Day 5: Bobby Ferguson paid Carlita Kilpatrick's company $100,000 in state grant money

DETROIT (WXYZ) - Earlier today, 7 Action News Investigator Ross Jones (TWITTER: @RossJones7) blogged from the Kwame Kilpatrick corruption case at federal court.  Follow his blog below:

12:47--That's all: And that's all for today, and the week.  We'll be back Monday at 9AM.  Please join us!

12:45--Testimony slows down: No doubt that today's testimony has been the slowest so far this week.  Today's witness been questioned by prosecutors and defense lawyers about a half-dozen times, with both sides quibbling over details and recollections from a dozen years ago.  The issue of jury fatigue is a real one in any trial, especially long ones, and it's fair for both sides to worry about whether jurors might be burned out by drawn-out questioning.  No doubt, jurors are happy that it's Friday. 

12:27--You were satisfied: Kilpatrick attorney Jim Thomas suggested that the state was satisfied with the way that $100,000 was spent on Carlita Kilpatrick's character education program.  The state did not seek to get the money back, but Shoemaker says that doesn't mean there weren't concerns over how the money was dolled out.

12:20--We're back: Sorry for the delay in blog posts.  As usual, I had to run out and do a quick live shot for our 7 Action News at Noon viewers updating them on today's testimony.  Trial is resuming now after what appears to be a short break.

11:38--Big misunderstanding: Van Dusen is arguing that the review done by the state budget office of how Ferguson spent state money was incomplete and sometimes incorrect.  She suggested that "this was one big misunderstanding."  Shoemaker didn't agree. 

11:27--How was it used?  Van Dusen and Shoemaker have been going back and forth for the last 20 minutes over where about $80,000 in grant money was spent.  Shoemaker said it went to a home intended for senior citizens; Van Dusen says it went to build a training facility. 

11:07--Rules were broad: Van Dusen continues to argue that the rules for spending this grant money were very broad, and even so, they allowed for programs that would contribute to economic development. That would include, Van Dusen said, building a training facility or improving office space.

10:54--Show me where it says: Van Dusen is raising her voice as she cross-examines Shoemaker.  She handed her a copy of the agreement between the state and Detroit 3D.

"It doesn't say anything about renovating or providing a training facility is inappropriate," Van Dusen said.

She said that the agreement gave non-profits a lot of latitude in how it spent the state's money.

10:48--Cross-examination: Bobby Ferguson defense lawyer Susan Van Dusen is cross-examining Shoemaker.  She was quick to point out that the Detroit 3D non-profit had been in operation six years prior to receiving the state grant money in dispute.

10:19--Brief break: 15 minute break here in federal court.  Stay with us...

10:14--"What is this organization?" Concerned over the $100,000 that Ferguson's non-profit paid to an unknown non-profit called U.N.I.T.E., Shoemaker and her colleagues "did some sleuthing" and found out that the non-profit was controlled by Kwame Kilpatrick's wife Carlita.  It was Kilpatrick who urged that Ferguson's non-profit be awarded the state grant money.

The state did not pay Ferguson the remaining $250,000 he was owed in grant money, deeming he had misused the first-half.

10:06--Most frustrating: Shoemaker says that trying to get straight answers from Ferguson's non-profit was like pulling teeth. 

"This is the only one I recall having this level of...difficulty with trying to reconcile the expenditures," she said.

9:56--Feeling secure: According to state records, Ferguson spent almost $5,000 for a security system for his offices and almost $15,000 for accounting services and "financial consultation."  Those charges, Shoemaker said, were very unusual.  Also puzzling: the non-profit charged the state almost $6,000 for tax management services.  But non-profits are tax exempt. 

9:49--Ultimatum: The state wasn't satisfied with the explanation from Ferguson's non-profit for how it was spending its money.  So they gave them an ultimatum: give us complete records by a certain date, or we take our money back. 

9:43--Bobby's offices: Assistant U.S. Attorney Michael Bullotta said in court that Bobby Ferguson used tens of thousands of dollars in state grant money to refurbish his private offices on Wyoming Street in Detroit.  Ferguson had told the state he was using the money for a training facility that would meet the grant's strict requirements. Shoemaker said she never would have approved the grant had she known that money would be going to Ferguson's offices.

"The grant was not intended to benefit a private entity," Shoemaker said.

9:35--Bobby hires Carlita: When Bobby Ferguson's non-profit wanted to provide "character education training" to children, it hired the company owned by Carlita Kilpatrick.  Shoemaker just testified that, in a letter, Ferguson's non-profit confirmed paying her $100,000 for the training.

Yesterday, a non-profit official that also hired Carlita Kilpatrick for character education training said she did almost no work to earn the $37,500 in state money that she was paid. 

9:28--"We were concerned:"  Shoemaker is testifying that the state felt that Detroit 3D, Ferguson's non-profit group, was spending state money improperly. It had been given a six-figure grant to help homebound senior citizens, tutor children and provide peer mediation.  Instead, state officials learned that Detroit 3D had purchased a home that was going to be used for community housing.

"We were having difficulty figuring out why a dwelling was purchased and how it would help seniors," she said.

Shoemaker also testified that Detroit 3D failed to provide complete receipts that would show how it had spent state money already received.

9:18--State official testifying: Lisa Shoemaker, an official with the state's budget office, is testifying right now about a grant given to a Bobby Ferguson non-profit group.  She says that early on, there were concerns that the first installment of $250,000 sent to Ferguson was being spent improperly. 

"We were encountering some difficulties with this grantee," she said. 

9:07--Awaiting the start: Court seems to be running a little behind schedule as day 4 of testimony is set to begin.  Yesterday, the focus was on two grants that (while he was a state legislator in 2000) Kwame Kilpatrick helped steer to non-profits that benefited his wife Carlita and friend Bobby Ferguson.  We expect today's testimony to pick-up where yesterday's left off.  Stay with us, we should be getting started shortly.

Print this article Back to Top

Comments