DETROIT (WWJ) - Some have called it the “friends and family” plan and, on Thursday, federal prosecutors in the corruption trial of ex-Detroit Mayor Kwame Kilpatrick and three others started outlining the money trail that started when Kilpatrick was in the state legislature.
Former Senate Majority Leader Dan DeGrow and former State Budget Director Mary Lannoye were among those testifying about two arts and culture grants that then-Democratic House Leader Kwame Kilpatrick pushed through the process.
A $500,000 grant went to a nonprofit set up by co-defendant Bobby Ferguson which prosecutors say he used to refurbish his office. One of his attorneys, however, said it was to be used for a training center.
A second grant addressed in court Thursday went to Vanguard Community Development Corporation, founded by Bishop Edgar Van.
The organization’s executive director at the time, Donna Williams, testified that, shortly after receiving the $300,000 grant, she was introduced by Vann to Kilpatrick’s wife, Carlita Kilpatrick, and told that she was being hired as a contractor at $75,000.
“I didn’t like the circumstances of the hire, but I did like Carlita,” Williams said.
Williams testified that Carlita Kilpatrick ended up receiving half of the requested cash, $37,500, although she didn’t complete the work that she had promised. Williams testified that Mrs. Kilpatrick attended about a dozen meetings and created a brochure, but did nothing else.
Lannoye testified that red flags went up in Lansing when it was discovered that the grant that was supposed to bring arts and culture to a Detroit neighborhood wound up benefiting Kilpatrick’s wife.
Lannoye said she would not have authorized the grant if she’d known.”It gives the appearance of impropriety when the money is going directly to a legislator’s wife,” Lannoye told jurors.
Lannoye said she was upset and angry about it, but when she later met with Kwame Kilpatrick to discuss the matter he insisted that he didn’t do anything wrong.
Defense attorneys pointed out that there were no real guidelines for administering the grants at the time. In cross-examination Lannoye conceded that such funding matters may be unethical but not illegal.
Kilpatrick is charged with fraud, bribery, tax crimes and a racketeering conspiracy. His father, Bernard Kilpatrick, Detroit contractor Bobby Ferguson and the city’s former water boss Victor Mercado are also on trial in Detroit federal court.
The Kilpatricks are accused of shaking down contractors who wanted business or favors from Detroit city hall. The government calls it the “Kilpatrick enterprise.”
All four defendants have pleaded not guilty to charges of racketeering, bribery and extortion. Kilpatrick was mayor until fall 2008 when he resigned in the unrelated text-messaging scandal.
The trial is expected to last four months, stretching into 2013.