Thursday recap: Derrick Miller talks about $10K kickback to Kilpatrick

Witness Derrick Miller continues cooperation with federal prosecutors, gives more damaging testimony against ex-Detroit mayor Kwame Kilpatrick

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Kwame Kilpatrick waved to cameras Thursday as he walked outside federal court in Detroit.

DETROIT - Star witness Derrick "Zeke" Miller gave the jury in the Kwame Kilpatrick federal corruption trial plenty to visualize about when he testified to handing the former Detroit mayor a $10,000 kickback in the bathroom stalls of a failed downtown restaurant venture.

It was the third day on the stand for Miller who is a cooperating witness for the government. The former Kilpatrick confidant has pleaded guilty to violation of a federally funded program and tax evasion. His potential prison sentence is up to 10 years but he could get less than that for his cooperation in this case.

Miller wrapped up three days of direct testimony by describing some Detroit business deals he helped broker. He also described the money that filtered his way for his help on those deals.

More: Kwame Kilpatrick trial: Day 51

The first of those deals occurred when Miller introduced Southfield businessman Robert Shumake to Matt Cullen, formerly general manager of economic development and enterprise services for General Motors (GM), who sat on the board of directors of the Detroit RiverFront Conservancy with the witness. At the time, Shumake was interested in putting together a portfolio of real estate assets and there was an opportunity to buy some manufacturing facilities from GM. Shumake also wanted some financing from city pension funds to go towards the purchase of 10 to 13 properties. For his help in facilitating the transactions, Miller received a handsome commission of $568,000 from Shumake. The witness said he pleaded guilty to not disclosing the more than half a million dollars in his tax returns and is currently cooperating with the Internal Revenue Services (IRS) on the subject.

Miller also talked about his dealings with local businessmen Andrew Park, who was sentenced last October to a year in jail for tax evasion, and Dominic Pangborn. The businessmen were looking to expand one of their ventures, Digital 10 Networks, through a $4 million Homeland Security grant which Miller had a hand in securing. Miller also helped Park and Pangborn gain financing from the city pension funds for their Asian Village restaurant venture which was adjacent to the Renaissance Center. For his help on the projects, Park paid Miller $10,000 in 2007. Miller admitted on the stand that he didn't think it was appropriate to take the money.

But he wasn't the only recipient of Park's cash gifts. The witness testified that Kilpatrick asked Miller if he could get him some cash.

"Could you get it from your Asian Village guys?", is how the former mayor put it according to Miller.

The witness said he picked up the cash at Asian Village and thought that Park gave it to him in an envelope of hundred dollar bills. Miller then called Kilpatrick to let him know he had his cash. When Kilpatrick arrived, Miller said the two men went into the restaurant bathroom and he handed the mayor $10,000 in cash.

U.S. Attorney Mark Chutkow asked Miller what Kilpatrick said when he gave him the money.

"'Cool.' Something like that," said Miller.

The defense team finally got a shot at Miller after listening to him testify for more than two days. John Shea, Bernard Kilpatrick's lawyer, was the first defense attorney to question Miller. Shea noted that as a consultant, Bernard had clients who were interested in doing business with the city and state. Shea listed several other consultants who operated similarly: Conrad Mallett, Jim Stapleton, Curtis Hertel and Edna Bell, who like Bernard is a former County Commissioner.

Shea also pointed out that despite his city government connections, Bernard couldn't always get his clients what they wanted. Homeless shelter operator Jon Rutherford never got his waterfront casino and businessman Karl Kado didn't get his Cobo Center contracts renewed. Just like any other consultant, said Shea, Bernard had to take his lumps when his clients' wishes weren't achieved with the city of Detroit.

Jim Thomas, Kwame's lawyer, was next to take a stab at the witness.

Thomas directed Miller to take a look at the articles of incorporation for the Kilpatrick Civic Fund. The original articles from a July 1999 application for tax exempt status clearly stated that "the corporation shall not participate in or intervene in any political campaign on behalf or against any candidate." However, said Thomas, these articles were restated on July 26th 2001, right around the time that Kilpatrick was first running for Detroit mayor. And the prohibition of getting involved in political activities had clearly been removed in the new articles. So, Thomas elaborated, the Civic Fund could be used for political purposes as long as it was not candidate-specific and thus a payment of $14,000 to polling research company Lake Snell Perry for focus groups on July 30th was wholly appropriate.

"I don't know about that," said Miller.

Interestingly, under questioning from Thomas, Miller revealed that before running for Detroit mayor Kilpatrick had explored being Lieutenant Governor of Michigan.

Thomas also pointed out a seeming contradiction in Miller's testimony. The defense lawyer referred back to an August 29th 2001 newspaper article that exposed Jon Rutherford's homeless shelter donating $50,000 to the Kilpatrick Civic Fund. In his direct testimony, Miller had told the court that he, Kilpatrick and other leadership team members had decided that they should not disclose Civic Fund donors after the story came out. But then Miller seemed to change his mind.

"Wait a minute, now I remember," said Miller.

Miller then agreed with Thomas that the list of donors had been disclosed before the story was actually printed.

Thomas also challenged the witness's state of mind. The defense lawyer emphasized the city's state of disarray when Kilpatrick took office and how Miller as part of the administration was bogged down with everything they had to handle.

"Didn't the stress give you emotional and physical problems?" Thomas asked a perplexed Miller.

"Did you gain weight?" asked Thomas. Miller conceded that he did.

Thomas continued, "And did you lose your hair?"

To which the witness with a visibly full hairline replied, "No."

Court resumes at 9 a.m. Friday.

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