Prosecutors moved onto the meat of the City Hall corruption case against Kwame Kilpatrick Thursday with a deep-pocketed businessman describing how he bankrolled the Detroit politician’s political ascent, and shopping sprees.
Orchard Lake businessman Jon Rutherford, a convicted felon, spent almost four hours describing how he gave money to the mayor’s campaign, nonprofit group, father and related groups. In all, prosecutors say he paid more than $500,000 in bribes to Kilpatrick and his father, Bernard Kilpatrick, to win support for a Detroit casino project.
Rutherford will face cross examination Friday and likely will face questions about his criminal record and plea deal with prosecutors.
He will be followed by a stream of multi-millionaire businessmen will say they were extorted by the ex-mayor and his co-defendants. Assistant U.S. Attorney Mark Chutkow said some businessmen feared they would lose contracts unless they shared millions in profits with Kilpatrick’s friend and co-defendant, Bobby Ferguson.
The focus on bribery and extortion marks a new chapter in the trial, which for about two weeks centered on Kilpatrick’s nonprofit group.
“This has gone from essentially shoplifting to strong-arming,” said Peter Henning, a Wayne State law professor and former federal prosecutor.
Defense lawyers are expected to attack the allegations as unrealistic. In some instances, the businessmen were too rich and powerful to fear Kilpatrick and Ferguson, defense lawyers will argue.
Indeed, the list of businessmen expected to testify during the trial includes Walbridge construction company executive John Rakolta, a national finance co-chair for Republican presidential candidate Mitt Romney. Rakolta’s firm is a recurring character in the Kilpatrick indictment, which refers to Walbridge as “Company W.”
Rakolta dropped out of an agreement to join businessmen Roger Penske, Daniel Gilbert, James Nicholson and Peter Karmanos Jr. in a $300,000 loan to ease Kilpatrick’s transition from public office after the ex-mayor’s release from jail in 2009.
In an earlier court filing, Kilpatrick’s co-defendant, former Detroit water boss Mercado, said Soave bribed the ex-mayor with private flights, $10,000 worth of court-side Detroit Pistons tickets and helped Christine Beatty lease a Land Rover.
Soave, who was CEO of a company called Inland Waters (“Company I” to the feds), has said he was extorted.
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A businessmen testified he gave more than $500,000 to Kwame Kilpatrick and his father in hopes of winning support for his casino proposal along the Detroit River.
The admission from convicted felon Jon Rutherford came after almost four hours of testimony in which Rutherford matter-of-factly described giving the ex-mayor cash and paying other benefits to his relatives and related groups.
Prosecutors called the payments bribes but Rutherford, who is cooperating with prosecutors, never used the word. And Rutherford never testified there was an explicit agreement for the mayor to take money in return for supporting his casino project.
“Were you paying this for something in return?” Assistant U.S. Attorney Mark Chutkow asked.
“I guess,” Rutherford said. “I wanted something in the end, yup.”
“Do you believe Mayor Kilpatrick understood why you were giving this money to him?” the prosecutor asked.
Defense lawyers objected to the question.
“Did Kwame Kilpatrick express his appreciation for your support?” Chutkow asked.
“Yes,” Rutherford said.
“Did Mayor Kilpatrick tell you he would do anything for you?” the prosecutor asked.
“No,” Rutherford said. “He liked the project. He would have backed the project on the riverfront.”
“Did you need access to the mayor?” Chutkow asked.
“For a project like that?” Rutherford said.”I couldn’t do it without him.”
Despite the payments, the casino project fizzled.
Convicted felon Jon Rutherford testified that along with cash given to Kwame Kilpatrick and his father, he also donated $5,000 to a nonprofit group headed by Kilpatrick’s sister.
Rutherford testified he bought $5,000 worth of tickets to a Halloween party fundraiser in October 2002 organized by the Next Vision Foundation, an organization run by Ayanna Kilpatrick Ferguson.
“Why?” Assistant U.S. Attorney Mark Chutkow asked.
“It was Kwame’s sister,” Rutherford said.
“Was it the family connection that caused you to” donate, the prosecutor asked.
“Absolutely,” Rutherford said.
Prosecutors allege Rutherford paid bribes to Kwame Kilpatrick and his father to win support for his casino proposal.
Prosecutors allege the $5,000 payment was prompted by a request from the mayor’s father, Bernard Kilpatrick.
But Thursday, Rutherford said the request might have come from the mayor or his sister.
Rutherford agreed to cooperate with prosecutors and pleaded guilty to a five-year felony tax charge in December 2009.
The City Hall corruption indictment alleges Rutherford paid Kilpatrick and his father Bernard Kilpatrick more than $500,000 in return for the former mayor’s support of a waterfront casino Rutherford was backing.
The 63-year-old Orchard Lake resident is scheduled to report to prison in January to serve a 21-month sentence.
But he hopes to spend less time behind bars based on his testimony in the City Hall corruption case.
“Of course, wouldn’t you?” Rutherford said. “I guess you plan for the worst and hope for the best.”
Jon Rutherford hired Kwame Kilpatrick’s father shortly after the 2001 mayoral election, a relationship prosecutors allege bought powerful support for the businessman’s casino project.
Rutherford, who bankrolled the victory and was pursuing business in the city, said he was approached by someone asking if he’d like to hire Bernard Kilpatrick.
The price: $10,000 a month.
“Were you willing to pay that?” Assistant U.S. Attorney Mark Chutkow asked.
“Absolutely. I’m a businessman in the city,” Rutherford said. “Would you like to have the mayor’s father working for you? I thought it was a good deal for me.”
In all, prosecutors allege Rutherford paid the mayor’s father more than $130,000 for consulting services between June 2002 and March 2003.
Bernard Kilpatrick did almost nothing for the money, prosecutors allege.
The payments allegedly were part of a bribery scheme to win support from the mayor and his father for a casino development along the Detroit River.
“Did you need him?” Chutkow asked.
“Did I need him? Not particularly,” Rutherford said.
“Why hire him?” the prosecutor asked.
“Number 1, it’s the mayor’s father,” Rutherford said. “Number 2, you never know when you might need somebody.”
Bernard Kilpatrick left his job in Wayne County government and set up a consulting firm, Maestro Associates, after his son was elected in November 2001.
From a 2010 profile of Bernard Kilpatrick:
(Political consultant Larry) Mongo said the name of Bernard Kilpatrick’s consulting firm, Maestro Associates, conjures images of a puppet master who capitalized on the office his son held from 2002-08. As soon as Kwame Kilpatrick was elected, his father’s persona changed, and he began wearing furs, big hats and diamond Rolex watches, Mongo said.
“For the first time in his life, he was the boss,” Mongo said. “Think about it. What is a maestro?”
Kwame Kilpatrick tapped a businessman and campaign donor for $10,000 in May 2002 so he could buy suits before traveling to Dubai, according to testimony Thursday.
Businessman Jon Rutherford said the request came during a fundraiser at the Detroit Athletic Club for the mayor’s mom, Carolyn Cheeks Kilpatrick.
The fundraiser was one day before Kilpatrick traveled to Dubai to foster relations with Detroit.
“Did he ask for it or did you come up with it?” Assistant U.S. Attorney Mark Chutkow asked Rutherford.
“He had the figure in mind,” Rutherford said. “He knew how much he needed.”
“So he asked for $10,000?” the prosecutor asked.
“Yes,” Rutherford said.
“What was your response?” the prosecutor said.
“He’s my guy,” Rutherford said. “I said ‘I’ll take care of you, I’ll do it.’”
Rutherford said he had the cash delivered to Detroit Metropolitan Airport the next day before Kilpatrick’s flight.
The alleged payment was part of a bribery scheme to win Kilpatrick’s support for Rutherford’s casino proposal, prosecutors allege.
Rutherford reached a plea deal with prosecutors and agreed to testify against the former mayor in exchange for a lower sentence. Depending on his testimony, Rutherford could get a reduction in his 21-month prison sentence.
That cooperation was fleeting, however.
“Did you think it was proper to give money to the mayor of the city of Detroit?” Chutkow asked.
“Um, I didn’t really think it was that bad of a thing to do,” Rutherford said.
“You were looking for a casino, weren’t you?” Chutkow asked.
“No,” Rutherford said, countering a key allegation in the indictment.
Kilpatrick never repaid the $10,000, Rutherford said.
Later, Rutherford said he gave Kilpatrick about $5,000 to the mayor during a restaurant meeting at the Green Valley Ranch Resort in Las Vegas.
“Why?” the prosecutor asked.
“Because he asked for it,” Rutherford said.
Convicted felon Jon Rutherford testified he gave tickets to Kwame Kilpatrick to a heavyweight boxing match between Lennox Lewis and Hasim Rahman days after the young politician’s mayoral victory in 2001.
The testimony backs up the government’s allegation that Rutherford spent $2,400 on tickets for Kilpatrick and his father for tickets to the fight at the Mandalay Bay Resort & Casino.
The tickets were part of a bribery scheme to win Kilpatrick’s support for Rutherford’s casino proposal, prosecutors allege.
The tickets were $1,200 apiece. He also bought a ticket for Curtis Hertel, former speaker of the Michigan House of Representatives, Rutherford testified.
Rutherford said he gave the tickets to Bernard Kilpatrick inside a casino bar.
The parties’ fight plans fizzled, Rutherford said.
Darci McConnell, at the time a Detroit News reporter, stuck a tape recorder in front of Kwame Kilpatrick and asked if Rutherford paid for the Las Vegas trip, Rutherford said.
She also left several messages on Rutherford’s voicemail and eventually woke up the businessman’s wife.
After the phone calls, the traveling party freaked out, Rutherford said.
“Curtis Hertel got so upset he fell over his chair,” Rutherford testified. “Everyone scattered. Everyone left.”
“Why did they all scatter,” Assistant U.S. Attorney Mark Chutkow asked.
“I didn’t,” Rutherford. “I went to the fight.”
Convicted felon Jon Rutherford testified he dodged campaign-finance laws by giving $84,000 to Kwame Kilpatrick’s nonprofit group and political action group to bankroll his 2001 mayoral run.
“Why not write (the checks) to his campaign?” Assistant U.S. Attorney Mark Chutkow asked.
“I couldn’t have written a $20,000 check to his campaign,” the homeless shelter operator said.
“Why not,” the prosecutor asked.
“At the time, it wasn’t in the rules — campaign laws,” Rutherford said.
Prosecutors allege Rutherford paid more than $500,000 in bribes to Kilpatrick and his father to win support for a casino proposal.
Rutherford donated money to the Kilpatrick Civic Fund, which prosecutors say was the mayor’s slush fund and the Next Generation Detroit political-action committee.
Chutkow asked about a $30,000 check Rutherford wrote to the Civic Fund in July 2001.
“Why did you write the check?” the prosecutor asked.
“Uh, Kwame Kilpatrick needed it,” Rutherford said.
The donations were revealed in a front-page Detroit Free Press story in 2001, causing a scandal, Rutherford said.
“Did you ever give to the Civic Fund after the article?” Chutkow asked.
“I don’t think so,” Rutherford said.
But he wrote a $3,000 check to the Kilpatrick for Mayor campaign in October 2001 and checks totaling $97,275 to the Community Coalition in the days ahead of the November 2001 mayoral election.
“It was to get Kwame Kilpatrick elected mayor of the city of Detroit,” Rutherford said.
He also said he gave a $20,000 check to Bernard Kilpatrick, which was cashed at a grocery store. The money was supposedly to pay poll workers and cover campaign expenses.
Rutherford said he helped get Kilpatrick elected in 2001.
“How?” Chutkow asked.
“All those checks you saw,” Rutherford said, chortling.
A key government witness against Kwame Kilpatrick testified he gave $100,000 to a Democratic Party political-action committee to bankroll the Detroit politician’s ascent.
Jon Rutherford said his firm DPR Management gave $100,000 to the 21st Century Fund in 2000 with two conditions.
“Number 1, that Kwame Kilpatrick would get to distribute the money and that if the Democrats won the state House, that Kwame Kilpatrick would be the speaker. If they lost, that he would be the floor leader.”
The Democrats lost but Kilpatrick became the party’s floor leader.
Prosecutors allege Kilpatrick and his father Bernard Kilpatrick solicited and received more than $500,000 from Rutherford, who sought a casino license.
The testimony is illuminating backroom dealings that helped fuel Kilpatrick’s rise in the state House.
From the indictment:
In or about October 2000, Rutherford gave $23,000 to a television and radio political analyst to support KWAME KlLPATRICK’s mayoral campaign.
Rutherford identified the analyst as Tatum Eason.
“He was a person that comes out of the woodwork in Detroit around election time and does things,” Rutherford testified.
Eason died in 2008.
A key witness against Kwame Kilpatrick said his business fizzled after news broke about a donation to the ex-mayor’s nonprofit group.
Jon Rutherford, a former homeless shelter operator who is awaiting a federal prison sentence, told jurors about the donation in approximately 2000.
Rutherford said Metro Emergency Services’ business fizzled after reports surfaced about a donation to the Kilpatrick Civic Fund.
“After that, nobody would renew my funding,” Rutherford said. “Basically, I lost that business.”
The 63-year-old Orchard Lake resident’s testimony marks a new chapter in the Kilpatrick corruption case as prosecutors focus on alleged extortion by the ex-mayor and others.
Rutherford told jurors he was introduced to Kilpatrick by Curtis Hertel, former speaker of the Michigan House of Representatives.
“I was very impressed with his intelligence, his ability to interact with people, his drive,” Rutherford said. “I thought the world of him.”
Today, he’s testifying against Kilpatrick in hopes of getting a shorter prison term.
The City Hall corruption indictment alleges Rutherford paid Kilpatrick and his father, Bernard Kilpatrick, more than $500,000 in return for the former mayor’s support of a waterfront casino Rutherford was backing.
Despite the payments, the casino never materialized.
A New York lawyer who represents Detroit pension funds testified his law firm gave $30,000 to Kwame Kilpatrick’s nonprofit group funneled through a controversial Michigan attorney.
Max Berger testified his firm sent checks benefiting the Kilpatrick Civic Fund to Ronald Zajac, the general counsel for Detroit pension funds.
Berger was solicited by Greektown mogul Jim Papas, who has been a recurring figure in testimony so far.
Zajac, meanwhile, made a cameo in a federal indictment against Kilpatrick’s fraternity brother and ex-Detroit Treasurer Jeff Beasley. Zajac, was suspended with pay in March amid allegations he solicited cash gifts for Beasley and pension fund members before he received a 33 percent pay increase.
Berger is a surprise last witness talking about the mayor’s nonprofit group — and allegedly illegal expenses and activities — before prosecutors move onto extortion allegations against Kilpatrick.
U.S. District Judge Nancy Edmunds is a hardcore Detroit Tigers fan. She wears a Tigers pin on her black robe and had tickets to the rained-out game last night.
“Did you buy beers for two-and-a-half hours thinking the game would be delayed?” Kilpatrick attorney James C. Thomas asked her.
“I was lucky,” the judge said. “The tickets were in a suite so somebody else bought the beer.”
Court watchers figured after four weeks, the Kwame Kilpatrick trial would be bogged down, boring and prompting jurors to chug NoDoz by the fistful.
Gotta say, the trial’s been fascinating so far — with three months to go. Even the IRS agents are compelling.
Here’s the Top Five trial memories so far.
2. Over-the-shoulder kickback holders.
4. Singer R. Kelly’s jewelry salesman.
5. Spy-gadget guy.