also argued that the research findings exposed city issues which were central to the stipulations addressed in the Civic Fund incorporation agreement and thus ensured a benefit to the community at large.
U.S. Attorney Mark Chutkow swiftly re-directed by asking the witness if any of the survey findings would have been released to the public.
"No that would have been unusual because this type of information is proprietary to the campaign," responded Gotoff.
Earlier in the day, Angela Burris also testified. Burris was a driver for former fund-raiser Emma Bell. She told the court that she drove Bell to the former mayor's offices 10 or 12 times but that she never saw her give him any large amounts of cash. She also said that even though she took Bell to the casinos twice a week, she never had an inkling that she might have a gambling habit.
Court is in recess Monday for Columbus Day. Testimony resumes next Tuesday at 9AM.
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