June 19, 2009 at 12:57 pm

Monica Conyers tie to $40K in jewelry probed

Federal agents are investigating allegations that Monica Conyers got $40,000 in jewelry from Zeidman's Jewelry and Loan, whose owner urged council not to increase regulation of pawn shops, sources said. (Steve Perez / The Detroit News)

Detroit -- Federal agents are investigating allegations that Councilwoman Monica Conyers received thousands of dollars in jewelry from a pawn shop whose owner urged the council to ease off on plans to increase regulation of his business, people familiar with a City Hall corruption investigation told The Detroit News.

One estimate pegged the value of the jewelry from Zeidman's Jewelry and Loan at about $40,000, sources said.

Agents also are investigating allegations that Conyers was to receive payment for favorable consideration of an investment proposal or proposals submitted to the General Retirement System, where Conyers was a trustee, by Detroit businessman Melvin Washington and his Phoenix Group companies, sources said.

Conyers, who is the wife of U.S. Rep. John Conyers, D-Detroit, has yet to respond to federal prosecutors' offer to plead guilty to a five-year bribery-related felony charge, the sources said, adding that an indictment could be looming. Conyers doesn't want to plead to anything more than a misdemeanor, they said.

A former aide, also under investigation in the case, indicated late Thursday that Conyers may not be the only target.

"If I talk, some people will be in trouble," Sam Riddle told The Detroit News Thursday night before taping the WDIV (Channel 4) show "Flashpoint."

During the taping he said: "There very well may be some bigger fish. Don't be surprised if (former mayor) Kwame Kilpatrick comes back to Detroit from Dallas before this is all over."

Sources have identified Conyers as the "Council Member A" referenced in federal court documents as having received bribes in connection with a $1.2 billion sewage sludge contract the Detroit City Council awarded in 2007 and an earlier agreement for a composting facility in southwest Detroit. Rayford W. Jackson, a partner in the sewage deal, pleaded guilty this week to bribery conspiracy and alleged that he sent payments of at least $6,000 to Council Member A.

But allegations related to the pawn shop and the pension fund investments also have surfaced as part of a lengthy and wide-ranging investigation of City Hall contracts in which Kilpatrick and his father, business consultant Bernard N. Kilpatrick, are among those under scrutiny.

In March 2007, Conyers and Councilwoman Barbara-Rose Collins invited a representative of Zeidman's to appear before the council to express concerns about a planned city and police crackdown on alleged fencing of stolen goods by pawn shops.

The city didn't adopt the measure.

Thomas S. Labret, an owner of Zeidman's, didn't return calls Thursday.

Zeidman's, which has stores in Detroit and Southfield, is also connected to an FBI investigation involving Riddle, Southfield City Council member William Lattimore, and former state Rep. Mary Waters. Zeidman's relocated from one Southfield location to another in 2008, which required the council's approval.

Riddle defends Waters

Riddle told The News earlier Thursday he's not ruling out a deal with federal prosecutors and that he's willing to answer questions under oath. "Let the chips fall where they may," he said.

"I've never worn a wire. And asked in the proper forum, all I can say is the public has a right to know what their elected officials have been up to, and asked in the proper forum under oath, I will speak the truth."

Riddle insisted he never solicited any bribes on Conyers' behalf, but that he "engaged in lobbying."

Riddle also defended Waters, saying her "only crime has been knowing me."

Waters received two 2008 campaign donations from "Tommy Zeidman," who listed his occupation as owner of the pawn shop. One donation was for $850; a second for $950. But there is no record of a Tommy Zeidman living in Michigan.

Riddle's attorney, David Steingold, said Wednesday he has been in talks with federal prosecutors about a possible plea deal for Riddle in return for his cooperation.

Justice Department officials declined to comment.

Washington is 'charismatic'

Conyers also is under investigation on claims that she used her position as a pension trustee to her own gain.

A grand jury subpoena sent to the General Retirement System, obtained by The News, sought information about Conyers' expense reports and records related to "The Phoenix Group, The Pointe at Belle Harbour, the Whittier, and/or Melvin Washington."

Washington, a former CEO of the Whittier and incorporator of Phoenix Group Consultants Inc., has not returned phone calls from The News.

On Oct. 3, 2007, Conyers made the motion when General Retirement System trustees gave unanimous approval of a $5 million investment and a $9 million credit enhancement for a planned Phoenix Group development called The Pointe at Belle Harbour. However, the development did not go ahead as planned. In 2008, another investment proposal from the Phoenix Group was referred to a consultant for study, minutes of the meeting show. It's not clear whether that investment went ahead, either.

A Detroit nonprofit, Core City Neighborhoods Corp., partnered with Washington's for-profit companies on three housing projects, executive director Willie Cambell said Thursday.

Cambell said he would not recommend Core City do another project with Washington companies "unless there's some evidence of a tremendous amount of improvement in his ability to manage properties and meet administrative deadlines."

The projects have not benefited Core City as much as they could have because a Washington property management company, Crescent Property Management LLC, has not met all requirements, Cambell added.

"I don't think he would have to bribe anyone," Cambell said. "He's charismatic. Everyone liked to associate with Melvin."

And Washington was good at getting the projects done, though less stellar at managing them, Cambell said.

Henry Hagood, a former city planning director who left City Hall after an investigation showed that he sold city properties to Jackson and other friends at cut-rate prices, worked for Washington's Crescent Property Management in 2007, according to a sworn affidavit of Hagood, filed in a Wayne County Circuit Court case.

Christine MacDonald contributed. pegan@detnews.com">pegan@detnews.com (313) 222-2069

B. Kilpatrick