February 27, 2008 at 6:27 pm

Court records: Kilpatrick covered up text messages to hide perjury

The Michigan Supreme Court declined today to hear an appeal from Detroit Mayor Kwame Kilpatrick to keep documents from a secret settlement of a whistle-blowers' lawsuit from being made public. (Daniel Mears / The Detroit News)

DETROIT -- An early version of a deal Detroit Mayor Kwame Kilpatrick struck with a lawyer for former Detroit police officers linked City Council approval of $8.4 million in lawsuit settlements to the lawyer's promise to keep text messages involving Kilpatrick secret, records ordered released Wednesday by the Michigan Supreme Court show.

But City Council was only told of the monetary part of the settlement agreement, not the condition that the text messages be kept secret, records show.

The records released Wednesday also show the police officers' lawyer, Michael Stefani, broke a logjam in negotiations when he drafted and circulated to the mayor's attorney a court motion he said he intended to file that would quote from the embarrassing text messages between Kilpatrick and Christine Beatty, the mayor's former chief of staff. At that point, a "global settlement" of lawsuits involving all three officers Stefani represented, which city officials had repeatedly said was "off the table," suddenly came together.

The flirtatious text messages point to an affair between Kilpatrick and Beatty in 2002 and 2003, which both had denied under oath when they testified during a police whistle-blower trial in 2007. The messages also suggest former Detroit Deputy Police Chief Gary Brown had been fired, which Kilpatrick and Beatty had denied under oath.

"In blunt terms, these exhibits and the testimony explaining them, demonstrate beyond dispute that the Mayor of Detroit and City Attorneys have willfully engaged in a massive cover-up of perjury … and that they have used millions of dollars of public money to do it," lawyers for The Detroit News and the Detroit Free Press said in documents filed with the Supreme Court urging release of the records.

How the documents' release unfolded

Wednesday's ruling ends the city of Detroit's months-long attempt to conceal the secret details of a deal to keep embarrassing text messages private. Kilpatrick's General Counsel Sharon McPhail said she is disappointed by the court's decision. She said they were fighting to protect "the sanctity" of the mediation process, not to prevent the documents' contents from being released.

"There wasn't anything to be concerned about," McPhail said, referring to the contents released Wednesday. "There's nothing in those documents being revealed that aren't in some other document that has already been released."

The newspapers said in court filings the confidentiality agreements -- an early version of which was signed by an attorney from the Detroit law department, not just the private attorneys for the mayor and the police officers -- point to possible obstruction of justice, a criminal offense.

Wayne County Prosecutor Kym Worthy is already investigating possible perjury charges against Kilpatrick and Beatty and has promised an announcement within two weeks.

A transcript of sworn testimony by Stefani that was released Wednesday describes a meeting in a parking lot between Stefani and an "ashen-faced" Samuel McCargo, lawyer for the mayor, after Stefani threatened to file a court motion that would demand $1 million in attorney fees on the grounds Kilpatrick and Beatty committed perjury at the civil trial and that would quote extensively from the text messages.

"I had no idea about these," were McCargo's first words after reading the motion outlining the text messages, Stefani said in his deposition. McCargo spoke to Kilpatrick by telephone and city Corporation Counsel John Johnson was sent in, the records show.

Shortly afterward, the sides all agreed on a "global" solution that called for $8.4 million for the officers and the text messages' transfer to the mayor's representative. Lawyers have said the size of the settlement was unusual because it paid the officers 100 cents on the dollar of their jury verdict, plus the interest accumulated up to that time. Normally, when a party such as the city agrees to waive an appeal right, it gets a sharp reduction in the amount it must pay as an offset.

"The reason for the sudden change of heart is no mystery," the newspapers said in their Michigan Supreme Court filing.

In the first settlement agreement created, the officers agreed to surrender the text messages to "an attorney designated by the mayor and the city" and called on the City Council to approve the financial terms of the deal. Return of the text messages was the first item cited. It provided financial penalties if Stefani or the officers talked about or released the text messages. And, unlike the later confidentiality agreement, already released by the city, it made no provision for the city returning to the officers purportedly private information it held of theirs.

Kilpatrick later rejected the early version of the deal, the records show. In its wake, two separate deals were cut: One, approved by City Council, made no mention of the text messages, and a second "confidentiality agreement" that orchestrated the text message transfers. Instead of mentioning the mayor and city, it only refers to Kilpatrick as a private citizen.

The newly released records also point to the city's efforts to release information about the settlement agreements in response to Freedom of Information Act requests submitted by the Free Press.

The documents filed by the newspapers describe "a false rejection letter" created by the city -- purporting to reject a proposed settlement that had in fact been essentially accepted. The reason that document was created was so the city could respond to a Michigan Freedom of Information Act request from the Detroit Free Press for settlement records by saying no settlement records existed, the documents allege.

The court documents were released following a unanimous Michigan Supreme Court decision to decline to hear an appeal from Kilpatrick to keep documents from a secret settlement of a whistle-blowers' lawsuit from being made public. The records were earlier ordered released by Wayne Circuit Judge Robert Colombo Jr. and by the Michigan Court of Appeals.

"This means the records fight that the mayor has continued against the recommendation of Judge Colombo and the City Council is over," said lawyer James E. Stewart, who represents The News. "The public will finally have access to their own records."

Reaction to ruling mixed

Colombo released the records Wednesday after conferring with attorneys. The reaction to the Supreme Court decision was swift, with the mayor's critics hailing the ruling and his supporters decrying it.

"I believe this vindicates the position of the Detroit City Council," Councilwoman Sheila Cockrel said. "Enough is enough. It is time for transparency to reign in Detroit."

City Council members have complained that they did not know about a secret side deal when they approved a settlement in the case.

John Riehl, president of AFSCME Local 207, which represents about 960 city employees, lauded the court decision and said it will reveal the mayor's failings.

"It's wonderful because the truth will come out now and everybody will see what kind of fool they've got for a mayor," Riehl said. "He needs to leave office. He's lost most of his support and he's grasping, flailing."

Johnson, the city's corporation counsel, said his office is "disappointed" with the decision and defended the legal ground the city sought to defend. He also criticized the news media that pushed for the records.

"We are disappointed with today's ruling of the Michigan Supreme Court. Opening up settlement information to public view will most certainly put a chilling effect on parties trying to settle cases," he wrote in a statement. "We are hopeful that one day this very serious legal issue can be re-visited in an environment that is not so politically charged."

Judges at both the Michigan Court of Appeals and Michigan Supreme Court level have said parts of the deposition transcript could have been withheld, but also said Colombo acted within his rights in ordering nearly the entire transcript released, since the city had not argued for withholding portions.

The Michigan Court of Appeals on Feb. 13 ordered the records released, upholding an earlier ruling by Wayne Circuit Judge Robert Colombo Jr. The city then petitioned the Supreme Court on Feb. 15.

In its 7-0 ruling, the Supreme Court said it agreed with an Appeals Court panel that said a circuit court judge was correct in ordering the documents to be unsealed.

A Wayne County jury agreed last September that the officers were punished in 2003 for raising questions about the alleged of misconduct Kilpatrick's inner circle. The jury awarded former officers Brown and Harold Nelthrope $6.5 million -- an amount lawyers said had increased to $7.9 million by the time the settlement deal was struck. A third officer, Walt Harris, who settled without going to trial, got $400,000.

You can reach Paul Egan (313) 222-2069 or mwilkinson@detnews.com">mwilkinson@detnews.com.

Carl Rashid Jr., an attorney who represents the Detroit News, waits inside ... (Clarence Tabb, Jr. / The Detroit News)