Day 16: Detroit businessman showered Kilpatrick and dad with cash, boxing tickets

DETROIT (WXYZ) - Earlier today, 7 Action News Investigator Ross Jones blogged from the Kilpatrick corruption trial.  Follow along below: 

1:05--Enough for the day: Well, I'd say that was a pretty compelling day of testimony.  How's about you?  Thanks for joining us today.  Mr. Rutherford's testimony continues tomorrow morning.  I expect the defense may have a thing or two to say about it.

1:03--Boom: "If Kwame Kilpatrick was not the mayor, would you have given him this money?" asked Chutkow.

"No," Rutherford responded.

Would he have given it to his father Bernard, he asked.

"Nope," Rutherford said.  He was paying this money because he "wanted something in the end" and couldn't do the project without the mayor's help.

12:51--His indictment: Chutkow is asking Rutherford about his indictment from a few years back, including tax charges.  He pled guilty to tax evasion, and was sentenced to 21 months in prison--3 months less than the maximum charge.  His sentence could be reduced even further, depending on his testimony here. 

Chutkow is surely trying to blunt what he will soon hear from the defense: that Rutherford is only testifying to get a lesser sentence.  Chutkow suggests he received a reduction because he agreed to share information with the government about others.

Rutherford says he has not been promised a lighter sentence for his testimony. 

12:48--Yearly earnings: Rutherford says he made at least $650,000 a year from all of his businesses, plus money he received from the state for providing care to needy men and women.

12:44--Kilpatrick goes to Vegas: Rutherford arranged a meeting between Kilpatrick a casino magnate Sheldon Adelson--right now the 12th richest person in America--about the possibility of Rutherford building a casino in Detroit.

Rutherford's grand vision for a new casino in Detroit, however, never panned out.

12:40--Greektown: Rutherford clearly had Kilpatrick's attention.  When he held meetings about possibly buying Greektown Casino, Kilpatrick sent top aide Derrick Miller to sit-in on them. Miller even traveled with Rutherford to Las Vegas to meet with major gaming officials. 

12:34--More checks: Who knew that running a homeless shelter was such a lucrative business?  Rutherford wrote checks to everyone and their sister-- in this case, Kilpatrick's sister.  He cut Ayanna Kilpatrick's non-profit "Next Vision Foundation" a $5,000 check for a Halloween Party in 2002.

Now that, my friends, is a nice Halloween treat.

12:30--Why did you hire him?  Chutkow asked Rutherford exactly why he hired the mayor's father and paid him such a hefty salary.

"Number one, he's the mayor's father," he said bluntly.

"Number two, you never know when you might need something," he said.

Rutherford also said he could not recall any work product that Bernard Kilpatrick provided him.

12:29--10 checks: The jury is currently being shown 10 checks made out to "Maestro," the consulting company founded by Bernard Kilpatrick in the days after his son became elected mayor, from Rutherford's company.  The checks amounted to more than $113,000. 

"Bernard wouldn't have had to ask me for the checks.  I had the checks ready," Rutherford said.

12:17--Blunt testimony: Describing Bernard Kilpatrick as a "bureaucrat," Rutherford says that it's really government bureaucrats that "get things done" in the city and are even more key to rely on than elected officials.

12:15--Costly consultant: And what was Bernard's fee?  $10,000 a month, Rutherford testified.  Asst. U.S. Attorney Mark Chutkow asked Rutherford if the price was right for him.

"I'm a businessman in the City of Detroit," Rutherford said.

"Wouldn't you like to have the mayor's father working for you? I  thought it was a good deal for me," he said.

12:10--Hiring Bernard as a consultant: Rutherford says he received a call from a "mutual friend" (Cassandra Smith Gray) who asked him if he'd be interested in hiring the mayor's father Bernard as a consultant.

Sorry for the delay in blogging.  Had to run outside and update our 7 Action News at Noon viewers.

11:50--Never repaid: Rutherford never asked Kilpatrick to repay him, and he says Kilpatrick never offered. He said the mayor was receptive to his idea to develop some of Detroit's riverfront.

11:41--"You're my guy" When Kilpatrick needed $10,000 to buy fancy suits for a trip to Dubai, he turned to Rutherford, he says.

"You're my guy," Rutherford says he responded. "I'll take care of you."

11:32--Wanted it for free: Rutherford says he was hoping that the city would throw in some of the land it owned along the East Riverfront "for free."  He spoke with Kilpatrick about his hopes to redevelop the land, saying that such a huge project required the mayor.

11:27--Drinks interrupted: Rutherford, Bernard Kilpatrick, Curtis Hertel Art Blackwell were enjoying drinks in a Las Vegas bar when they got a call that a newspaper reporter had confronted Kwame Kilpatrick in Las Vegas, asking him if Rutherford paid for his trip.

"Everyone scattered," Rutherford said, saying that Hertel went running and "tripped over a chair.'

I hope they paid for the drinks first.

11:23--Mandalay Bay: Rutherford spent $7,200 on tickets to see a title fight at the Mandalay Bay Hotel in Las Vegas. Tickets were bought for Rutherford, his wife, Curtis Hertel, Kwame Kilpatrick and Bernard Kilpatrick.  The tickets were $1200 each. 

11:21--More than 50 times: Rutherford ultimately settled on an idea to build a casino along the riverfront, and met with members of Kilpatrick's cabinet more than 50 times. 

11:12--"Always had an interest" Rutherford says he wanted to help develop a prime piece of property along the Detroit River, even before he helped Kilpatrick get elected mayor.

"I always had an interest in the East Riverfront," he said, saying he considered developing it into restaurants, bars or entertainment.

He acknowledged that to get a project like that done, he'd need help from city officials.

11:09--Kwame's reaction: Generally, Rutherford says, Kilpatrick "was pleased with the help that I gave."  He says he saw Kilpatrick briefly the night he was elected mayor at a party he was throwing at the Renaissance Center. 

"I spoke with him," he says, noting that Kilpatrick picked his son up, then moved on. 

11:07--Bernard called: And a few days later, while he was at a funeral, Rutherford says he got a call from Kilpatrick's father and co-defendant Bernard, who told him he "needed more money."  Rutherford thinks he gave another $20,000, but isn't sure. 

11:06--$97k more: Through a series of checks, Rutherford says he gave the non-profit Community Coalition $97,000 in donations that, he says, would also go to help Kilpatrick become elected mayor. 

11:00--Christine comes in: 2 days after a newspaper article questioned Rutherford's $50,000 in donations to the Civic Fund, the mayor's friend Christine Beatty walked into Rutherford's office and "flipped" a piece of paper on his desk, then walked out without saying a word.

It was a copy of the Civic Fund's bylaws, Rutherford said.

10:58--More money: And he gave more: lots more. Rutherford gave $34,000 to Kilpatrick political action committee, and his company gave $30,000 to the Civic Fund--again, he says, at Kilpatrick's request for his campaign.

"Kwame Kilpatrick needed it," he said, "Needed it for his campaign."

10:53--Used for campaign: Rutherford says that Kilpatrick told him he would use the $20,000 check to the Civic Fund for his campaign for Detroit mayor.  This is a seismic piece of testimony, folks. 

10:50--The check: In court, they call it exhibit #7...but we know it as the check that started it all.  The jury was just shown a $20,000 check written to the Kilpatrick Civic Fund in April 2001, from Rutherford's company "Rutherford and Associates."  He says he wrote it at Kilpatrick's request, and made it out to the Civic Fund because a $20,000 donation to Kilpatrick's campaign would be an illegal contribution ($3,400 is the limit).

"He never asked for my advice," Rutherford said.

"What did he ask you for?" asked Assistant U.S. Attorney Mark Chutkow.

"Money," he said.

10:47--Check for support: Rutherford says he paid $18,000 to political consultant Tatum Eason, who he hired to help Democratic candidates get elected in the state house. 

10:42--Strings attached: In exchange for his $100,000 donations, Rutherford says he had two requirements: that Kilpatrick hand out the money, and that he become House Speaker if the Democrats win a majority in the House, or House Minority Leader if they become the minority.

10:39--Another check: Rutherford is explaining another $50,000 check that he gave to the Democratic PAC, the 21st Century Club.  Like the previous $50,000, Rutherford says he was told this $50,000 would be controlled by Rep. Kwame Kilpatrick, who would hand it out to democratic candidates up for re-election.

10:34--Snack time! As we wait on a break to finish up here in the courtroom, defendant Bobby Ferguson appears to have snuck in some contraband: trail mix.  Food is expressly prohibited in the courtroom...but the good news for Ferguson is that he seems to have devoured all of the evidence.  Talk about the perfect crime.

10:23--Short break: Stay with us.

10:12--Kilpatrick shakes head no: As Judge Nancy Edmunds listens to arguments from the prosecution and defense on whether to move forward with Rutherford's "state of mind" testimony, the former mayor is writing notes feverishly that he's handing to his lawyer as he shakes his head in disagreement. 

10:06--Check to Dems: Rutherford is talking about a $50,000 donation he made to the 21st Century Fund in September 2000, at the request of then House Speaker Curtis Hertel.  The fund is a political action committee (PAC) that supported Michigan Democrats.  Rutherford said it was his understanding that Kilpatrick would control the $50,000. 

But the defense has objected, saying that Rutherford's understanding of who would control is hearsay; how can we be confident that his perception is based in fact?  The judge is listening to arguments from both sides on whether this testimony can continue.

10:01--Rutherford meets Kilpatrick: Rutherford was introduced to Kwame Kilpatrick while he was still a state legislator in Lansing. 

"I was very impressed with his intelligence, his ability to interact with people, his drive," Rutherford said.

"I thought the world of him."

9:54--Rutherford: The government's key witness is telling the jury about how he built his company, Metro Emergency Services, from "nothing" to a $38 million operation, providing healthcare for 450 women and children a day from its offices in Highland Park. But after a newspaper article in 2001 disclosed his $50,000 donation to Kilpatrick's fund, he says his business began to crumble. 

9:45--Here we go: Welcome to Chapter 2.  Government witness Jon Rutherford has entered the witness box, signaling the start of the government's extortion case.  It was a $50,000  Civic Fund donation that Rutherford made in 2001 that caught the eye of the IRS, and triggered an almost decade-long investigation into Kilpatrick and others that led us to this courtroom.

9:36--Cost of doing business: Thomas is trying to use Berger's own business experience to make an argument that non-profits (like businesses) have to spend money to raise money.  In other words, staying at fancy resorts and buying expensive golf clubs are okay as long as they help yield some donations. 

Think a jury will buy it? 

9:19--Standard donations: Kilpatrick lawyer Jim Thomas is asking Berger if his law firm often made donations to non-profits.  Berger said it did.

Thomas seems to be arguing that corporate donations are made not only to fulfill a civic duty, but because they can help leave a good impression with government officials they're doing business with.

"It gives your office exposure to the people who are engaged with the City of Detroit," Thomas suggested. 

9:12--Upset donor: Talking about his company's donations to the non-profit, Berger sounds like he has some buyer's remorse.

"I believed the contributions were being made to benefit the citizens of Detroit and would be used for both civic and educational purposes," he said.

Would he have a problem with the Civic Fund spending money on things like campaign expenses?

"I absolutely believed they would not be used for personal purposes," Berger said.

9:09--$20k more: No wonder the Civic Fund was so flush with cash.  Donors who gave big often gave big again.  Berger says he followed up his company's initial $10,000 donation by sending another...and then another. 

9:04--$10,000: Berger's company gave a $10,000 donation to the Civic Fund after learning about the non-profit's mission.  He sent the check to Ron Zajac, the lawyer for the city's pension board. 

"We were explicitly told that the Civic Fund was for the benefit of the City of Detroit," Berger said.

9:02--Max Berger: The final witness on the Civic Fund is Max Berger, a lawyer who did business with the city's pension fund and was solicited by the non-profit in 2006. 

9:00--One more witness: Well, we were misled yesterday.  Turns out we'll hear from one more witness on the Kilpatrick Civic Fund this morning, and then the trial will shift to allegations of extortion under the Kilpatrick administration. 

8:57--Tie tally: Another day, another necktie around the former mayor's neck.  Necktie: 13, bow tie: 4. 

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