By M.L. ELRICK and JIM SCHAEFERFREE PRESS STAFF WRITERS
New doubts surfaced Wednesday about former Detroit Mayor Kwame Kilpatrick’s claim that he doesn’t know who is paying the rent on his million-dollar Texas home when an FBI agent testified that Kilpatrick was intimately involved in the lease negotiations.
And Kilpatrick himself raised eyebrows during the third day of his restitution hearing when he testified that he has borrowed thousands of dollars from friends to make his restitution payments.
Both revelations stood out on a day in which prosecutors sought to convince Wayne County Circuit Court Judge David Groner that Kilpatrick has violated his probation by hiding his assets.
• Read the live blog of today's Kilpatrick hearing.
They also tried to prove that a $240,000 loan Kilpatrick received from local business leaders was really a gift that should have been reported to the court.
But the top Compuware attorney who drafted the deal testified that business leaders always had intended only to lend Kilpatrick the money.
Three weeks ago, Kilpatrick said he didn’t know who was paying his rent.
Today, an FBI agent testified that Kilpatrick approved the deal.
FBI Special Agent Robert Beeckman said he spoke with a Texas real estate agent who showed Kilpatrick and his wife, Carlita, several properties. Beeckman said the agent told him he discussed with the Kilpatricks the rent for several homes — including the million-dollar house they now live in.
Although only Carlita Kilpatrick signed the lease, Beeckman testified that the agent told him she did not sign the lease until after she called Kwame Kilpatrick to make sure the terms were correct.
Beeckman said he did not know how much rent the Kilpatricks are paying. He said a federal prosecutor asked him to call the agent Monday because of what was characterized only as a “financial investigation” and to help the Wayne County Prosecutor’s office.
Wayne County Prosecutor Kym Worthy has accused Kilpatrick of hiding assets that could be used to more quickly repay $1 million in restitution. The money is owed under the terms of his criminal conviction in the text-message scandal with former chief aide and lover Christine Beatty.
Assistant U.S.Attorney Peter Caplan stopped Beeckman from answering some of Kilpatrick attorney Michael Alan Schwartz’s questions, citing federal regulations.
Another surprising development today came when assistant Wayne County Prosecutor Athina Siringas divulged that the mother of longtime Kilpatrick friends DeDan and Kandia Milton paid $12,500 toward Kilpatrick’s restitution.
Even Kilpatrick was surprised about one aspect of the revelation: He testified that he thought the Miltons’ mother, Sandra Ramsey, only lent him $10,000. He learned from prosecutors that an additional $2,500 he thought DeDan Milton had lent him had actually come from Ramsey.
Ramsey and her sons were all high-ranking political appointees during Kilpatrick’s nearly two terms as mayor.
DeDan Milton was an assistant to Kilpatrick who later represented Kilpatrick on one of the city’s pension boards. Kandia Milton had risen to deputy mayor by the time Kilpatrick resigned in September 2008.
Siringas slammed Kilpatrick for borrowing the money from Ramsey shortly after receiving a $150,000 installment of a $240,000 loan from four prominent local businessmen.
Kilpatrick said Ramsey helped him make the payment because “to leave town, to get to my wife and children, I had to pay that.…She gave me some money.”
“You had $150,000 in cash,” Siringas said.
“My wife had $150,000,” Kilpatrick replied. He has said that he transferred that money over to her and that under conditions of the loan, it was not to be used for restitution.
Siringas also grilled Kilpatrick on how he pays his monthly restitution to the city.
He said he might borrow $1,000, go to the ATM, withdraw money here and there. He said he stockpiles the money.
“Stockpile?” Siringas asked.
Kilpatrick caught himself.
“I shouldn’t have said that,” he said, chuckling. When laughter spread in the courtroom, he added: “That’ll be in the headline.…I need to be careful because it seems this has turned into something else, besides a restitution hearing.”
Then Siringas asked him again why Kilpatrick says his wife handles all their finances.
“My wife is pissed at me. So I don’t get involved in the day-to-day operations of our checking account,” said Kilpatrick, whose philandering was widely publicized after the publication of his text messages. “She directs the account, totally…
“I’m just happy to be living in that house.”
Siringas responded: “I would be too, sir.”
Prosecutors argued Wednesday that a $240,000 loan to Kilpatrick from four prominent local businessmen was actually a gift.
As evidence, the prosecution called as a witness Compuware lawyer Daniel Follis, who testified that the repayment terms on the loan — the promissory notes — weren’t completed until after the FBI and IRS came calling.
Siringas argued that was evidence the loan was a gift.
Schwartz attacked the prosecution’s theory that it was a gift with Follis’ testimony that not one of the business leaders who made the loan to Kilpatrick ever said to Follis that the money was a gift.
Kilpatrick’s attorney also invoked the businessmen’s credentials.
“All the gentlemen who made these loans are really liars?” Schwartz asked. He added: Is there any reason to believe that “any of these four highly respected businessmen who are pillars of our community were engaged in lying?”
“No,” Follis answered.
Schwartz wrapped up his questioning with this exchange: “Is it a crime in this state to give a loan?"
“Not to my knowledge,” Follis replied.
“Is it a crime in this state to receive a loan?”
“Not to my knowledge.”
Judge David Groner had a few questions of his own.
Most interestingly, Groner wanted to know if the other business leaders besides Compuware chairman Peter Karmanos, Jr. — Dan Gilbert, Jim Nicholson and Roger Penske — had ever contacted Follis directly or through their lawyers about the promissory notes.
“No,” Follis told the judge.
“Did you find that to be odd?” Groner asked.
“No, like I said, I left it to Mr. Karmanos.”
“No one raised this issue?” Groner asked. “Everyone forgot about it? All four of these guys?”
“I don’t know what they thought,” Follis answered.
Walbridge Chairman and CEO John Rakolta Jr. reiterated today that he never agreed to lend any money to Kilpatrick.
“I was asked and declined the opportunity to participate in the loan after consulting with my closest advisors. I know Pete, Jim, Roger and Dan very well and I have the utmost respect for them both professionally and personally. They are men of honor and integrity and have worked tirelessly for the betterment of the city of Detroit,” Rakolta said in a statement issued Tuesday.
Contact JIM SCHAEFER : 313-223-4542 or jschaefer@freepress.com
Contact M.L. ELRICK: 313-222-6582 or mlelrick@freepress.com.