Day 33: Businessman says Kwame Kilpatrick and father held him "hostage" with cash demands

DETROIT (WXYZ) - Earlier today, 7 Action News Investigator Ross Jones blogged all the news to come out of day 33 of the Kwame Kilpatrick corruption trial.  Follow along below:

1:00--The end: That's all for today. We'll be back tomorrow at 9AM, and I hope you'll be here with us.

12:54--Easier charges: Shea is pointing out that the feds chose not to charge Kado with bribery (even though Kado considered it to be extortion), only charging him with filing false tax returns for one year, for which he pleaded guilty to.  As we mentioned earlier, he received no prison time: only probation. 

12:50--Benefits of cooperation? This didn't take long at all.  Shea is asking Kado about his agreement with the feds that, in exchange for cooperation, they would go easier on him.

"You had a heavy incentive to cooperate with the government, did you not?" Shea asked.

"Not necessarily," Kado responded, saying he had already told Bernard Kilpatrick he was done paying him.

Shea points out that "that wouldn't get you out of a prison cell."

Kado acknowledges that there were benefits to cooperation.

12:47--He's a talker: When asked one question, Kado has sometimes taken the opportunity to answer three or four.  That's gotten under the skin of Mr. Shea, as well as Judge Nancy Edmunds, who have tried to steer him back to the question at hand more than a few times. 

12:41--Extortion, not bribery: Kado, speaking in a thick accent, is trying to make clear to Shea that the payments he made to Pavledes and another Cobo director, Glenn Blanton, were not voluntary. He said he paid Pavledes more than $140,000 and Glenn Blanton $20,000.

"Extortion, no bribes," he said.

12:38--Bribing Pavledes? Kado told an FBI agent in an earlier interview that he took $20,000 to Pavledes after he allowed him to open a temporary store inside Cobo Hall. 

Kado says Pavledes told him: "We are partners."

Kado said he offered him $20,000 of "his share," but Paveledes wouldn't accept it.  Later on, he said Pavledes took it. But Kado insists the payments were not voluntary, he says he felt obligated to pay them.

12:36--Taking aim: Shea is asking Kado about what the feds found out about him in their investigation, like the fact that he was "paying off" Cobo Hall's director Lou Pavledes before Kwame Kilpatrick was ever elected mayor.  Kado acknowledges that he paid him, but said he was extorted.

Shea is trying to paint Kado as a career-briber. 

12:32--Defense's turn: First up is John Shea for the defense.  He has his work cut out for him with this witness, but Shea is a very skilled attorney who has had lots of time to prepare for this day.

12:30--Unfiled tax returns: Kado is now being asked about what he pled to earlier: not filing tax returns for several years. He's also being asked about his plea agreement: 0 to six months in prison.  He was sentenced to only probation.  He also has to pay over $300,000 in penalties, and $106,000 in overdue taxes.

The feds are surely asking about this now because the defense surely will make a point of it later, saying that Kado's testimony was bought and paid for by the government.

12:29--Never paid: Kado says he never did pay Bernard the money, and he never received what he was owed by the city, either. 

12:28--Bernard's upset: One thing is clear: the mayor's dad was upset when Kado started backing out of paying him the $160k he had earlier promised.

"Now it's already to happen," Kilpatrick said, referencing the city finally paying him $1.6 million.

"Now you tell you you don't want to pay me," he said.

"You already told me, 'That's a deal,'" Kilpatrick said later.

12:24--Hard to hear: Again, apologies here folks.  These meetings were held in some loud restaurants, and the audio is a little rough.  For whatever reason, it looks like the transcripts that lawyers, jurors and Kado are reviewing of these conversations will not be given to us. 

The conversations are better explained (and clarified) every few minutes when Asst. U.S. Attorney Michael Bullotta stops the tape and asks Kado some follow-up questions.

12:19--Hard to pay: On this conversation, Kado and Bernard Kilpatrick are talking again about that $160,000 that Kado agreed to pay the mayor's father. In the conversation, Kado says it's hard for him to pay that much.

According to Kado, Bernard threatened that he would never see any of the $1.6 million unless he received his $160,000.  Bernard Kilpatrick said it would take years, otherwise, to go after his money through the legal system.

12:09--Second meeting: Sounds like we're listening to a recording from a second meeting between Kado and Bernard Kilpatrick.

12:06--I'm good, thanks: Asked just a second if he had any trouble hearing, Kado responded: "I have no hearing issues.  I have no understanding issues."

Perhaps a shot at the defense lawyers who were suggesting he suffered from dementia, raising doubts about the credibility of his testimony.

Sorry for the delay in blog posts.  Had to run outside quickly to do a live shot for 7 Action News at Noon.

11:36--Wants a check: On the recording, we heard Bernard Kilpatrick say that he will help Kado get the $1.6 million owed to him by the city, but only if he pays the mayor's father $160,000.  Bernard Kilpatrick wanted the money in the form of a check, and said he should be considered his consultant.

"You don't tell no one," Bernard Kilpatrick said.

11:25--Cut of the action: It sounds like Bernard Kilpatrick is asking Kado for 10% of what he says he's owed by the city.

11:20--Apologies: As I said, these recordings are difficult to hear without the aide of a transcript (or being able to play them over again).  Trying to take down the key portions.

11:18--Kilpatrick's friend: These conversations are difficult to understand without the benefit of a transcript (which jurors have), but it sounds like Bernard Kilpatrick is talking to Kado about bring in his friend Archie Clark on one of Kado's contracts.  Just now, Kado said there was no reason to bring Clark in on the contracts, calling it "something for nothing" and "another extortion."

11:10--Wiretaps: The conversations being played are from February 2008 at a meeting between Kado and Bernard Kilpatrick at Tom's Oyster Bar (presumably its E. Jefferson location, just around the corner from city hall).  Kado is talking to Kilpatrick about $3.2 million he was owed by the city in Cobo contracts.

10:54--We're back: Prepare for some wiretapped conversations.  I'll do my best to take them down, but we're told these are lengthy conversations.  Hopefully, they're clear.

10:24--Break time: And with that, we're on a 20 minute break.  Stay with us.

10:22--Wore a wire: Turns out Bernard frisked Kado a little too soon.  He just disclosed he later wore a wire on behalf of the government in order to record the conversations of other targets of the feds' probe. We should hear wiretaps soon. 

10:15--Getting frisky: How paranoid was Bernard Kilpatrick during this meeting?  Kado says he frisked him, searching for a wire.  Minutes later, though, he would make Kado an offer in exchange for not talking to the feds.

"If you do not work for the government, we'll give you a ten year extension," Kado said he was told, referring to his Cobo contracts.

He declined.

10:11--Letter from feds: In September 2005, Kado says he received a letter from the U.S. Attorney informing him he was a target of a public corruption probe. 

He says he took it to Bernard Kilpatrick, but the mayor's dad suggested it wasn't in relation to the alleged bribes Kado had been paying.  In fact, he says Bernard Kilpatrick told him it was about fmr. Supreme Court Justice Conrad Mallett.

Kado laughed at the suggestion.

10:07--European vacation: When the mayor's aide and friend Derrick Miller called asking for $10,000 for a trip to Europe for the auto show, Kado said he complied.  He gave him cash.

"I was like a hostage," Kado said, comparing his situation to his time in Iraq.

10:05--Like extortion: I'm beginning to see why the feds pushed for no jail time, only probation, for Kado.  His testimony is probably as strong as they could have hoped.

He was just asked why he wrote checks to the mayor's sister's charity.

"If we don't pay, we lose everything. It's like extortion," Kado said.

10:03--Checks from his company: Kado says he also issued checks to Kilpatrick's sister's foundation, the Next Vision Foundation.  Right now, the jury is being shown a $10,000 check.

Kado says he received a call from Emma Bell, the mayor's fundraiser, for the check.

10:01--Final payment: In June 2005, Kado said he paid Bernard Kilpatrick $100,000 to help Kwame Kilpatrick get re-elected, but he had a parting shot for the Mayor's dad.

"This is the last time you'll see me," he says he told him.

"I'm out, I'm tired of this.  This it the last time you'll see me," Kado said.

10:00--Ask, or given: Kado made it clear just now: none of this money was freely offered by him.  It was all asked for by the Kwame Kilpatrick and his father Bernard. 

With regard to Bernard Kilaptrick, Kado says he refused a few times, but he kept asking.

9:59--Worried: Kado says he was afraid that not paying the Mayor's father would end badly for him, saying his contracts were "at the mercy of the mayor."

9:57--Big payments to Bernard: Kado says he was paying the mayor's father, too.  He paid Bernard Kilpatrick $200,000 to $300,000 in cash over a period of about three to four years, beginning in Kilpatrick's first term as mayor. 

The payments either happened at the Kado's office or at Bernard Kilpatrick's, located at 547 Jefferson. 

"Why were you paying Bernard Kilpatrick?" Chutkow asked Kado.

"Because he's the mayor's father," he responded.

9:55--Bad tenant: Kado says that Bernard Kilpatrick, the mayor's father, rented office space from him. Well, sorta rented.  Kado says he paid for two months rent, but stopped after that.  He promised to pay eventually, but never did.

Still, Kado didn't kick him out.

"He's the mayor's father. How can I evict him?" Kado said.

9:47--Why the payments: Kado says he paid the money to Kilpatrick because of fear that the mayor's appointee, who headed up Cobo Hall, would take away his contracts.

"The director of Cobo, he can kick you out in two hours," Kado said.

"He's the ultimate authority."

9:44--Cash calls: Kado says these calls happened four or five times. Each time, the hand offs took place in the Mayor's office, where the two were alone.

9:41--Kilpatrick calls again: Kado says he received a few more calls from Kilpatrick through the years. He would be given a few days to get the requested cash together, and he would then call DeDan Milton to arrange access to Kilpatrick. 

"He would call, the Mayor would call, (say) he needs money, and I'd need four or five days to get the money," Kado said.

He said he would meet Kilpatrick in the mayor's office.

"I'd go see him, I'd give him the money," Kado said. 

9:36--Seems sharp: For those of you following the blog during opening statements, you'll remember that Kilpatrick lawyer Jim Thomas said Karl Kado suffered from dementia.  So far, though, he seems quite sharp and on top of things. In fact, he's offering more detail than the prosecution is asking for with some of his answers. 

9:34--Cleaning contract: In the Spring of 2002, Kado says he started a cleaning company named Metro Services Organization (or MSO) that also received a contract at Cobo. It was quite a lucrative contract, bring in four to five million a year.

9:31--Hierarchy: A little lesson in Cobo Hall's chain of command at the time.  Lou Pavledes was the director of Cobo Hall.  He was appointed by Kwame Kilpatrick, the man allegedly asking Kado for the cash. 

9:29--Hand off: Kado says he gave the $10,000 cash to Derrick Miller, the mayor's close friend and aide.  He said he gave it to Miller in a brown bag.

"I had no choice but to give it," Kado said, who says he feared Kilpatrick could hurt his contracts at Cobo.

9:25--Kilpatrick calls: Months after being elected mayor, Karl Kado says Kwame Kilpatrick called him and said, "Karl, we need $10,000." 

Kado says the mayor didn't say why he needed the money.

"I need a couple days to get it together," Kado says.  He compiled the money in cash. 

9:24--Need your support: Kado says he ran into Bernard Kilpatrick and Arthur Blackwell shortly after a 2001 mayoral debate between Kilpatrick and Gil Hill, and Blackwell asked him to support Kwame Kilpatrick for mayor. 

9:20--Grocery stores: Kado is talking about grocery stores that he opened downtown, one near the mayor's office at city hall, and also a food services contract he had with some of the vendors at Cobo Hall. It was during this time--the 1990s--that he says he met Bernard Kilpatrick.

9:17--Bio: Kado is giving the jury some background information about his upbringing and his background. He was born in Iraq, but has been in the United States since 1973.  He was the superintendent of a Catholic school district.  He came to the U.S. to get a PhD with the hopes of returning to Iraq to help teachers, he says.  But he never returned to Iraq. 

9:15--Kado up: And here we go.  Kado has just entered the courtroom.

9:00--Day 33: We're making progress now, aren't we?  Only probably 33  more days like this...and we might be close to finished! 

We expect to hear from Karl Kado, a Detroit businessman who says he bribed the mayor and others. My colleague Heather Catallo put together a nice preview on Friday of what we can expect to hear from Kado.

He's expected to tell the jury that he gave at least $360,000 in bribes to former mayor Kwame Kilpatrick, his father Bernard Kilpatrick, and former Kilpatrick aide Derrick Miller.

Have a question?  E-mail Ross at rjones@wxyz.com, or follow him on Twitter @RossJones7.

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