Ex-Detroit Mayor Kwame Kilpatrick is charged with fraud, bribery, tax crimes and racketeering conspiracy. His father, Bernard Kilpatrick and Detroit contractor Bobby Ferguson are also on trial in Detroit federal court.
Trial Update by Vickie Thomas
January 7 – January 11, 2013
On day 49 of the trial Monday one of the government’s star witnesses took the stand. Derrick Miller was one of the original defendants in the case but he accepted a plea deal in 2011 and began cooperating with the government.
Miller testified that he and Kwame Kilpatrick met in 9th grade English class at Cass Technical High School. Miller worked for Kilpatrick when he was a state lawmaker. When Kilpatrick became mayor, Miller served as the chief administrative officer and then the chief information officer.
Under direct examination by Assistant U.S. Attorney Mark Chutkow Monday, Miller testified that money from the Kilpatrick civic fund was illegally used to pay for his 2001.
Miller also said Kilpatrick told him to go pick up $10,000 in cash for the campaign from Cobo Hall contractor Karl Kado. Miller says he knew you were not supposed to accept cash for the campaign. He picked it up at Cobo and took the money back to the campaign office and gave it to Kilpatrick or Christine Beatty. The money was in 100 dollar bills, he said.
Miller says Kado was always offering cash and he accepted $10,000 from him in 100 dollar bills. He didn’t think it was appropriate but also accepted a second 10,000 bribe. Miller says he didn’t share that money with anyone else.
Miller also testified that he took money from Kado to deliver to Kwame Kilpatrick once or twice. He says Kilpatrick would tell him to go see Kado and pick up the package. He would go to Cobo. Kado handed him about $5,000 to $10,000 in cash. He then took the money back to city hall and gave it to Kilpatrick.
A text message from Bernard Kilpatrick directs Miller to call the director of Cobo to give the okay for contracts to be awarded to Kado.
Miller also admitted that he steered a real estate management contract to Jones, Lang and LaSalle. He testified that he received cash payments that represented a third of the commission his friend received from the deal. He said he accepted payments more than 10 times and gave Kwame Kilpatrick half of the cash kickbacks.
Miller also testified that meetings were held frequently with Mayor Kilpatrick, Bernard Kilpatrick, contractor Bobby Ferguson and sometimes Art Blackwell. Miller says the sit downs dealt with finding business opportunities for Bernard Kilpatrick and Booby Ferguson.
On another subject, Chutkow asked Miller, “Did the mayor ever express concern about wire taps?” Miller responded that there were several sweeps for wires and bugs on the entire 11th floor and more often in the mayor’s office.
Chutkow displays a Kilpatrick civic fund check for $1,397 made payable to spy ops on 10-15-07.
Miller said sometimes they would turn the music up loud when talking in the mayor’s office or at the Manoogian Mansion and that Kilpatrick, as a general rule, warned him to be careful talking on the phone.
Another text message shows Bobby Ferguson asking Kilpatrick about hiring a private investigator to, “find out who’s doing what to us. Chris (Christine Beatty) and Derrick (Miller) shouldn’t know a damn thing about it.”
On day 50 of testimony Tuesday, the direct examination continued with Derrick Miller testifying about the benefits of what many called, “ The friends and family plan” during the Kilpatrick era.
Miller testified that after Ayanna Benson, a relative of Bernard Kilpatrick became head of the Detroit Building
Authority and Christine Beatty became chairperson of DBA board, contracts for the mayor’s buddy Bobby Ferguson became a priority. There were several contracts at Cobo that Ferguson was involved with as a result.
Miller testified that other demolition contractors like John Adamo and Mike Farrow came to him complaining about their working drying up. A July 21, 2004 text message from Ferguson to Kwame Kilpatrick displayed on the screen reads:
“Hey don’t let Zeke (Derrick Miller) let Adamo in…we can’t trust them and they bad mouthing all of us.”
Miller also detailed some water department contracts that were steered to Ferguson or held up if contractors didn’t want to go along with the plan. Miller says he was directed to meet with Tom Hardiman of Lakeshore Engineering and to listen and be vague. Hardiman was concerned about contract and his negative relationship with Ferguson. Chutkow asked Miller what he did at the meeting and He replied, “I listened and I was vague.”
Even the mayor’s own sister, Ayanna Kilpatrick complained to Miller after she found out that Ferguson wanted in on a slug hauling contracted tied to the controversial Synagro deal. Her consulting company had two clients who wanted the contract. Here’s the text message she sent Miller on June 8, 2004:
Ayanna Kilpatrick – “Here we go with this Bobby bull again! Tardiff cancelled mtg with my guys today. Can we make a $ too? Okay if it’s room for him but not if he’s holding us up.”
Derrick Miller – “Damn!”
The trial takes a one day break on Wednesday.
Day 51 on Thursday was Derrick Miller’s third day on the witness stand and he delivered some knockout blows for the prosecution but he also spilled the beans on himself. He says he introduced Detroit businessman Robert Shumake to Matt Cullen who at the time headed up Real Estate for General Motors. Miller and Cullen served as co-chairs of The Detroit Riverfront Conservancy.
The introduction, Miller testified, led to Shumake brokering a deal to buy GM real estate and then leasing it back to the financially strapped automaker. Miller admitted that he put in a good word on behalf of Shumake with members of the Detroit pension board including then city treasurer Jeff Beasley and Kilpatrick aide DeDan Milton. The board approved funding for Shumake’s deal and Miller pocketed $568,000 which he failed to report as income on his taxes. Miller testified that he had left city government at the time of the payoff.
Next, Miller testified that he met Dominick Pangborn and Andrew Park, the owners of the failed Asian Village restaurant. In addition to helping get pension fund financing for the restaurant. Miller says he helped them get a homeland security grant to put up security cameras downtown and also helped Miller says he took a $10,000 cash kickback as a result the deal. He also said that Kwame Kilpatrick asked him to get some cash from, “his Asian Village guys.” Miller says he delivered that cash to Kilpatrick in the men’s room of the restaurant. Kilpatrick frowned during that testimony and quietly said, “Wow.”
Kilpatrick’s attorney Jim Thomas began his cross examination of Miller. Thomas quizzed the mayor’s high school buddy about Kilpatrick’s political aspirations. Miller says Kilpatrick was also considering going after the position of Lt. Governor and he also tossed around the idea for running for mayor of Detroit. Miller said however that he can’t remember it being specifically with Jennifer Granholm.
Miller reiterated his earlier testimony that the polling paid for by the Kilpatrick Civic Fund was for the purpose of running for mayor. Thomas then asked Miller, “Is it plausible that the issues uncovered would be useful for civic fund purposes? He finally admits that could have been the case.
Thomas got Miller to admit that he hid his relationship with Robert Shumake from Matt Cullen. But, Miller said, at that time, he had no expectation of making money on the real estate deal. He says after he left the Kilpatrick administration, he told Shumake he wanted a commission. Miller says he asked the corporation counsel before he left if there was a cooling off period before he could enter into such a transaction and was told no there was not.
Under intense and at times contentious questioning by Thomas, Miller had a brief lapse of memory, forgetting the testimony he gave that morning in which he admitted that he lobbied pension board members on behalf of Shumake.
The $50-million-dollar deal closed on Dec 21, 2007. Miller says he negotiated a commission of one percent.
On day 52 of the trial, Derrick Miller faced more tough questions about his plea deal. Thomas asked, “Did they tell you were in trouble?” Miller responded, “They told me they were collecting evidence and I was under investigation for accepting cash in exchange for influence.” He was indicted in December of 2010.
Miller met with federal investigators five times before he was charged and admits that he did not tell the whole true, especially he said when it came to Kwame Kilpatrick. Miller signed the plea agreement on August of 2011.
Thomas moved on to questions about the cash kickbacks Miller said he picked up from Cobo Hall contractor Karl Kado and delivered to Kilpatrick. Miller couldn’t remember how the money was packaged and specific dates he collected those payoffs.
Miller then had to face more questions about his commission from businessman Robert Shumake. The two, Miller admitted got into a physical confrontation about the money.
Miller also admitted that he set up Atrium Financial to avoid letting people know he received the commission. He said he didn’t want the pension fund board to know he was involved and he talked to an attorney, Shekha Hamilton. He wanted her to be associated with the company instead of using his own name.
He also admitted that he typed it up a fake promissory note in an effort to submit information to the government. He said he didn’t want anyone to know the money went back to his other company, Citivest. Thomas got Miller to say it was a document to misled, misinform and lie to the government. The defense attorney fired away, “You got a lawyer to doctor this document and send it to the federal government.” Miller said yes.
As it related to the cash kickback he delivered to Kilpatrick from Andrew Park at Asian Village restaurant, Thomas asked, “You’re saying you took the mayor with his executive protection unit to a place with security cameras to give him $10,000. Miller replies, “Yes.”
homas fires back, “There’s no one else to corroborate that?” “No”, Miller responds.
Miller admitted that he hopes to go home to his family as a result of his testimony in the case but he knows it’s up to Judge Nancy Edmunds who will sentence him. Thomas asked Miller, “You knew you were looking at a basketball score as a sentence?” Miller was faces over 168 months in prison on a racketeering charge which has now been dropped. He faces up to 10 years now as a result of his cooperation.
Thomas asked, “You knew from the outset what the government was looking to hear from your testimony?” Miller said, “Yes.”
Quote of the Week: Kwame Kilpatrick’s attorney Jim Thomas on cross examination of Derrick Miller on the feds closing in on him:
“You knew there was a train coming down the track and it was coming at you?”
Up Next: Miller faces more cross examination Monday from Bobby Ferguson’s attorney Gerald Evelyn.