K. Kilpatrick )
Detroit -- Federal officials are preparing felony charges against former Detroit Mayor Kwame Kilpatrick and his father, business consultant Bernard N. Kilpatrick, The Detroit News has learned.
For at least five years, the FBI and the U.S. Attorney's Office have been investigating an alleged "pay to play" system at City Hall under Kilpatrick and allegations that contractors wanting City Hall business were directed to hire the former mayor's father as a consultant.
Now there are new allegations that former Cobo Center contractor Karl Kado, who has been cooperating with the FBI since 2005, not only paid close to $300,000 to the mayor's father but made about $100,000 in illegal cash payments directly to the former mayor.
Those allegations are contained in sworn statements that are part of the evidence in the wide-ranging corruption probe, a person familiar with the investigation said Sunday. Charges are expected against both Kwame Kilpatrick and his father, though the timing and specific nature of those charges are still being determined, the source said.
It's the first time a source close to the investigation has said corruption charges against the former mayor are planned, though there have been strong signals Kilpatrick was the ultimate target of a long-running investigation that has netted nine guilty pleas.
A federal grand jury has subpoenaed records and testimony related to possible abuses in fundraising and expenditures connected with the former mayor's nonprofit foundation, the Kilpatrick Civic Fund, and possible felony income tax violations are being examined, people familiar with the investigation said.
The expected federal charges are separate from courtroom wrangling in an unrelated state case that has landed Kilpatrick in the headlines in recent months. Kilpatrick served 99 days in jail in 2008 and 2009 after pleading guilty to testifying falsely at a police whistle-blower trial and is now struggling to make $1 million in ordered restitution payments and facing the prospect of more jail time. As early as this week, Wayne County Prosecutor Kym Worthy is expected to issue a warrant charging Kilpatrick with violating the terms of his probation after he fell short on a court-ordered $79,000 payment on Friday.
James C. Thomas, a Detroit attorney representing Kwame Kilpatrick, said it was news to him that Kado told investigators he made payments directly to the former mayor.
"I would be highly skeptical at this late date," Thomas said.
"I have no knowledge that he is charged," Thomas said of Kwame Kilpatrick. "I am aware of what I read in the newspapers, and I would be foolish not to consider the fact that the government is investigating him in light of my experience with them and what I have seen that they have done in relation to the Civic Fund and all the other things."
Moving to the inner circle
In recent months, the federal investigation moved to the heart of Kilpatrick's inner circle. Kilpatrick childhood friends and former top City Hall officials Kandia and DeDan Milton pleaded guilty to bribery-related charges and agreed to cooperate.
Detroit businessman Rayford W. Jackson, an associate of Bernard Kilpatrick's who has pleaded guilty to bribery, said in a secretly videotaped conversation with FBI informant James R. Rosendall that Bernard Kilpatrick was receiving consulting payments totaling $45,000 a month while his son was mayor. But Jackson provided no context.
Christopher Andreoff, an attorney representing Kado, declined Sunday to comment on a report that Kado has given investigators detailed statements about payments Kado allegedly made to the former mayor and his father.
Sworn statements say Kado told investigators he made cash payments to Kwame Kilpatrick of about $20,000 each on four or five occasions, with Kado sometimes visiting Kilpatrick's City Hall office and Kilpatrick sometimes dropping by the Cobo Center, a person familiar with the investigation confirmed.
"I am not going to comment on a report that may be in violation of a court order or a matter that is before a federal grand jury," Andreoff said.
Kado, who awaits sentencing March 4 on charges of filing false tax returns, acknowledged in his plea agreement that he made illegal payments to at least one unnamed city official other than former Cobo directors Lou Pavledes and Glenn Blanton.
Both Pavledes and Blanton pleaded guilty to felonies and admitted taking bribes from Kado.
'City Official B'
Federal officials are extremely pleased with the information Kado has provided, a person familiar with the investigation said.
Kado also told investigators he paid $20,000 to Derrick A. Miller, who served as chief administrative officer and chief information officer under Kilpatrick, the source confirmed.
Miller was named as being under investigation in a federal search warrant related to the riverfront Asian Village development.
People familiar with the investigation said Miller is also the "City Official B" identified in the plea agreement of Rosendall, the former Synagro vice president, as having received a $2,000 cash payment, two flights to Las Vegas for sporting events and at least one flight to Mackinac Island.
Rosendall was sentenced to 11 months in prison after he pleaded guilty to bribery conspiracy and cooperated with federal investigators looking into the Detroit City Council's awarding of a $1.2 billion bribery-tainted sewage sludge contract to Synagro Technologies Inc. of Texas in 2007.
David DuMouchel, a Detroit attorney who was retained by Miller, said he has not heard from prosecutors or Miller in connection with the case in several months.
Craig Tank, a Mount Clemens attorney who represented Pavledes, said he believes federal prosecutors are now poised to bring charges against both Kilpatrick and his father.
Pavledes told the FBI about a very close and almost "symbiotic" relationship between Kado and Bernard Kilpatrick, who rented office space in a building Kado owned on East Jefferson, Tank said.
Two worked closely together
"They were extremely close almost to the extent that they were in business together," Tank said of Kado and Bernard Kilpatrick. "They even vacationed together in Las Vegas."
Pavledes sat beside former Mayor Kilpatrick on a shuttle bus ride when city of Detroit officials visited the Super Bowl in New Orleans in 2002 in preparation for Detroit hosting the event in 2006, Tank said.
When Pavledes began discussing with Kilpatrick business ideas related to the Detroit Super Bowl, the mayor told him all such proposals should go through his father, Tank said.
David Steingold, a Detroit attorney who has represented clients linked to the corruption scandal, said people should not interpret the amount of time that has lapsed since the alleged wrongdoing to mean that charges will never be brought.
"I would never be one to rush the federal government," Steingold said. "These guys know what they're doing and they're going to make sure all their ducks are in order before they bring the kind of indictment that would cause the type of sensation an indictment against those guys would bring."
U.S. Attorney Barbara McQuade, who has said it is important to bring the long-running corruption investigation to a close, declined comment.