Jurors heard about former Detroit Mayor Kwame Kilpatrick’s Cadillac cravings and threats allegedly made by his father to kill a $1.2 billion sludge deal and enrich a relative.
The revelations emerged during FBI informant James Rosendall’s third day on the witness stand.
Jurors also heard several secretly recorded phone calls between Bernard Kilpatrick and his girlfriend during which the two discussed the sludge deal and used profanity to express frustration over being owed money.
Testimony resumes at 9 a.m. Wednesday in federal court.
The government is expected to rest its case soon, perhaps as early as this week.
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From left, Keith Dalgleish, Doug Dalgleish Sr., Charles Dalgleish Jr. and Doug Dalgleish Jr. were not happy with having to close their dealership. (David Guralnick / The Detroit News)
The car dealer who supplied Kwame Kilpatrick with a fleet of expensive Cadillacs testified Tuesday he was paid with a check from the mayor’s nonprofit group and a large stack of cash.
Kwame Kilpatrick’s nonprofit group leased a Cadillac DeVille for the future Detroit mayor in 2000, an expense prosecutors allege defrauded donors of the Kilpatrick Civic Fund.
Prosecutors allege Kilpatrick schemed to defraud donors to the Kilpatrick Civic Fund by spending money on a host of personal expenses, including golf clubs, resort trips, and the brand new Cadillac.
Cadillac dealer Doug Dalgleish Jr. testified Tuesday that Kilpatrick leased a DeVille in March 2000, when Kilpatrick was a state lawmaker. The DeVille’s monthly payment was $728.
Christine Beatty
Kilpatrick paid a $2,000 down payment using a check from the Kilpatrick Civic Fund, which prosecutors allege the ex-mayor treated like his personal piggy bank.
The check was co-signed by Kilpatrick’s mistress, Christine Beatty.
From the indictment:
“It was part of the scheme and artifice to defraud that KWAME KILPATRICK would claim to the Internal Revenue Service, the public and potential donors that the Civic Fund was a social welfare organization that spent its funds in ways consistent with the purposes stated in its application for tax exempt status.”
“You don’t know why the vehicle was being purchased or how it was used,” defense lawyer James C. Thomas said. “It could have been a business purpose or a personal purpose, but you just don’t know.”
“Correct,” Dalgleish said.
Dalgleish’s family operated Detroit’s last Cadillac dealership, which was shuttered during General Motors Corp.’s bankruptcy and restructuring.
He testified Kilpatrick also leased a $35,000 red Cadillac Escalade in 2009 — days after the former Detroit mayor finished serving a jail sentence stemming from the text-message scandal.
“Were there some extras that came with this vehicle?” Assistant U.S. Attorney Eric Doeh asked.
Kwame Kilpatrick
“Yes, there were some custom tires and wheels, there was some other chrome accessories on the exterior: chrome tow hooks and chrome vents,” Dalgleish said.
Kilpatrick paid in a creative way.
He paid, in part, with $9,000 cash and a $4,000 cashier’s check in February 2009, the dealer said.
The $4,000 check was from the mayor’s mom, former Congresswoman Carolyn Cheeks Kilpatrick.
The cash included a stack of $100 bills — 79 in total, Dalgleish said.
Days later, Kilpatrick brought in two other checks. One cashier’s check was for $16,000 and one totaled $6,459.
Bobby Ferguson
Prosecutors allege Kilpatrick had access to large amounts of cash that went beyond his mayoral salary and got cash from contractors, including co-defendant Bobby Ferguson.
The source of the cash used to lease the Escalade is a mystery.
Kilpatrick’s lawyer didn’t offer an explanation but suggested Kilpatrick had money after being hired as a salesman with an affiliate of Detroit-based Compuware.
Dalgleish admitted he didn’t know if the money was a gift or if Kilpatrick borrowed the cash.
Dalgleish was required to report the cash payments to the IRS. The government requires dealers to submit the form whenever a customer pays with at least $10,000 in cash or checks.
He notified the IRS, as required, in late 2009.
The IRS form includes a box that can be checked when the dealer believes the sale was suspicious.
“The box is not checked off,” Thomas said to the dealer.
“Correct,” Dalgleish said.
“There was nothing unusual about this transaction,” the lawyer said.
“Correct,” the dealer said.
Bernard Kilpatrick, left, and Kwame Kilpatrick.
Kwame Kilpatrick was too preoccupied with fallout from the text-message scandal in early 2008, his lawyer said, to stall a $1.2 billion deal involving a company that wasn’t paying large enough kickbacks to the mayor’s father.
The potential alibi surfaced Tuesday after jurors heard intercepted phone calls between the mayor’s father and girlfriend in January 2008. During the calls, Bernard Kilpatrick mulled having his son kill a sludge deal with Synagro Technologies Inc.
Bernard Kilpatrick and his girlfriend talked about steering the deal to a company headed by a relative, and splitting the profits.
“It’s a ludicrous suggestion that Mr. Kilpatrick, in the middle of the text-message scandal, and all the other problems he’s got, would come back on this contract for the benefit of somebody,” defense lawyer James C. Thomas said to FBI Special Agent Robert Beeckman.
“For the benefit of his father, I don’t think it’s ludicrous at all,” Beeckman said.
Kilpatrick’s lawyer emphasized for the jury that the FBI did not wiretap the former Detroit mayor’s phone.
James C. Thomas
The FBI did tap Bernard Kilpatrick’s phone.
“About Bernard’s wiretap, were there any conversations (with Kwame Kilpatrick) relating to the Synagro contract?” Thomas asked.
“No,” the FBI agent said.
“Not one?” Thomas asked.
“No,” Beeckman said.
“Not a whisper, not a vague reference and not a direct reference?” Thomas asked.
“No,” the agent said.
Bernard Kilpatrick
The FBI intercepted phone calls in early 2008 allegedly showing Bernard Kilpatrick scheming with his girlfriend to strip a $1.2 billion sludge contract from a company and give it to his son-in-law.
Kilpatrick and girlfriend Akunna Olumba were overheard talking about the sludge contract with Synagro Technologies Inc. Kilpatrick was upset about not receiving money from Synagro executive James Rosendall, according to testimony.
Daniel Ferguson
During one call, Kilpatrick and Olumba discussed giving the contract to a sham minority firm headed by Kilpatrick’s son-in-law, Daniel Ferguson, according to testimony.
Bernard Kilpatrick was upset about not getting money from the Synagro businessman and threatened to have his son, Mayor Kwame Kilpatrick, kill the deal, according to testimony.
“This s— is so, so, so screwy,” Bernard Kilpatrick said during the phone call on Jan. 31, 2008. “I am so close to going to my man and telling him to kill it.”
Kilpatrick’s girlfriend suggested rebidding the contract, awarding it to a firm called Waste Management and saying sayonara to Synagro, according to the wiretapped conversation.
“We don’t want to see y’all no more, thanks,” Olumba said.
Olumba suggested Kilpatrick could pocket $20,000 a month if the sludge deal went to another company.
“Boom,” Olumba told Kilpatrick.
During the conversation, Kilpatrick said Rosendall had “f—– up”
“I’m so close to saying f— them,” Kilpatrick said.
Tony Soave
Kilpatrick allegedly told Rosendall he would blow up the sludge deal unless he received money.
“I think I scared him,” Kilpatrick said during the January 2008 phone call.
Kilpatrick and his girlfriend talked about giving a piece of the deal to a trucking company and Daniel Ferguson.
“You be the minority on the deal — 40 percent or something,” Kilpatrick told his girlfriend.
Olumba suggested the contract also could be awarded to Grosse Pointe Farms tycoon Tony Soave.
Soave testified earlier, saying he was extorted by Kwame Kilpatrick.
Soave sold his garbage-hauling company for $750 million to Waste Management, the firm Olumba suggested could receive the Synagro contract.
Bernard Kilpatrick
Bernard Kilpatrick threatened to pull the plug on a $1.2 billion sludge deal unless a businessman came up with cash for his girlfriend’s company, according to a wiretapped conversation.
Jurors heard a wiretapped phone call between Kilpatrick and his girlfriend, Akunna Olumba in December 2007.
During the call, which was being recorded by the FBI, Kilpatrick bragged that Synagro Technologies Inc. executive James Rosendall was going to send money after the mayor’s dad threatened to “pull the plug” on the sludge deal.
“And he’s like ah, hell no,” Olumba said. “That’s a lot of work down the drain.”
Akunna Olumba
Rosendall had told Kilpatrick that Synagro would wire money to Olumba’s company.
It was a lie. Rosendall was stringing Kilpatrick along, according to testimony.
“Why didn’t you just say to Bernard Kilpatrick ‘we can’t do any deal, you are the mayor’s father, it doesn’t look right?’” Assistant U.S. Attorney Michael Bullotta asked Rosendall.
“I probably should have said that,” Rosendall said.
“Is there any reason why you didn’t just blow him off?” Bullotta asked.
“I didn’t want him to stop the deal,” Rosendall said.
Bernard Kilpatrick considered creating a trucking firm to take advantage of a proposed $1.2 billion sludge deal, according to testimony this morning.
FBI special agent Bob Beeckman said agents intercepted phone calls in 2007 in which Kilpatrick and Akunna Olumba, his former girlfriend and business partner, talked about creating the firm and putting it in the name of Daniel Ferguson.
He’s a cousin of Bobby Ferguson, a contractor who is facing corruption charges along with Bernard Kilpatrick and Kwame Kilpatrick. His wife is Ayanna Kilpatrick, the former mayor’s sister.
Beeckman said Bernard Kilpatrick talked about the trucking deal and hiding the ownership in Daniel Ferguson’s name.
James R. Rosendall, Jr., the former Synagro Technoligies exec who testified against the Kilpatricks since last week, testified this morning that he felt Bernard Kilpatrick was considering the trucking deal to make more money off the deal.
Bernard Kilpatrick was slated to get as much as $3.8 million from the deal if it went through.
Bernard Kilpatrick and lawyer John Shea outside federal court.
FBI informant James Rosendall said he’s used to hiring consultants, but not one like Bernard Kilpatrick.
Prosecutors tried to shore up Rosendall’s testimony about being shaken down by ex-Mayor Kwame Kilpatrick’s father for money and a piece of a $1.2 billion sludge-hauling deal.
The questioning touched on several of the unseemly allegations to emerge during Rosendall’s three days on the witness stand.
James Rosendall
Rosendall, a former Synagro Technologies Inc. executive, said he felt forced by the mayor to hire Bernard Kilpatrick while pursuing the deal in 2007.
His dealings with Bernard Kilpatrick were unusual and atypical from his dealings with other political consultants, Rosendall said
“Did any ever threaten to go to a public official and threaten to blow up the contract?” Assistant U.S. Attorney Michael Bullotta asked.
“No,” Rosendall said.
“Did you ever feel the need to buy a case of Cristal to pacify them?” the prosecutor asked.
“No,” Rosendall said.
“Did you ever feel the need to make payments to them concealed in gum wrappers?” Bullotta asked.
“No,” Rosendall said.
“Did you ever feel the need to hide payments to them in the name of another company?” Bullotta asked.
“No,” Rosendall said.
“Would you have ever worked with Bernard and paid him money if the mayor hadn’t told you to work with him?” Bullotta asked.
“No,” Rosendall said.
Bernard Kilpatrick
Bernard Kilpatrick wasn’t broke in December 2007 when he sought cash from FBI informant James Rosendall.
Prosecutors showed jurors bank records indicating Kilpatrick deposited $37,500 into his consulting firm’s bank account within days surrounding the Dec. 20, 2007, meeting with Rosendall in a parking lot.
Kilpatrick’s lawyer on Friday claimed his client was broke and being lied to by Rosendall about payments surrounding a $1.2 billion sludge-hauling deal.
Assistant U.S. Attorney Michael Bullotta
The day after the meeting, Bernard Kilpatrick’s company received $25,000 from the Kilpatrick for Mayor campaign, according to testimony.
“If you had known that, would that have affected your feeling sorry for Bernard Kilpatrick?” Assistant U.S. Attorney Michael Bullotta asked Rosendall.
“Absolutely,” Rosendall said.
Kilpatrick and his son, former Mayor Kwame Kilpatrick, allegedly shook down Rosendall for at least $100,000 in cash, trips and entertainment in exchange for supporting the Synagro sludge deal, according to prosecutors.
Lawyer John Shea and Bernard Kilpatrick outside federal court.
A prominent Lansing law firm told Synagro Technologies to stay away from Bernard Kilpatrick while trying to win approval of a $1.2 billion city contract.
Synagro didn’t listen, according to testimony Tuesday.
FBI informant and former Synagro executive James Rosendall said the unnamed law firm weighed in on hiring Kilpatrick to push for approval of a sludge-hauling contract.
There was an ethical concern about Synagro working with the father of Detroit Mayor Kwame Kilpatrick.
“They said it was a gray area,” Rosendall testified.
“But they certainly didn’t say it was illegal, they said it was a gray area,” Bernard Kilpatrick’s lawyer John Shea said.
“I think the discussion was they felt that it was a very gray area and the recommendation was to stay away from it,” Rosendall said.
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