Former Detroit Mayor Kwame Kilpatrick is at the center of a 38-count federal indictment announced this week that says he used his authority to generate millions of dollars in kickback schemes from contractors, non-profit donors and others in what is being described as a major criminal enterprise operated out of his city hall office.
Mr. Kilpatrick served as mayor of Detroit between 2002 and 2008 after serving as a state representative from 1996 through 2001. The federal grand jury indictment says his wrongdoing spanned his time in both offices.
Also charged are Bernard Kilpatrick, the mayor’s father, top aide Derrick Miller, contractor Bobby Ferguson, and Victor Mercado, the former head of the Detroit Water and Sewage Department. The five men are charged with extortion, mail and wire fraud, obstruction of justice, malicious threats to extort money, and bribery.
The indictment describes an organized effort by Kilpatrick and a band of associates to threaten contractors working with the city’s water and sewage department with losing their contract or having it held up unless they subcontracted with or shared a percentage of the contact with a company run by Mr. Ferguson for work that was often not performed.
In other cases, contracts allegedly were rigged so Ferguson would be the awarded recipient. All parties involved in the scheme shared the tens of millions generated by the operation.
Kilpatrick is described as actively pressuring city officials to award Ferguson multi-million dollar contracts for major city projects, such as the demolition of Tiger Stadium and the partial demolition of the Book Cadillac Hotel, even though Ferguson’s company did not provide the lowest bid or was not even in the running for consideration.
As a state representative, Kilpatrick and his associates set up several nonprofit organizations intended to raise money from state and private donors for civic projects but instead were used for personal gain. He also allowed himself kickbacks from organizations created to raise money for his mayoral campaigns.
In some cases, Kilpatrick was in a position of authority to directly channel funds to these organizations. For instance, the indictment says that in 2000, when Kilpatrick was the Democratic Floor Leader, he supported the annual state budget as long as a $500,000 arts grant was given to the Detroit Three Dimensional Community Development Corporation, a shell non-profit run by Ferguson.
The indictment follows a six-year investigation, said US Attorney Barbara McQuade Thursday in a briefing with reporters. “We wanted this case to be done thoroughly, accurately and fairly,” Ms. McQuade said.
She added that the current administration helped in the investigation by providing documents and access to witness.
“We are hopeful this indictment brings closure to this chapter in the city’s history … and hope with this indictment, the culture of corruption is over,” she said.
In a statement Thursday, Detroit Mayor David Bing said his administration was “disappointed by continued revelations of the mistakes of the past” and that it would “continue to wok hard to restructure city government to a level of accountability, transparency and performance.”
Kilpatrick is currently in prison for a parole violation. He was removed from office and imprisoned in 2008 on two obstruction of justice felonies.
James Thomas, Kilpatrick’s attorney, said his client is not guilty and “is up for the fight” to be exonerated.