BLOG: Feds play damaging wiretaps, account for Kwame Kilpatrick's $531k cash stash

DETROIT (WXYZ) - Follow the very latest in the Kwame Kilpatrick corruption trial as 7 Action News Investigator Ross Jones blogs from federal court. WARNING: Some of today's testimony includes harsh language:

1:00--The end: Thanks for joining us today.  We're back tomorrow.  It's possible--though, I think unlikely--that the feds could rest their case.  

12:49--Lots of gifts: Showing scores of checks, Thomas is showing that Kilpatrick received checks for his birthday and other events. They totaled a few thousand dollars, I would estimate, but Thomas didn't offer a total. 

As Sauer points out, these checks weren't cash.

12:38--Raising money: If 200 people came to one of the parties for Kilpatrick and each gave $50, Thomas says they would raise $100,000 for Kilpatrick.

Sauer shot back at the assertion.

"I'm not going to disagree with your math Mr. Thomas, just your facts," he said.

Actually, it only adds up to $10,000.  But who's counting? 

12:29--Other sources: Thomas is asking Sauer if he knew about parties that Kilpatrick had thrown for him and others, raising the possibility that gifts he received at those parties could have been the source of all that cash. 

12:17--Savings: Under cross-examination from Kilpatrick's lawyer Jim Thomas, Sauer is being asked whether he knew if Kilpatrick had any substantial cash savings from before his election as mayor in 2001.  Sauer said that the fact that Kilpatrick continually made small cash withdrawals from his bank accounts at that time indicated that he did not have substantial savings elsewhere.

But, Thomas says, it's possible that Kilpatrick had the money and still chose to make withdrawals from his bank accounts.  Sauer concedes that it's possible. 

Sorry for the delay in blog posts.  I had to do a quick live shot outside for our 7 Action News at Noon viewers.

11:39--Ouch: Kilpatrick should have known better, says Sauer, because he took a tax law class at the Detroit College of Law.  Adding insult to injury, Sauer disclosed that Kilpatrick received a C+. 

11:35--Total: Kilpatrick benefited from $152,095 in purely personal expenses, courtesy of the Kilpatrick Civic Fund, Sauer says, between 2003 and 2008.  None of those expenses were allowable, Sauer says. 

11:30--Personal expenses: Now, Sauer's testifying about personal expenses he concluded were paid for out of the Kilpatrick Civic Fund, but benefited Kilpatrick or his campaign. We're looking at a long list of expenses which we've already heard about in this trial, which hopefully Sauer will total for us. For a Civic Fund refresher, click here.

11:25--Big number: Between 2002 and 2008, Sauer says, Kilpatrick spent $840,962.33 more than he made from his City of Detroit salary.  

"Kwame Kilpatrick was living beyond his means on the City of Detroit salary," Sauer said. 

11:22--Money in, money out: According to Sauer, Kilpatrick spent all the money that he deposited into two bank accounts.  About $1.1 million. 

11:05--Carlita's cash: Sauer says he investigated Carlita Kilpatrick's finances to see if perhaps it accounted for the $500,000+.  He found that she only withdrew $17,021.75 from October 2000 to April 2002.  

11:03--Undeclared: The grand total of Kilpatrick's undeclared cash, Sauer says, is $531,401.72.

10:58--Cashier's checks: Kilpatrick bought $34,546.46 in cashier's checks in 2005 and 2008 (it sounds like this total comes from two checks). 

10:31--Short break: Stay with us. 

10:29--Cash deposits:  Sauer also looked at Kilpatrick's J.P. Morgan Chase checking account, where he had his mayoral paycheck deposited.  However, Sauer says he found lots of cash deposits into the account, which would not represent any of his city pay.

2002: $7,200

2003: $36,100

2004: $25,900

2005: $30,700

2006: $24,200

2007: $36,950

2008: $33,300

TOTAL: $194,350

10:26--Cash payments: Kwame Kilpatrck paid his Mastercard off with cash, says Sauer, and is showing a spreadsheet detailing the payments by year. Remember, Kilpatrick too office in 2002.  He left in 2008. 

2002: $12,500

2003: $41,100

2004: $34,700

2005: $30,600

2006: $62,900

2007: $57,100

2008: $43,250

TOTAL:  $282,150

10:21--What he found: Sauer says he found no evidence of loans, civil judgments, gifts or large inheritances when he reviewed Kilpatrick's records.  

10:20--Civic Fund: Sauer says that his investigation also included the Kilpatrick Civic Fund.  We already knew this, but Sauer is just making that point clear. 

10:17--Other income: Because gifts, loans, inheritances--among other things--aren't taxable, Sauer says that many Kilpatrick family members (his mom, sisters, cousins, uncles and aunts, etc.) were called before the federal grand jury and asked about any gifts, loans, etc. that they may have given to Kilpatrick. 

Sauer was doing this, he said, because he had found money that Kilpatrick had received but not disclosed on his taxes, and wanted to rule out that they were from legitimate sources.  

10:13--Fun fact: Hey, I didn't know this.  Turns out that bribes are taxable, Sauer says. So, loyal readers, as tax season approaches, anyone who's received a bribe needs to declare it to Uncle Sam. 

10:11--Benjamin Franklin: Kilpatrick did donate some of his own money to Florida A&M, Sauer says.  Records show he donated $100 (in cash) to the university. 

10:07--Donation: Kilpatrick took a $5,000 deduction on his taxes for a donation he made to Florida A&M University (his alma mater), but the check was written by the Kilpatrick Civic Fund.  You can't do that, says Agent Sauer, because the Civic Fund is a non-profit fund supposed to help the city.  It's not Kwame Kilpatrick's personal donation.  

10:04--IRS agent: Now IRS agent Ron Sauer is up to discuss Kwame Kilpatrick's tax issues.  

10:03--Kickbacks: Also on the wiretap, Shakib Deria (Ferguson's then employee) says that Jenkins Construction was paying kickbacks to someone on the Book-Cadillac hotel site.  It's not clear who, but it appears that neither Beeckman nor the U.S. Attorney are disputing that. 

9:57--Not standard: Bullotta tried to rebut Shea's point from earlier: that Bernard Kilpatrick was merely trying to advocate for his client. 

Bullotta asked Beeckman if it was proper for a consultant to try to advocate having another contractor removed from a job site.  Beeckman said that it was not. 

9:55--Make trouble: Back to ask agent Beeckman more questions, Asst. U.S. Attorney Michael Bullotta reminds the jury of another part of the wiretap, where Beeckman asks Ferguson if George Jackson of the DEGC can "make trouble" for Jenkins.

"Can he uh, make trouble for uh, Jim Jenkins over there?" Bernard Kilpatrick said.

"Can he, can he run him out of there?"

9:52--Nothing illegal: Before sitting down, Evelyn re-played the wiretap in question where Bernard Kilpatrick is speaking to Bobby Ferguson about the Jenkins issue. Bobby Ferguson says he'll call one of his employees, Shakib Deria, who's on the Book-Cadillac job site.  He will investigate the situation, Ferguson says, and get back to him. 

Presumably, Evelyn pointed this out because there's nothing illegal about looking into what happened.  

9:50--Big anniversary: Before I forget, I want to wish a happy anniversary to my blog colleague Jim Schaefer of the Detroit Free Press as well as his former colleague M.L. Elrick, who five years ago today broke news of the text-message scandal in print.  

I was eating dinner with Steve Wilson when we received an urgent call that night, telling us to get back to the newsroom.  We were eating Italian food, if I recall, and I don't think I got to finish my meatballs. 

9:43--Up and down: Shea finished up with Beeckman.  Jim Thomas, who represents the ex-mayor, got up to ask a couple questions, but sat down minutes later.  Now, Gerald Evelyn is up. He represents Bobby Ferguson. 

9:37--No work: There's no evidence, Beeckman acknowledges, that the Capital Waste (the Bernard Kilpatrick client) received any work on this project, despite Kilpatrick's complaints.  In other words, if Bernard could really pull all the strings he's alleged to, then why didn't Capital Waste get a gig?  

9:35--Jenkins' work: Shea said Jenkins' had complaints filed about his company with the Department of Human Rights unrelated to Bernard Kilpatrick's problems with the company.

9:30--Calls Bobby: Bernard Kilpatrick bought Bobby Ferguson to discuss the Jenkins issue.  This is a transcript from Bernard's end of the phone call:

"Somebody, somebody, some white boys from out of town.  Some white boys, from the suburbs.  And he took, uh, you know, he took uh, guy across the street from you, John and them off.  And he just arbitrarily did it, it, it wasn't no price, nothin', it wasn't no argument, he just took ‘em of and put these other guys in.  That's what I been," Kilpatrick said to Ferguson. 

9:15--Doing his job: Beeckman is now under cross-examination from Bernard Kilpatrick's lawyer John Shea.

"He took up his client's cause, which is what consultants do," Shea said. 

9:10--Bernard tapped: FBI agent Beeckman is reading a transcript from a wiretap that caught Kilpatrick discussing Jenkins.

"They kinda arbitrarily threw ‘em off.  Not kinda arbitrarily, arbitrarily they threw them off, so Jim Jenkins been bullshittin' me for about the last month. I'm gonna get him back, I'm gonna take, no I wouldn't say a month, two month's he been bullshittin' me.  You know I threatin' him, I talk about him.  You now we supposed to, I got a line on the, on the guys that's doin' this new facility at, at Waste Water.

I'm gonna try to get somebody to do something to him.  I don't know if George Jackson can take him off of that thing...my people are Detroit based."

George Jackson was the head of the City of Detroit's economic arm.  He went on to say that someone named Betty, Bernard Kilpatrick's ex-wife, was also unhappy with him.

"But you know Betty still callin' me, cussin' me out cause somebody else go that job over there.  I said, oh man.  So, so…," Kilpatrick said. 

Beeckman says Kilpatrick's ex-wife was upset because she had an environmental company that sought work on the project. 

9:00--Day 60: Thank for joining us. Very sorry for not being here the last two days, I had to travel to New York with my colleagues to accept an award for our work on the Wayne County investigation.  

On the stand now is agent Bob Beeckman, who's headed up the FBI's probe into Kilpatrick, and he's testifying about wiretapped calls from Bernard Kilpatrick, where he can be heard complaining that Detroit contractor Jim Jenkins had kicked-off one of Kilpatrick's clients (Capital Waste) and hired a firm from the suburbs instead for work on the Book-Cadillac Hotel. 

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 .

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