BLOG: Kilpatrick's ex-pal Derrick Miller says he gave mayor $10k payoff in restaurant bathroom

DETROIT (WXYZ) - Follow the very latest in the Kwame Kilpatrick corruption trial as 7 Action News Investigator Ross Jones blogs from federal court:

12:52--That's all: We're done for the day, folks.  Thanks for joining us.  See you tomorrow.

12:35--Tough job: Thomas says that that Miller's job with the city was a difficult one, and said that he understood Miller gained weight and lost some hair at one point as a result of the stress.  Miller resists agreeing.  Thomas says that he, Kilpatrick and Christine Beatty began their time together as "highly principled" people.

Miller agreed to that.

12:15--Moving on: Perhaps sensing that he was making little progress with Miller on the Civic Fund front, Thomas is moving on to the issue of businessman Jon Rutherford, who testified that he lavished Kilpatrick gifts and cash at the same time he was seeking a riverfront casino.

Thomas points out that the casino never materialized, and Miller agrees.

12:05--Tough sledding: It's not been an easy cross-examination for Thomas so far.  Miller has not been combative, but he has resisted agreeing with many of Thomas's suggestions.  Judge Edmunds has called for a five minute break.  Stay with us.

11:58--Re-write: Thomas says that, after the re-written language, the Civic Fund spent money to conduct research for political purposes, which was allowable.  It was still not candidate-specific, Thomas says. 

Other witnesses have testified that the research was for Kilpatrick's campaign. Miller was just one of them.

"The Civic Fund polling was done for the purposes of running for Mayor," Miller said.

11:43--Added language: In July 2001, with the Mayoral campaign just months away, the Kilpatrick Civic Fund broadened its purpose to include providing "information to Michigan residents about legislative issues affecting their lives."  Miller signed the document that made this change.

The candidate-specific prohibition is still in place.

11:34--Consultant: Thomas is asking Miller if political consultant Bob Berg, who was paid by the Civic Fund for his consulting, was working on behalf of Kilpatrick from a campaign standpoint and the Civic Fund.  You might remember that Berg was hired to help handle a negative story that came out around election time relating to the Civic Fund. 

Miller hesitates to agree with Thomas. Berg, when he testified months ago, said he was paid for work he was doing for Kilpatrick's campaign.

"Our focus was totally on the campaign," Berg testified.

11:28--Politics okay: Thomas is asking Miller if it's his understanding that 501c4 corporations, like the Kilpatrick Civic Fund, are allowed to spend money on political causes so long as they're not candidate specific (i.e., an ad that says a politician wants to raise your taxes; call them and tell them what you think).

Miller is taking his time in answering. 

11:20--Purpose: Thomas is going through the Civic Fund's purposes.  We've heard about these at least a half-dozen times, but just for those who aren't devout blog reads, they include: promoting community activities that enhance neighborhoods, informing residents about legislative issues and helping Detroit's image.

Right now, Thomas seems most concerned with the bullet point about legislative issues.

"An informed public is something that would benefit and go toward the well-being of the community," Thomas says.

"Yes," Miller says.

Remember: several individuals have testified that the Civic Fund paid for political research.  Thomas, though, contends that that research was to the benefit of the city's residents.  He said that it told Kilpatrick what citizens were most concerned about.  The prosecution maintains that much, if not all of the research was for the benefit of Kilpatrick's political career. 

Earlier, Miller testified that Kilpatrick lied when he said on television that the Civic Fund didn't pay for campaign expenses.

11:13--Moving on: After some objections from the prosecution, Thomas is not pivoting to questions about the Kilpatrick Civic Fund.

11:00--Deal making: We're back, and Thomas is continuing to focus on those state grants.  At a meeting with other top lawmakers and Gov. Engler's representatives, Thomas suggests that it was announced that the Governor had a surplus of funds he planned to hand out curry favor with legislators who wouldn't otherwise support his budget.  These funds would be used as grants to go to various lawmakers' districts. 

Miller acknowledges that Engler had some money to hand out.

10:40--Calm, so far: While we're on break, I'll offer some observations.  Thomas's cross-examination of Miller has been cordial so far, with neither men raising their voice.  Thomas doesn't do it often, and Miller hasn't done it while he's been testifying. 

Expect, though, that that will change.  The defense wants to raise some very serious doubts about Miller's credibility, and things should get at least somewhat tense. Gerald Evelyn is likely to conduct the cross-examination for Bobby Ferguson; he is typically very statesmanlike, even with witnesses he deems as threatening.

John Shea, whose cross-examination is already done, was his usual calm self. 

10:30--Short break: Time for our morning break, folks. Stay with us.  My bet is that Jim Thomas will be up for the remainder of the day, and into tomorrow as well.  There's a lot for him to get through.

10:24--Other grants: Thomas says that Kilpatrick didn't just advocate for grants that ultimately helped his wife and friend.  He also sought grants for a group called New Detroit, Trillium Performing Arts Center, Detroit 300, the Arab-American group A.C.C.E.S.S., the Michigan Opera Theater and other groups.

Miller said he remembers Kilpatrick advocating for some of those grants, but not all.

10:21--Horse trading: Thomas says that a great deal of "horse trading" takes place in politics to get things done and, as he's said before, the whole legislative process is a lot like making sausage. Miller agrees.  With that in mind, Thomas suggests that the grants Kilpatrick advocated for (which later went to pay Bobby Ferguson and Carlita Kilpatrick) may have been needed in order to get other Democrats to agree with then Governor Englier's budget at the time.

10:17--Good old days: Thomas reminds Miller of a trip he and Kilpatrick made to Gladwin County for a pig roast as the two were traveling the state, supporting other state Democrats. 

In a trip to the Upper Peninsula, Kilpatrick was well-received by the Yoopers, Thomas says. 

10:07--Carlita: The questions have now turned to the ex-mayor's wife Carlita Kilpatrick.  Thomas asked if Miller knew that she was skilled in conflict resolution and peer mediation (remember: she received state grant money steered by Kilpatrick to perform this kind of work).  Miller says he knew she was skilled in those areas.

10:06--Better job: Thomas says that the job with the Congresswoman was a step up from his previous jobs: tutoring children and giving massages (no, he was not massaging children).  Miller said he was happy regardless of where he worked.

10:03--Close-knit: Thomas points out that Miller, Kwame Kilpatrick and Christine Beatty were all very close in high school.  In fact, Thomas says, Miller accidentally broke a window in Carolyn Cheeks Kilpatrick's home, and Beatty was so concerned about Miller that she followed him home.  To this day, Thomas says, Cheeks Kilpatrick wants Miller to fix that broken window.

Years later, Miller would go on to work for Congresswoman Cheeks Kilpatrick in Washington, D.C.

10:01--Thomas up: Jim Thomas, an avid reader of the blog, is up now to cross-examine Miller.

9:58--Blow back: Miller had to deal with a lot of complaints from consultants who felt that their clients were unfairly dealt with, Shea suggests.  Miller acknowledges that that happened, and Shea says it was "part of the territory" as an aide to the mayor.

In other words: when Bernard Kilpatrick was reaching out to Miller or others inside the administration about clients of his not getting city business, it wasn't because his son was mayor: it was because was a consultant and that's what consultants do on behalf of their clients.

With that, Shea is done with his cross-examination.

9:54--Hits and misses: Shea points out that not all consultants are always successful, which Miller also agrees with.  Businessmen Jon Rutherford and Karl Kado were both clients of Kilpatrick's, and neither got everything they wanted from the city while they employed Bernard Kilpatrick, Shea says.

9:48--Consultant: Shea is now discussing Bernard Kilpatrick's role as a consultant.  Any good consultant, Shea says, needs to have a good relationship with his clients and the elected officials they hope to work with.

Fmr. Supreme Court Justice Conrad Mallett later became a consultant, Shea says, as did other former public officials. 

9:45--Involved Dad: Shea says that Bernard Kilpatrick wasn't just involved closely with his son Kwame, but also the mayor's two sisters.  Again, Miller agreed.

"This was a close family, and close families have regular contact," Shea said.

As Shea cross-examines Miller, Bernard Kilaptrick is leaning back in his chair with his hands clasped under his chin, staring forward.

9:42--Shea up first: Bernard Kilpatrick's defense lawyer John Shea is first to cross-examine Miller.  He points out that the Kilpatricks are very close, and it would be impossible for Bernard Kilpatrick not to be closely involved in his son's campaigns and administration, given his history in Detroit.  Miller agrees.

9:36--Cash for Kilpatrick: Miller says that before he left the City of Detroit, Kilpatrick asked him to get money for him from the Asian Village partners.

"Can you get it from your Asian Village guys?" Miller says Kilpatrick asked.

Miller said Park gave him $10,000.  Later on, Miller says he met Kilpatrick in a bathroom at Asian Village.

"And then what happened?" Chutkow asked.

"I gave him the money," Miller said.

"What did he say?" Chutkow asked.

"Cool, or something," Miller responded.

With that, Chutkow announced that he had no further questions.

9:33--Took cash: Miller says he took cash from Park on "a few" occasions.  He estimated that he received about $10,000 from him, which he says was inappropriate to accept.

9:31--Helping hand: Miller helped Park and Pangborn's Asian Village venture get some funding from the city's pension board.  He said he put in a good word with trustees Jeffrey Beasley and DeDan Milton (both close friends of Kilpatrick). 

9:28--New company: Miller, along with Park and Pangborn, formed a new company called SCAN to do this work.  Miller helped secure Homeland Security funding for the project.  He said that, initially, he was hands-on with Park and Pangborn and made sure things were progressing.

But eventually, he said he was lax in his oversight and things turned sour. The monitors were installed, but after complaints from businesses in Campus Martius, as well as violations of city ordinances, they had to be taken down.

Miller said the project was largely a failure, though some of the cameras installed are still up.

9:23--Digital 10: Miller worked with Park and his business partner Dominic Pangborn who owned a company called Digital 10, which put television screens with inside Secretary of State offices.  They made announcements, like Amber Alerts, and brought in advertising revenue. 

Miller's plan was to have Digital 10 do the same kind of thing, but for the City of Detroit.  As a twist, they would also include homeland security information and would alert residents to potential dangers.  Like the Secretary of State monitors, these would generate advertising revenue. 

Security cameras were also to be installed.

As we're about to hear, this plan didn't exactly work out.  My colleague 7 Action News Investigator Scott Lewis did a story that exposed all of this several years ago. 

9:20--Asian Village: Chutkow's final questions for Miller are about Asian Village, a now defunct downtown restaurant development headed up by businessman Andrew Park.

"Thought it was a good idea, something the city could use," Miller said.

9:17--Oops: Miller says he didn't declare the $568,000 as income in his 2007 tax returns, but once he found out the feds were investigating him, he filed an amended return to include the money.  He's currently working to pay off those taxes.

Miller pleaded guilty to tax evasion.  As part of his plea agreement, he is now cooperating with the IRS. 

9:10--Introduction: Miller says that he introduced Cullen to Robert Shumake, who worked at Inheritance Capital Group.  ICG was interested in purchasing properties from GM and leasing them back to the company.  The money to do it would come, in part, from the city's pension board.

Miller said he would be paid a commission if the deal went through. He didn't talk to Kilpatrick about it, but did talk with Corporation Counsel John Johnson.  He asked Johnson if he was allowed to collect that fee once he left the city, or if there needed to be a "cooling off period" before he started making money off of deals he started whilee was at the city. 

Johnson, Miller says, gave him the green light.  Miller was paid $568,000. The money went into the bank account of a company he had just set up, Atrium Financial.

"I didn't want it to be known that it was me," Miller said. 

"I didn't want anyone on the pension board to know that i was involved in that transaction in any way...I wasn't sure if my relationship, even though I was gone, whether or not that would cause the transaction not to go through."

9:08--We're underway: Miller is testifying about his time as the co-chair of the Detroit Riverfront Conservancy, a non-profit organization established to redevelop the east and west side of the riverfront for public purpose.  Miller was appointed by Kilpatrick. His co-chair was Matt Cullen, who was the head of real estate for General Motors. 

Miller is being questioned by Assistant U.S. Attorney Mark Chutkow.

8:56--Congratulations: While we wait to begin, WXYZ.com wants to congratulate Kilpatrick defense attorney Michael Naughton (Clark Kent's doppelganger) and his wife on the birth of their second child.  They had a lovely daughter while the trial was on break for the Christmas holiday.  It was surely the best gift they received. 

8:46--Walking wounded: Having a long trial during the height of cold and flu season can spell trouble.  For the last few weeks, more than a few inside the court have fallen under the weather: Kwame Kilpatrick, at least two defense lawyers, a prosecutor and (most importantly) several reporters.  

Yesterday,  while we were off from court, I had to take a sick day, as did my colleague Heather Catallo.  Today, Heather is still out and I'm mostly recuperated.  But sort of like the U.S. Postal Service, neither flu nor cold nor a broken nose will stop the brave men and women of the WXYZ.com Kilpatrick trial blog from keeping you up to date. 

8:40--Welcome back: Good to be back with you on day 51 of trial.  We had a one day recess yesterday, but we're back for the third day of testimony from Kwame Kilpatrick's former friend and Chief Administrative Officer Derrick Miller. 
 
Kilpatrick was Miller's best man in his wedding. But Miller, at least lately, has been Kilpatrick's worst nightmare.  He's testified that he picked up bribes for Kilpatrick, that he was instructed to find ways for the mayor's friend Bobby Ferguson to be cut-in on major city bids, and painted Kilpatrick as a paranoid politician fearful of listening devices. 

Have a question or comment for Ross?  E-mail him at rjones@wxyz.com.  You can also follow him on Twitter @RossJones7 or like him on Facebook.

 

Print this article Back to Top

Comments