Businessmen loaned Kilpatrick $240,000

Cash spurred resignation, Karmanos, Gilbert say

Doug Guthrie, Catherine Jun and Mike Wilkinson / The Detroit News

Detroit -- Before Kwame Kilpatrick went to jail last year, he knew he could rely on a few local businessmen when he got out. That's when he could expect to collect a nearly quarter-million dollar loan.

Kilpatrick admitted during a court hearing Thursday that he began collecting a $240,000 loan from four prominent businessmen the day after he was released from jail.

Wayne County prosecutors are trying to make the case that Kilpatrick has failed to disclose all of his income, including loans and gifts, and he improperly cut his $6,000 monthly payment toward the $1 million restitution he agreed to pay the city.

"The belief was that the mayor would make the decision to leave office sooner knowing that a loan would be made available to him for the welfare of his family at some time in the near future," said Dan Gilbert, chairman and founder of Rock Financial and Quicken Loans.

Gilbert was one of two businessmen who said Thursday the loan was part of extraordinary efforts to get Kilpatrick out of office. Peter Karmanos Jr., chairman and CEO of Compuware and Gilbert acknowledged the money was designed to convince Kilpatrick to give up his office during the text-message and perjury scandal that engulfed his administration.

"Together with other concerned citizens, I made a personal loan to former Mayor Kilpatrick last year so that we could encourage him to resign," Karmanos said. "We were concerned about the city, and we wanted to help care for his family until he could get back on his feet."

Kilpatrick also said in court that businessmen Roger Penske and Jim Nicholson joined in backing the loan. Penske is an automobile mogul and Nicholson is president and CEO of PVS Chemicals. When he got out of jail, Karmanos hired Kilpatrick as a six-figure salesman in Texas, working for a division of Compuware.

The nearly quarter-million dollar loan wasn't Kilpatrick's only help.

During a four-hour hearing to decide whether Kilpatrick had the means to repay the $1 million he owes the city of Detroit, he told Wayne County Circuit Judge David Groner that Ambassador Bridge owner Matty Moroun also gave Kilpatrick's wife Carlita a gift while he was in jail. Prosecutors suggested it was as much as $50,000.

Moroun said in a letter he sent to Carlita Kilpatrick in late January, "My heart strings are tugged when I think of the storm your family has weathered, and my heart is heavy that you and your children have been harmed while doing everything possible to strengthen your family... Enclosed, please find a token of my affection for the Kilpatrick family."

Moroun's spokesman on Thursday insisted that while Moroun is trying to win federal approval of a second span beside his bridge to Canada, the personal largess lavished on Kilpatrick's wife and children wasn't aimed at influencing Kilpatrick's mother, U.S. Rep. Carolyn Cheeks Kilpatrick.

"Look at the letter. It's personal. There is no politics involved," said spokesman Phil Frame. "It's not a campaign contribution to Congresswoman Carolyn Cheeks Kilpatrick. He knew Kwame since before he got into politics and that's all there is to it."

Carlita Kilpatrick couldn't be reached for comment Thursday.

Karmanos was behind a quiet effort last year to broker a deal for Kilpatrick. Karmanos summoned community leaders and fellow businessmen to meet with Wayne County Prosecutor Kym Worthy. Shortly afterward, Kilpatrick admitted his guilt, triggering his resignation and jail term.

Others suggested the money wasn't required to get Kilpatrick to plead guilty and resign. But if it was, some say it may have been worth it.

"I think it was good intentions by some very solid citizens," said Oakland County Executive L. Brooks Patterson. "It was an incentive for Kilpatrick to end this useless defense of the Alamo."

On the stand, Kilpatrick appeared at times frustrated and cautious, carefully answering questions about the details of his wife's finances. He was asked on numerous occasions about his wife's employment, now or in the time since his incarceration, which ended Feb. 3. He appeared to know few details.

"I've been through a year, an incredibly revolutionary process in my life," he said. "It's by the grace of God I'm still with her.

"As we work out our issues, there's things that I don't know."

Kilpatrick claimed his Fifth Amendment right against self-incrimination in refusing to answer questions about his 2008 tax returns he filed with his wife.

As part of a sentence agreement, Kilpatrick pleaded guilty to three felony counts related to the text message scandal. He spent 99 days in jail and agreed to pay the city $1 million in restitution during five years of probation.

While on the stand, Kilpatrick said he provided financial information strictly on himself, but Groner later sought financial information involving his wife and any third parties who might hold assets for Kilpatrick's benefit.

When asked about his liabilities, Kilpatrick said he still owed $914,000 in restitution.

Assistant Prosecutor Athina Siringas said Kilpatrick may have committed perjury when he filed an affidavit on March 24 that claimed that he had only $6 left after living expenses to pay his restitution.

"He lied about it in an affidavit," Siringas said. "He came to the court saying, 'Oh, look at me, I can't live the way I want to live.' "

Assistant Prosecutor Robert Spada said the Kilpatricks have five bank accounts through which more than $1 million moved in the past year.

"We will show there is money being moved, hundreds of thousands of dollars being moved," Spada said.

With Kilpatrick still on the witness stand, the hearing adjourned and will resume Nov. 17.

Outside the courtroom, Kilpatrick denied any wrongdoing, and said he regretted that his wife has come under scrutiny.

"I know I owe a great deal of restitution to the city of Detroit ... but I owe a great deal of restitution to my wife for what I put her through," Kilpatrick said.

Charlie LeDuff contributed.