Mo' Money, Mo' Problems For Detroit's Disgraced Ex-Mayor

By Steven Gray / Detroit
Nearly six years ago, then Detroit mayor Kwame Kilpatrick was one of the most sought-after figures at the Democratic National Convention in Boston. This afternoon, Kilpatrick is making his second appearance in a downtown Detroit courtroom to explain why he can't pay the nearly $1 million that he promised taxpayers to resolve a sordid case that effectively ended his political career.
Kilpatrick's fall from grace was fast and hard. In September 2008, the youngest mayor in Detroit's history pled guilty to obstruction of justice and assaulting a police officer. He was sentenced to six months in prison. According to the terms of his probation, Kilpatrick resigned, pledged never again to run for elected office, and surrendered his public pensions and law license. He also agreed to pay Wayne County, Mich., which includes Detroit, a restitution of nearly $1 million.
So far, Kilpatrick has paid about $90,000 of that sum. But despite having a $120,000-year job in Dallas with a subsidiary of Compuware, the billion-dollar software company based in Detroit, Kilpatrick now claims he cannot afford to meet the payment terms of his probation agreement. (Never mind his family's rented suburban mansion and flashy cars.)
Kilpatrick's story is, by any measure, tragic. He was born into one of Michigan's powerful political families: His mother, Carolyn Cheeks Kilpatrick, was until recently chairwoman of the Congressional Black Caucus. Tall and brawny, he played football at historically black Florida A&M University, studied law, and rose quickly as a young representative in Michigan's legislature. By 2001, he was elected Detroit's mayor at age 31, partly by energizing this city's disaffected youth. His flashy suits, diamond-stud earrings and inaugural "club crawls" proclaimed his comfort with the nickname: "America's first hip hop mayor."

Initially, Kilpatrick maintained the confidence of Detroit's business establishment, extending many of the economic development projects launched by his predecessor, Dennis Archer Sr. Kilpatrick moved thousands off Detroit's bloated job rolls and reduced property taxes to sustain what was left of Detroit's middle class. But Kilpatrick's personal excesses quickly overshadowed his professional success. In 2007, a jury awarded $8.5 million to two Detroit police officers who alleged they were essentially dismissed for investigating concerns about Kilpatrick and his bodyguards' efforts to conceal his extramarital affairs. Then came a text-messaging scandal that revealed Kilpatrick and his chief of staff, Christine Beatty, had lied under oath about a sexual relationship that apparently had existed since their days at Detroit's elite Cass Tech High School.

Predictably, when Kilpatrick arrived for his first restitution hearing last month, it was a circus: He posed, briefly, for the spectators and gaggle of television cameras assembled in the courtroom. He was noticeably muted, wearing a gray coat, black pants. No earrings. Over nearly three hours, he was grilled by the lead prosecutor, Athina Siringas, and the judge, David Groner, on what should be fairly ordinary matters: Does your wife leave the house each morning to work? Shockingly, Kilpatrick said he didn't know. Judge Groner then asked, "Who's paying the rent?" Kilpatrick responded with a simple, "Um," and then looked to his attorneys, Michael Schwartz and Daniel Hajji. "I assume my wife is paying the rent ... because I'm not." (See pictures of the remains of Detroit.)
Kilpatrick's attorneys tried to block the line of questioning, arguing that the former mayor, not his wife, must resolve his debts. One of their central arguments is that Kilpatrick's plea agreement allows the restitution to be adjusted to reflect 30% of his gross monthly income. Nevertheless, the exchange showed why it's hard to believe anything he says.

Perhaps the most surprising revelation during last month's hearing was that four of Michigan's wealthiest men — including Compuware CEO Peter Karmanos Jr., auto retailer Roger Penske, and Quicken Loans chairman Dan Gilbert — had given a total of nearly $240,000 in loans to Kilpatrick around the time he left prison. Precisely how the money was used is unclear. The executives swiftly issued statements nearly identical in tone to explain their actions. "We were concerned about the city's inability to move forward due to the situation and circumstances that had surrounded Mayor Kilpatrick and his administration," Gilbert's statement read. The statement of Karmanos, Kilpatrick's boss, read: "We wanted to help care for his family until he could get back on his feet. At this time the loans remain outstanding."

It's hard to say precisely what to expect at today's hearing. Kilpatrick's saga has upended various aspects of Michigan's political and business life. His departure effectively set the stage for the arrival of Dave Bing, the former NBA star and steel magnate, who was elected to a full four-year mayoral term earlier this month. That a majority of Detroit's incoming city council will be fresh faces — including one of the police officials who triggered Kilpatrick's departure — can be viewed on a referendum on the former mayor's regime.

Meanwhile, federal authorities are investigating other aspects of Kilpatrick's alleged activities. Respected lawyers hired to deal with Kilpatrick's mess are now fighting for their own careers. "I put my family through an incredible year of tremendous pain," Kilpatrick told reporters last month, clearly seeking sympathy. America loves a story of redemption. But Kilpatrick's constant excess, and view that somehow he is above the law, makes absolution a difficult sell.
UPDATES:

KILPATRICK TO RETURN TO MOTOR CITY FOR MORE QUESTIONING

Ex-Mayor Kwame Kilpatrick is to return to Detroit as a hearing continues on his personal finances and a request to have his $6,000 monthly restitution to the city halved. Tuesday's hearing is in Wayne County Circuit Court. Prosecutors last month questioned Kilpatrick on $240,000 in loans he received from four of Detroit's most prominent businessmen following his Feb. 3 jail release. Another businessman also gave his wife and sons a $50,000 gift while Kilpatrick was jailed as part of pleas to two criminal cases stemming from a text-messaging sex scandal. Prosecutors contend that Kilpatrick has not been truthful about how much money he has. He resigned as mayor in September 2008. He now works as a salesman for a company in Texas.

EX-MAYOR FORGOT TO TELL COURT ABOUT EXTRAVAGANT PURCHASES

Kilpatrick didn't tell court about Harley, $150K

Detroit -- During his restitution hearing this afternoon, ex-Detroit Mayor Kwame Kilpatrick admitted he did not disclose to the court that he has a Harley-Davidson motorcycle and a $150,000 loan that he received just after he got out of jail in February.

Kilpatrick is back in the witness seat this hour taking questions about his personal finances. His testimony is part of a session that began on Oct. 29 in a Wayne County courtroom, where Kilpatrick testified he has little knowledge of his finances because he has turned them over to his wife, Carlita Kilpatrick.

Assistant Prosecutor Athina Siringas claimed early in the hearing that Kilpatrick has "hidden" assets and she later said he did not tell the court about a Harley-Davidson motorcycle.

"He's never made full disclosure to the court," Siringas said.

Kilpatrick, when asked about another loan, refused to answer, asserting his right to the Fifth Amendment. "I'm going to take the Fifth," he said.

Also, before the testimony resumed today, his lawyer, Michael Alan Schwartz, complained that information about Kilpatrick's bank accounts has been leaked and someone recently tried to obtain credit cards in Kilpatrick's name, prompting his accounts to be frozen.

Wayne County Circuit Judge David Groner ordered Kilpatrick back from his Texas home on claims that he willfully violated terms of his probation by failing to provide complete answers about his wealth and by cutting in half his $6,000 monthly contributions toward $1 million in restitution as part of a plea deal that included jail time and his resignation as Detroit mayor.

Kilpatrick made another $3,000 payment on Nov. 6 instead of the $6,000 required, according to the Michigan Department of Corrections Probation Department. That's three months in a row Kilpatrick has paid at the reduced rate his lawyer says he was entitled to claim because his paychecks have been reduced.

The prosecution contends Kilpatrick had no right to reduce his payments. Prosecutors also say more than $1 million flowed through Kilpatrick family accounts last year, while Kilpatrick claimed he had only $6 a month left for restitution payments after expenses for living in Southlake, Texas. Kilpatrick said Carlita Kilpatrick leased a Cadillac Escalade and $1 million home in the town described as the most affluent community in America.

A prosecutor expressed surprise when Kilpatrick said he didn't even know if his wife has a job.

Schwartz later explained Kilpatrick remains "in the dog house" with his wife and is in a delicate position when it comes to demanding answers about how the family finances are run.

The prosecutor could call Carlita Kilpatrick as a witness because rules for a probation violation hearing are different than at trials, but that's unlikely, said Cooley Law School Professor Curt Benson.

"His tactic now is to deny any knowledge," said Benson. "He doesn't have a shred of credibility anymore, but that doesn't matter. After the prosecution asks him some more questions, they will go about the less exciting task of showing where the money came from and where it went.

"The reality is Kwame Kilpatrick is now a sideshow. This is now about collecting the money, and the reality will be found buried in the bank records and transactions."