Businessman says Kwame Kilpatrick and father held him "hostage" with cash demands

(WXYZ) - A key government witness in the Kilpatrick corruption case told the jury Monday that he felt like he was a hostage, having to pay off Detroit's former mayor and his father.

Karl Kado was one of the earliest targets of the federal probe – and a major cooperator for the government.

On Monday, Kado detailed hundreds of thousands of dollars that he says he paid to Kwame and Bernard Kilpatrick.

"All is well," said Bernard Kilpatrick on his way in to federal court Monday morning. But inside, the former mayor's father had to sit through hours of recordings that the FBI made of his conversations with this man.

Karl Kado used to have lucrative contracts at Cobo Center for electrical and cleaning services, and Kado also ran several stores and sundries shops in Detroit.

Kwame Kilpatrick, his father Bernard, and his friend Bobby Ferguson are on trial, accused of extorting city contractors and running a criminal enterprise.

The 72-year-old testified that shortly after Kilpatrick became mayor in 2002, Kilpatrick called Kado and said, "We need $10,000."  Kado said former Kilpatrick aide Derrick Miller came to Cobo to pick up cash in a brown paper bag. Federal prosecutors say between 2001 and 2002, Kado gave Kilpatrick at least $80,000 in cash.

Kado kept telling the jury that he felt like he would lose his city contracts if he didn't pay up – saying, "I'm like a hostage.. I'm hostage at Cobo."

Federal prosecutors say Kado paid more than $250,000 to Bernard Kilpatrick because he was scared of losing his city business – including one cash payment of $100,000 Kado says was for Kwame Kilpatrick's re-election campaign.  Kado testified he footed the bill for $85,000 in lotto tickets for Bernard.  Kado also said he leased Bernard office space in one of his buildings on Jefferson – and Bernard only paid for a couple of months of rent.

Kado started cooperating with the FBI back in 2005 – even wearing a recording device for two meetings with Bernard Kilpatrick.  

During one meeting at Tom's Oyster Bar downtown, Kado said the city owed him millions in outstanding bills – and federal prosecutors allege Bernard Kilpatrick threatened to keep those bills from being paid unless he got a 10% cut.

In one recording, Kado says, "$1.6 Million – I give you $160,000.  Check or cash?"
Bernard responds: "Check… And you don't tell no one."

Bernard Kilpatrick's attorney says wait to get the full story with the cross-examination.

"I'm not going to comment on the quality of the recordings, or his ability to recollect or any of that stuff – that's why you have two sides examine witnesses," said John Shea.

Kado also secretly recorded conversations with former Cobo Center directors Lou Pavledes and Glen Blanton.  Kado says he gave cash to both of them.  Pavledes pleaded guilty to concealing a bribe, and Blanton pleaded guilty to obstruction of justice.

Kado had to pay hundreds of thousands of dollars in fines, and is currently on probation as part of his own plea deal for a tax charge.

Shea also got Kado to admit he was paying off Cobo bosses long before Kwame Kilpatrick was elected mayor, which the defense will likely continue to focus on as they continue to cross-examine Kado on Tuesday.

Federal prosecutors are also expected to introduce text messages to back up some parts of Kado's testimony.

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