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Ex-Detroit mayor charged in vast bid-rigging plot

DETROIT (Reuters) - Former Detroit Mayor Kwame Kilpatrick, his father and three aides on Wednesday were charged with a criminal conspiracy to rig city business deals and shake down contractors for nearly a decade.

The 38-count indictment returned by a federal grand jury on Wednesday was the result of a six-year investigation of Kilpatrick and others, said U.S. Attorney Barbara McQuade.

Prosecutors say Kilpatrick, 40, his father, Bernard, and Kilpatrick’s friend and contractor Bobby Ferguson enriched themselves by holding up key sewer and construction contracts for the crumbling city.

As part of the scheme, money donated to a non-profit run by Kilpatrick and intended for children and senior citizens was diverted to pay for yoga classes, spa treatments and golf clubs, McQuade said.

Victor Mercado, the former director of Detroit’s Water and Sewer Department, and Derrick Miller, a former aide to Kilpatrick, were also charged.

“This is a lengthy indictment, it covers a wide ranging and sweeping pattern of racketeering, extortion and abuse of public trust,” McQuade said.

She added: “We are hopeful that this case, this indictment, brings closure to this chapter in the city’s history and we hope with this indictment the culture of corruption is over.”

Kilpatrick, once regarded as a rising star in the Democratic Party and dubbed Detroit’s “hip hop mayor,” was elected in 2001 and headed the city until he was forced out in a widening scandal in 2008.

James Thomas, Kilpatrick’s lawyer, said the former mayor was “innocent of these charges” and added it would take months for defense attorneys to review evidence in the case.

The grand jury heard from hundreds of witnesses and reviewed nine months of phone conversations secured by wiretap and 628,000 text messages, he said.

McQuade said that prosecutors had found evidence of 13 schemes involving the city sewer and water department to include Ferguson’s company in contracts he would not otherwise have received.

‘READY FOR A FIGHT’

Kilpatrick is the son of a power couple in Detroit politics. His father, Bernard, has been involved in local politics for decades.

Kilpatrick’s mother, former U.S. Rep. Carolyn Cheeks Kilpatrick, served seven terms in Congress and was a member of the Congressional Black Caucus.

Analysts said the negative image of the Kilpatrick name contributed to her loss in the Democratic primary election in August. She was not named in the indictments.

In one case, Kilpatrick intervened to stop a sewer repair contract until Ferguson was named as a minority subcontractor, a job worth nearly $24 million, according to the charges.

In two other cases, Ferguson arranged to be paid nearly $2 million with the support of Kilpatrick for sewer repair work he never performed, according to the charges.

Those payments were made by larger companies not identified by prosecutors.

One of those companies allowed Kilpatrick to use its private jet for flights valued at $260,000 to destinations including Florida and Bermuda in order to keep its contracts, prosecutors said.

The indictment also claims Kilpatrick tried to steer work to Ferguson on two of the highest profile jobs in the city over the past decade: the controversial demolition of Tiger Stadium and the renovation of the historic Book Cadillac hotel.

Kilpatrick is currently in federal prison in Milan, Michigan after being sentenced to up to five years for violating terms of his 2008 probation on convictions for perjury and obstruction of justice.

“His spirits are good and his resolve is firm and he’s ready for a fight,” Thomas said of Kilpatrick.

Under that 2008 plea deal, Kilpatrick resigned as Detroit mayor, spent four months in jail, agreed to pay $1 million to the city and surrendered his law license.

Kilpatrick also faces fraud and tax charges.

The perjury conviction came after Kilpatrick admitted to lying about a sexual relationship with a former aide when giving sworn testimony in a police whistleblower lawsuit.

The city of Detroit is seeking a refund of fees paid to the federal monitor for reforms of its police department under Kilpatrick.

The city claims Kilpatrick and the woman appointed as police monitor, Sheryl Robinson Wood, had a personal relationship that compromised her oversight.

Lawyers for a slain stripper, Tamara Greene, are also suing the city and Kilpatrick, claiming that police squelched her murder investigation after she performed at a rumored party at the mayoral mansion.

Greene, 27, was killed in a drive-by shooting in 2003.

Reporting by David Bailey and Bernie Woodall, writing by Kevin Krolicki, editing by Greg McCune

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