1 00:00:01,390 --> 00:00:07,750 In this episode of American Greed, Kwame killed Patrick, the youngest mayor in 2 00:00:07,750 --> 00:00:08,750 the history of Detroit. 3 00:00:09,050 --> 00:00:15,450 I was elected mayor at age 31 years old because I dared mighty things for the 4 00:00:15,450 --> 00:00:20,890 citizens of my city. There were many people who believed that he was the next 5 00:00:20,890 --> 00:00:22,150 generation of leadership. 6 00:00:22,570 --> 00:00:27,010 A leader who many hope will bring the swagger back to the Motor City. 7 00:00:27,310 --> 00:00:29,010 He was a hip -hop man. 8 00:00:29,580 --> 00:00:31,140 He was hanging out with the athletes. 9 00:00:31,440 --> 00:00:35,580 But his outrageous temptations lead to unimaginable corruption. 10 00:00:36,180 --> 00:00:41,080 From the day he walked in, this was about how can I make Kwame Kilpatrick, 11 00:00:41,080 --> 00:00:42,120 family and my friends richer. 12 00:00:42,340 --> 00:00:49,300 The mayor had $840 ,000 in unexplained cash in his personal 13 00:00:49,300 --> 00:00:50,300 bank accounts. 14 00:00:50,400 --> 00:00:52,920 Why did his administration fail? 15 00:00:53,260 --> 00:00:54,440 One word, greedy. 16 00:00:54,660 --> 00:00:56,160 Greedy, greedy, greedy. 17 00:01:11,210 --> 00:01:17,390 September 4th, 2008, before a cheering crowd in Detroit City Hall, embattled 18 00:01:17,390 --> 00:01:21,450 Mayor Kwame Kilpatrick gives an emotional televised speech. 19 00:01:24,730 --> 00:01:30,150 Despite the upbeat atmosphere, the mayor has a serious message to deliver. 20 00:01:30,610 --> 00:01:37,010 I've often said that you have to stand strong for the city of Detroit, but 21 00:01:37,010 --> 00:01:39,250 sometimes standing strong. 22 00:01:39,930 --> 00:01:41,630 mean stepping down. 23 00:01:42,170 --> 00:01:47,650 After a turbulent six and a half years in office, the mayor is resigning and 24 00:01:47,650 --> 00:01:48,650 heading to jail. 25 00:01:49,810 --> 00:01:54,170 Earlier that day, he pleaded guilty to two felony counts of obstructing justice 26 00:01:54,170 --> 00:01:59,110 after lying under oath during a police whistleblower trial. 27 00:01:59,770 --> 00:02:03,210 Amazing. And it was a huge story, and it was amazing. It was historic. 28 00:02:03,950 --> 00:02:10,690 Despite facing 120 days in jail and $1 million in restitution, Kilpatrick's 29 00:02:10,690 --> 00:02:17,130 is anything but defeatist. We fall, but this city always 30 00:02:17,130 --> 00:02:18,130 gets up. 31 00:02:18,470 --> 00:02:23,790 I want to tell you, Detroit, that you done set me up for a comeback. 32 00:02:27,530 --> 00:02:31,990 And so even right down to the end, even after being sentenced to jail, it was 33 00:02:31,990 --> 00:02:32,990 hard not to believe him. 34 00:02:33,400 --> 00:02:38,040 He continued to rebound from everything that was ever thrown at him. 35 00:02:39,460 --> 00:02:41,760 But there will be no comeback this time. 36 00:02:42,800 --> 00:02:44,620 The worst is yet to come. 37 00:02:46,020 --> 00:02:50,380 Over the next few years, the mayor will be at the center of one of the largest 38 00:02:50,380 --> 00:02:55,260 municipal corruption probes in U .S. history, in which the government accuses 39 00:02:55,260 --> 00:02:57,660 him of running the city like a crime boss. 40 00:02:58,760 --> 00:03:02,060 But this wasn't supposed to be the script for Kwame Kilpatrick. 41 00:03:02,490 --> 00:03:03,870 He was supposed to be different. 42 00:03:04,430 --> 00:03:09,330 The native son destined to turn around his faltering Rust Belt city. The hip 43 00:03:09,330 --> 00:03:13,550 -hop mayor who would provide a new model of what a public official could be. 44 00:03:14,470 --> 00:03:18,570 He was Barack Obama before Barack Obama knew who he was. 45 00:03:18,830 --> 00:03:20,210 He knew how to talk to people. 46 00:03:20,610 --> 00:03:22,170 He had it going on. 47 00:03:22,610 --> 00:03:27,210 Adolph Mongo is a veteran political consultant and one -time aide to former 48 00:03:27,210 --> 00:03:28,670 Detroit Mayor Coleman Young. 49 00:03:29,390 --> 00:03:31,810 He's known the Kilpatrick family for decades. 50 00:03:32,450 --> 00:03:34,170 Oh, they had a great name, you know. 51 00:03:34,650 --> 00:03:38,950 Lots of years in the political circles had a lot of influence. 52 00:03:39,530 --> 00:03:44,290 Kwame is the son of Carolyn Cheeks Kilpatrick, a former Michigan State 53 00:03:44,290 --> 00:03:48,070 Representative and future seven -term U .S. Congresswoman. 54 00:03:48,370 --> 00:03:52,990 His father is Bernard Kilpatrick, a former Wayne County Commissioner and 55 00:03:52,990 --> 00:03:55,110 broker in the region's Democratic machine. 56 00:03:55,750 --> 00:03:57,590 He was sheltered. 57 00:03:58,000 --> 00:04:01,060 His mother and father took care of him. They were divorced. 58 00:04:01,640 --> 00:04:04,580 He went to Florida A andM, played football. 59 00:04:05,500 --> 00:04:11,780 In 1996, just four years after earning a degree in political science, Kwame 60 00:04:11,780 --> 00:04:13,160 enters the family business. 61 00:04:13,700 --> 00:04:18,720 He wins a seat in the Michigan State Legislature and quickly makes a name for 62 00:04:18,720 --> 00:04:19,720 himself. 63 00:04:19,760 --> 00:04:24,320 I had a leadership post in the Democratic Party. I had charisma. 64 00:04:25,180 --> 00:04:27,540 So, yeah, he was a good state rep. 65 00:04:28,040 --> 00:04:33,080 While the young legislator thrives in Lansing, his hometown is in Faring as 66 00:04:33,080 --> 00:04:37,680 well. During the 1990s, nearly 80 ,000 residents leave Detroit. 67 00:04:38,440 --> 00:04:42,880 By 2001, unemployment is at 10 % and rising. 68 00:04:43,480 --> 00:04:50,260 Clinton had a successful eight years in office. These were some great times in 69 00:04:50,260 --> 00:04:51,260 the city of Detroit. 70 00:04:51,420 --> 00:04:57,880 did not benefit from it. And people was looking for somebody new. They was 71 00:04:57,880 --> 00:05:01,860 looking for fresh, a fresh face, somebody young. 72 00:05:02,200 --> 00:05:07,820 In the run -up to the 2001 mayor's election, a group of Detroit 73 00:05:07,820 --> 00:05:12,940 African American Men's Organization, or AMO, is conducting a search for a 74 00:05:12,940 --> 00:05:14,580 candidate to represent their interests. 75 00:05:14,960 --> 00:05:18,020 The Kilpatrick men are members of that group. 76 00:05:19,720 --> 00:05:25,340 Well, this is, if you look in the back, the innocent Kwame Kilpatrick. 77 00:05:25,840 --> 00:05:32,100 Larry Mongo is the older brother of Adolph Mongo and a founding member of 78 00:05:32,500 --> 00:05:36,200 Every Friday or Wednesday, twice a week, we all met. 79 00:05:36,700 --> 00:05:42,880 And most of these men were self -made men or high political positions. 80 00:05:43,400 --> 00:05:48,420 But then we said, why not get us a young John F. Kennedy? 81 00:05:48,920 --> 00:05:54,140 Why not get us a young black guy, post -silver rights? 82 00:05:54,960 --> 00:05:56,120 That's our person. 83 00:05:56,860 --> 00:06:01,960 Larry says that during one of Ammo's weekly meetings, Kwame Kilpatrick tells 84 00:06:01,960 --> 00:06:04,160 group that he recently received a sign. 85 00:06:05,440 --> 00:06:10,480 During a prayer session, Kwame says he opened up his Bible and landed on the 86 00:06:10,480 --> 00:06:15,080 story of David, who was anointed king of Israel at the age of 30. 87 00:06:15,540 --> 00:06:18,080 He says, so I'll tell y 'all I would run. 88 00:06:18,590 --> 00:06:21,370 And here's a young black guy talking about the Bible. 89 00:06:22,710 --> 00:06:24,350 We think it's superstitious. 90 00:06:24,910 --> 00:06:27,090 You go against a good kid like that. 91 00:06:27,370 --> 00:06:28,370 So we did. 92 00:06:29,150 --> 00:06:32,010 We said, okay, Kwame, you did. 93 00:06:32,990 --> 00:06:35,670 Kilpatrick's youth makes him a long shot in the race. 94 00:06:35,910 --> 00:06:41,390 But with his good name, his natural charm, and the financial support of 95 00:06:41,390 --> 00:06:42,390 has a fighting chance. 96 00:06:43,350 --> 00:06:45,150 We put up all this money. 97 00:06:45,410 --> 00:06:47,490 We knew we controlled the streets. 98 00:06:48,590 --> 00:06:50,910 We knew we controlled the right preachers. 99 00:06:53,930 --> 00:06:58,650 Kevin Dietz is an investigative reporter with WDIV in Detroit. 100 00:06:59,230 --> 00:07:05,070 At first, nobody thought Kilpatrick had a chance, but he just wowed the crowd 101 00:07:05,070 --> 00:07:08,290 everywhere he went. He just had this charisma about him. 102 00:07:09,710 --> 00:07:13,670 We want our citizens to go to the ballot box and decide whether they want to 103 00:07:13,670 --> 00:07:15,970 move forward or they want to stay in the mud. 104 00:07:16,430 --> 00:07:21,710 In an upset, Kwame wins the election, becoming the youngest mayor in the 105 00:07:21,710 --> 00:07:23,890 history at just 31 years of age. 106 00:07:24,370 --> 00:07:29,290 We were excited about this young new mayor who was going to come in and make 107 00:07:29,290 --> 00:07:30,350 Detroit different. 108 00:07:30,670 --> 00:07:34,790 But during that night's celebration, Larry Mongo says the new mayor makes a 109 00:07:34,790 --> 00:07:35,790 curious statement. 110 00:07:36,330 --> 00:07:41,690 When he got elected mayor, I swear to you, he approached me there, Mr. Mongo. 111 00:07:41,690 --> 00:07:44,590 said, well, I don't want to go to jail. 112 00:07:45,050 --> 00:07:51,690 And I laughed and I said, man, I said, the last thing you have to worry about 113 00:07:51,690 --> 00:07:52,730 going to jail. 114 00:07:53,390 --> 00:07:57,890 The men laugh off the exchange, but it would ultimately be prophetic. 115 00:07:59,290 --> 00:08:04,010 Next on American Greed, the young mayor learns how to turn power into money. 116 00:08:04,470 --> 00:08:07,210 I think Kilpatrick felt like he was loyal. 117 00:08:07,550 --> 00:08:08,550 King Kwame. 118 00:08:08,750 --> 00:08:14,210 And as the king of the city of Detroit, he was never going to spend a penny. 119 00:08:26,640 --> 00:08:27,840 Detroit, 2002. 120 00:08:28,640 --> 00:08:33,720 Shortly after taking office, new mayor Kwame Kilpatrick has residents of the 121 00:08:33,720 --> 00:08:35,580 city feeling good once again. 122 00:08:36,520 --> 00:08:37,640 How you doing? 123 00:08:37,940 --> 00:08:41,380 Congratulations. Thank you so much. I know you're going to take care of him. 124 00:08:41,380 --> 00:08:43,840 Thank you. The big man has big plans. 125 00:08:44,580 --> 00:08:48,500 Demolishing abandoned buildings, revitalizing neighborhoods, and bringing 126 00:08:48,500 --> 00:08:50,320 business back to the Motor City. 127 00:08:51,220 --> 00:08:53,560 It's so likable. You just... 128 00:08:53,850 --> 00:08:57,150 are certain that he's going to be able to get the attention of Washington and 129 00:08:57,150 --> 00:09:01,070 get dollars brought into Detroit, get business to invest in the city. 130 00:09:01,290 --> 00:09:07,150 So Patrick embodied the best and the brightest of what Detroit had produced. 131 00:09:07,670 --> 00:09:10,550 Sheila Cockrell is a member of the Detroit City Council. 132 00:09:10,990 --> 00:09:13,550 She is impressed by the new mayor's enthusiasm. 133 00:09:14,460 --> 00:09:17,500 They had put together this strategic management center. 134 00:09:17,780 --> 00:09:23,780 I mean, it was really good ideas, good, rock -solid public policy stuff. 135 00:09:23,980 --> 00:09:28,580 Though he has good ideas, the new mayor relies on a questionable group to carry 136 00:09:28,580 --> 00:09:29,580 out his vision. 137 00:09:30,540 --> 00:09:34,740 Kilpatrick's administration is stacked with friends and family, including old 138 00:09:34,740 --> 00:09:39,800 high school pals Christine Beattie as his chief of staff and Derek Miller as 139 00:09:39,800 --> 00:09:41,060 chief administrative officer. 140 00:09:42,060 --> 00:09:43,640 The friends and family plan. 141 00:09:44,140 --> 00:09:44,979 was big. 142 00:09:44,980 --> 00:09:50,120 He hired dozens of people, appointed them. They got the best jobs, and they 143 00:09:50,120 --> 00:09:51,140 the most money to do them. 144 00:09:51,560 --> 00:09:55,860 Bernard Kilpatrick, the mayor's father, also plays a role in the city's 145 00:09:55,860 --> 00:09:56,860 operations. 146 00:09:57,060 --> 00:10:01,200 Shortly before his son takes office, Bernard sets up a new consulting firm, 147 00:10:01,740 --> 00:10:03,360 Maestro Associates. 148 00:10:03,780 --> 00:10:05,100 What is a maestro? 149 00:10:05,340 --> 00:10:06,119 You see? 150 00:10:06,120 --> 00:10:08,360 In other words, he told everybody, I'm in charge. 151 00:10:08,940 --> 00:10:11,760 You wanted something done, you had to go to... 152 00:10:12,450 --> 00:10:14,390 Bernard, the consultant maestro. 153 00:10:15,010 --> 00:10:18,690 Maestro pre -approve it, then you will meet with the son. 154 00:10:19,030 --> 00:10:24,110 Despite the red flags, the Kilpatrick administration is off to a roaring 155 00:10:24,510 --> 00:10:29,210 The mayor's big plans and even bigger personality make him a local celebrity. 156 00:10:29,870 --> 00:10:33,110 How y 'all doing today? All right. How are you? How's everything? 157 00:10:33,330 --> 00:10:36,310 I saw you sneaking a picture. You guys just said, hey. 158 00:10:37,670 --> 00:10:40,590 He felt that he was just. 159 00:10:40,840 --> 00:10:45,600 Bigger than life. He was believing his own press that he was just the greatest 160 00:10:45,600 --> 00:10:46,920 thing ever. 161 00:10:47,280 --> 00:10:51,740 It's not uncommon to see the mayor flaunt his newfound status around town. 162 00:10:52,440 --> 00:10:57,100 He was going to these clubs, hung out with all the football players coming 163 00:10:57,620 --> 00:11:00,520 You can see him at the games. You can see him everywhere. 164 00:11:00,820 --> 00:11:05,900 When he went out to dinner, he'd get up and walk out of the restaurant without 165 00:11:05,900 --> 00:11:06,900 paying the bill. 166 00:11:08,160 --> 00:11:10,140 He'd say, well, why would I pay the bill? I'm the mayor. 167 00:11:10,520 --> 00:11:12,600 He would take eight, ten bodyguards. 168 00:11:13,120 --> 00:11:15,620 Everywhere he went. But it was about the show. 169 00:11:15,840 --> 00:11:20,940 It was about being Kwame Kilpatrick. But the mayor's celebrity lifestyle would 170 00:11:20,940 --> 00:11:22,040 soon catch up with him. 171 00:11:22,260 --> 00:11:27,620 In September 2002, Detroit political circles are abuzz about a rumored wild 172 00:11:27,620 --> 00:11:31,760 party at the Mnookian Mansion, the mayor's taxpayer -funded residence. 173 00:11:32,300 --> 00:11:36,580 The rumor was that Kwame Kilpatrick's wife found out about this party and 174 00:11:36,580 --> 00:11:37,579 over to it. 175 00:11:37,580 --> 00:11:42,100 According to the stories, which have reached legendary status in Detroit, the 176 00:11:42,100 --> 00:11:46,100 mayor's wife assaulted a stripper after catching her husband getting a lap 177 00:11:46,100 --> 00:11:51,140 dance. Police were called, and EMS were called, and the party broke up. 178 00:11:52,400 --> 00:11:54,700 And then everything just disappeared. 179 00:11:55,060 --> 00:11:57,740 No paperwork, no witnesses, no people. 180 00:11:58,000 --> 00:12:02,480 No one can prove the party or assault actually happened, but the story dogs 181 00:12:02,480 --> 00:12:03,860 Kilpatrick for months. 182 00:12:04,140 --> 00:12:06,420 The Mnookin Mansion is not a party house. 183 00:12:06,840 --> 00:12:10,160 What are you guys doing? The rumors were persistent. They just kept coming and 184 00:12:10,160 --> 00:12:14,420 coming and coming. The following spring, one of the mayor's bodyguards, Officer 185 00:12:14,420 --> 00:12:18,080 Harold Neltrup, makes a report that eventually reaches the head of internal 186 00:12:18,080 --> 00:12:21,060 affairs, Deputy Police Chief Gary Brown. 187 00:12:21,420 --> 00:12:25,340 He made a report indicating there may have been a party. And Gary Brown was 188 00:12:25,340 --> 00:12:30,380 looking into that report, which was his job. When Kilpatrick found out, he went 189 00:12:30,380 --> 00:12:31,880 crazy. He got so angry. 190 00:12:32,430 --> 00:12:36,550 In May 2003, Brown and Nelthorpe are removed from their jobs. 191 00:12:37,350 --> 00:12:42,110 A month later, the officers sue the mayor and the city, saying their job 192 00:12:42,110 --> 00:12:44,530 violated the Whistleblower Protection Act. 193 00:12:44,870 --> 00:12:49,390 It was an utter abuse of power, and it therefore fed the notion that there was 194 00:12:49,390 --> 00:12:50,390 cover -up. 195 00:12:51,250 --> 00:12:57,170 Up next, trouble's brewing, but King Kwame finds creative new ways to rule 196 00:12:57,170 --> 00:12:59,190 kingdom. He's using petty cash. 197 00:13:00,140 --> 00:13:04,300 To buy gifts for his friends. This is the city petty cash fund. 198 00:13:15,980 --> 00:13:21,220 Despite the rumors surrounding the raucous Manoogian mansion party, Kwame 199 00:13:21,220 --> 00:13:23,860 Kilpatrick's national profile is on the rise. 200 00:13:24,780 --> 00:13:30,200 In 2004, the dynamic young mayor speaks at the Democratic National Convention in 201 00:13:30,200 --> 00:13:36,800 Boston. I stand before you tonight as an African -American man, a husband 202 00:13:36,800 --> 00:13:40,080 and father of three beautiful children. 203 00:13:40,400 --> 00:13:41,820 He wowed the crowd. 204 00:13:42,060 --> 00:13:43,060 He had a spotlight. 205 00:13:43,480 --> 00:13:48,880 We do stand for the values of this country. Strong families, healthy 206 00:13:48,880 --> 00:13:51,700 communities, personal and civic responsibility. 207 00:13:52,510 --> 00:13:54,810 and a commitment to volunteerism and service. 208 00:13:55,210 --> 00:13:58,770 People were talking about Kwame Kilpatrick in the same breath as Barack 209 00:13:58,770 --> 00:14:01,970 and who would rise nationally first. 210 00:14:02,470 --> 00:14:06,430 But back in Detroit, Kwame's behavior is less than inspiring. 211 00:14:07,370 --> 00:14:11,910 The mayor is using the city's credit cards and the petty cash fund to finance 212 00:14:11,910 --> 00:14:13,510 his over -the -top lifestyle. 213 00:14:14,590 --> 00:14:18,970 If he wanted tickets to the Rolling Stone concert, well, I don't want to pay 214 00:14:18,970 --> 00:14:20,950 with my own money for that. I'll go to petty cash. 215 00:14:22,380 --> 00:14:23,380 Go on a vacation? 216 00:14:23,480 --> 00:14:24,840 Let's use the city credit card. 217 00:14:25,420 --> 00:14:29,420 Concerns were starting to emerge inside City Hall on the use of the city's 218 00:14:29,420 --> 00:14:31,820 credit card. You know, who was flying where? 219 00:14:32,160 --> 00:14:35,160 You know, using the city credit card for what purposes? 220 00:14:35,440 --> 00:14:40,260 But Kilpatrick's financial indiscretions run much deeper than dipping into petty 221 00:14:40,260 --> 00:14:41,260 cash. 222 00:14:41,620 --> 00:14:45,960 Over the past five years, the mayor has been abusing his nonprofit organization, 223 00:14:46,560 --> 00:14:48,160 the Kilpatrick Civic Fund. 224 00:14:49,160 --> 00:14:54,920 In 1999, as a state legislator, Kwame founded the fund to help underprivileged 225 00:14:54,920 --> 00:14:56,900 youths and promote voter education. 226 00:14:58,940 --> 00:15:01,400 But that's not where all the money goes. 227 00:15:02,220 --> 00:15:07,500 So the Kilpatrick Civic Fund is a fund for kids of Detroit. 228 00:15:07,700 --> 00:15:11,040 And kids of Detroit used it, Kwame's kids. 229 00:15:11,280 --> 00:15:13,900 They went to summer camp with the Kilpatrick Fund money. 230 00:15:14,100 --> 00:15:15,540 He used it on a... 231 00:15:15,920 --> 00:15:21,940 traveled for his family to lavish resorts and spa vacations. He used it 232 00:15:21,940 --> 00:15:27,120 new set of golf clubs. The list goes on and on. Robert Beckman is a special 233 00:15:27,120 --> 00:15:28,200 agent with the FBI. 234 00:15:28,840 --> 00:15:33,540 The Bureau begins investigating Kilpatrick when it's clear that his 235 00:15:33,540 --> 00:15:34,540 crossed the line. 236 00:15:35,100 --> 00:15:40,440 Inside the FBI by 2004, we had some concrete information that he was 237 00:15:40,440 --> 00:15:41,379 committing crimes. 238 00:15:41,380 --> 00:15:45,780 The FBI discovers the Civic Fund is being replenished in a troubling way. 239 00:15:46,240 --> 00:15:50,780 The mayor and his fundraisers routinely hit up contractors and anyone else 240 00:15:50,780 --> 00:15:52,320 wanting to do business in the city. 241 00:15:52,700 --> 00:15:56,160 If you were a contractor, you'd get a letter in the mail saying... 242 00:15:56,640 --> 00:15:59,660 This is the Kilpatrick Civic Fund. We'd like you to give us a donation. 243 00:15:59,940 --> 00:16:05,500 In this letter obtained by American Greed, donations of up to $10 ,000 are 244 00:16:05,500 --> 00:16:06,500 strongly suggested. 245 00:16:07,080 --> 00:16:11,940 Emma Bell is one of the mayor's fundraisers. The FBI learns that she has 246 00:16:11,940 --> 00:16:14,200 routine when it comes to the donations. 247 00:16:16,240 --> 00:16:22,680 She would take it to her bank, cash their check, take out money in cash 248 00:16:22,680 --> 00:16:25,200 in amounts of $10 ,000 or less. 249 00:16:25,900 --> 00:16:29,760 then go meet the mayor in a special little room that he had in his suite of 250 00:16:29,760 --> 00:16:32,620 offices. The mayor calls it his barbershop room. 251 00:16:33,040 --> 00:16:38,320 He had a barber chair installed in this small office. They'd shut the door, she 252 00:16:38,320 --> 00:16:42,400 would reach into her bra and pull out the cash and hand it to the mayor. The 253 00:16:42,400 --> 00:16:45,940 mayor's birthday party also serves as a potent fundraiser. 254 00:16:46,160 --> 00:16:49,380 The guy stood up at the front of the party and said, it's Kwame Kilpatrick's 255 00:16:49,380 --> 00:16:52,440 birthday, we're passing the hat. I'm starting with $5 ,000. 256 00:16:53,020 --> 00:16:54,120 What are you going to give? 257 00:16:54,640 --> 00:16:58,340 And they'd pass this around the party with hundreds and hundreds of 258 00:16:58,340 --> 00:16:59,319 there. 259 00:16:59,320 --> 00:17:03,000 Contractors step up their game to stay in Kwame's good graces. 260 00:17:03,200 --> 00:17:07,700 They take the mayor on shopping sprees, pay for his custom suits, and provide 261 00:17:07,700 --> 00:17:10,619 him with courtside seats to the NBA finals. 262 00:17:11,500 --> 00:17:17,160 One contractor, Anthony Suave, with Inland Waters Pollution Control, even 263 00:17:17,160 --> 00:17:18,480 the mayor his private jet. 264 00:17:18,760 --> 00:17:20,160 The mayor would send... 265 00:17:20,790 --> 00:17:26,230 to Mr. Suave and say, well, the mayor needs a jet to go to the Bahamas or to 266 00:17:26,230 --> 00:17:27,230 Florida. 267 00:17:27,470 --> 00:17:30,590 And they traveled in style at Mr. Suave's expense. 268 00:17:31,530 --> 00:17:35,810 Kilpatrick is raking in cash, but how much longer can he keep it up? 269 00:17:37,430 --> 00:17:42,150 Next on American Greed, an incident from the past threatens to derail the 270 00:17:42,150 --> 00:17:46,590 mayor's schemes when the police whistleblower trial goes to court. 271 00:17:47,030 --> 00:17:49,570 Kilpatrick came on and said, we're going to fight this. 272 00:17:50,090 --> 00:17:51,950 And then he found out that they had the text messages. 273 00:17:52,450 --> 00:17:56,070 There was a thread all the way through the text messages about how they planned 274 00:17:56,070 --> 00:17:58,670 it, how they executed it, and what they did to cover that. 275 00:18:10,010 --> 00:18:14,090 It's 2005 in Detroit, Michigan, an election year. 276 00:18:14,870 --> 00:18:16,890 Despite the mayor's likable personality, 277 00:18:17,710 --> 00:18:20,590 Ethical questions surround the Kilpatrick administration. 278 00:18:21,430 --> 00:18:23,610 His chances of re -election are slim. 279 00:18:24,310 --> 00:18:30,190 Reality hadn't struck this guy until he looked at these polling numbers and 280 00:18:30,190 --> 00:18:31,710 said, you're not going to be the mayor anymore. 281 00:18:32,370 --> 00:18:34,150 So he was in a panic. 282 00:18:34,690 --> 00:18:37,410 One day I get a call at late at night. 283 00:18:37,750 --> 00:18:41,710 A few weeks before the election, the mayor reaches out to political 284 00:18:41,710 --> 00:18:42,710 Adolph Mongo. 285 00:18:43,410 --> 00:18:44,910 I think he's been drinking. 286 00:18:45,850 --> 00:18:51,470 Because his voice was so weird. He was like, Goff, do what you do. 287 00:18:52,050 --> 00:18:54,730 Mongo unleashes a barrage of negative ads. 288 00:18:54,950 --> 00:18:57,930 The most infamous, the so -called lynching ad. 289 00:18:58,330 --> 00:18:59,810 It stops you in your tracks. 290 00:19:00,110 --> 00:19:01,590 It's a picture of a lyncher. 291 00:19:02,110 --> 00:19:07,650 And it says that the media is lynching Kwame Kilpatrick by reporting stories 292 00:19:07,650 --> 00:19:08,650 that aren't true. 293 00:19:09,130 --> 00:19:13,170 A little over the top, but that's the only way you get people's attention. 294 00:19:13,900 --> 00:19:18,320 You should have seen the first draft of the ad. It was worse than what it could 295 00:19:18,320 --> 00:19:21,120 ever be. And it made everybody stop and pause. 296 00:19:21,420 --> 00:19:24,440 And well, do we believe the media or do we believe the mayor? 297 00:19:25,280 --> 00:19:30,060 The campaign works and the mayor is again victorious on election night. 298 00:19:32,280 --> 00:19:35,200 And he wins at the end. 299 00:19:35,620 --> 00:19:39,420 It was really unbelievable to people who watch politics in this area. 300 00:19:39,850 --> 00:19:44,130 For his efforts, Mongo is paid hundreds of thousands of dollars, a chunk of 301 00:19:44,130 --> 00:19:46,470 which comes from the Kilpatrick Civic Fund. 302 00:19:46,890 --> 00:19:47,890 He's the mayor of Detroit. 303 00:19:48,090 --> 00:19:49,710 Why don't he say where you get the money from? 304 00:19:50,050 --> 00:19:52,670 The Civic Fund was for voter education. 305 00:19:54,270 --> 00:20:01,150 Now I'm a political consultant, so I had no issue with getting paid out of the 306 00:20:01,150 --> 00:20:02,150 Civic Fund. 307 00:20:02,290 --> 00:20:06,750 With the mayor back in office for another term, the feds dig deeper into 308 00:20:06,750 --> 00:20:07,750 workings of City Hall. 309 00:20:09,130 --> 00:20:10,750 The findings are shocking. 310 00:20:11,430 --> 00:20:15,550 Since the beginning of his administration, the FBI says the mayor 311 00:20:15,550 --> 00:20:19,930 lucrative pay -for -play scam involving the city water department. 312 00:20:20,930 --> 00:20:25,910 The Detroit Water and Sewerage Department is owned by the city of 313 00:20:25,910 --> 00:20:30,930 it provides water and sewerage services to an area in all of southeast Michigan, 314 00:20:30,990 --> 00:20:35,870 so the city itself can be broke and there can still be a surplus of money in 315 00:20:35,870 --> 00:20:37,330 DWSD. 316 00:20:38,030 --> 00:20:42,910 The Water Department has more than $1 billion available for contract work. 317 00:20:43,790 --> 00:20:49,230 Conveniently, the mayor of Detroit is the special administrator over the DWSD, 318 00:20:49,330 --> 00:20:52,370 giving him unchecked power to approve contracts. 319 00:20:53,950 --> 00:20:59,330 The pieces were there. He had much more power with water contracts than he did 320 00:20:59,330 --> 00:21:01,110 in other areas of city government. 321 00:21:01,450 --> 00:21:05,570 Bobby Ferguson is a friend of the mayor and the owner of several construction 322 00:21:05,570 --> 00:21:06,570 businesses. 323 00:21:07,020 --> 00:21:12,660 The FBI says Kilpatrick and his cronies instruct larger firms to make Ferguson a 324 00:21:12,660 --> 00:21:15,280 minority subcontractor on city projects. 325 00:21:17,600 --> 00:21:21,660 Sometimes Bobby Ferguson would approach contractors on his own. He would show up 326 00:21:21,660 --> 00:21:23,520 and say, I need a piece of that contract. 327 00:21:23,840 --> 00:21:29,520 In other cases, other city officials were instructed that they needed to find 328 00:21:29,520 --> 00:21:31,980 way to include Ferguson in whatever contracts they did. 329 00:21:32,650 --> 00:21:36,730 Rather than lose millions of dollars in work, the contractors often comply. 330 00:21:37,470 --> 00:21:43,870 In February 2003, the firm Walbridge Aldinger puts in a bid to construct a 331 00:21:43,870 --> 00:21:45,190 water treatment facility. 332 00:21:45,710 --> 00:21:50,870 The mayor's right -hand man, Derek Miller, informs Walbridge that they need 333 00:21:50,870 --> 00:21:51,870 include Ferguson. 334 00:21:53,290 --> 00:21:58,650 So at the last minute, Walbridge Aldinger entered into a handwritten... 335 00:21:59,550 --> 00:22:04,250 addendum to their contract that they intend to give $10 million of the 336 00:22:04,250 --> 00:22:10,950 to Bobby Ferguson. And the fact that that was a handwritten amendment to a 337 00:22:10,950 --> 00:22:12,710 million contract is unheard of. 338 00:22:13,370 --> 00:22:19,150 The story is the same for many other contractors who give Ferguson millions 339 00:22:19,150 --> 00:22:22,930 dollars in city work. Some choose to pay him for doing nothing at all. 340 00:22:23,500 --> 00:22:26,200 They said, let's just give you a million dollars because we don't want you on 341 00:22:26,200 --> 00:22:26,799 the project. 342 00:22:26,800 --> 00:22:29,660 We can do a better job without you here. So just take the money. 343 00:22:29,900 --> 00:22:35,040 On top of the Ferguson business, many contractors pay consultant fees to 344 00:22:35,040 --> 00:22:38,700 associates. If Bernard Kilpatrick came and knocked on your door and suggested 345 00:22:38,700 --> 00:22:43,440 that you hired him, there was always the implied reality that if you didn't pay 346 00:22:43,440 --> 00:22:44,440 him, somebody else would. 347 00:22:46,260 --> 00:22:51,780 In August 2007, an episode from the mayor's past once again rears its head. 348 00:22:52,330 --> 00:22:57,090 As the police whistleblower case finally goes to court, it's been four long 349 00:22:57,090 --> 00:23:01,570 years since the mayor supposedly threw a wild party at the Manoogian Mansion. 350 00:23:02,070 --> 00:23:08,230 These officers had said that they were demoted for investigating this Manoogian 351 00:23:08,230 --> 00:23:09,169 Mansion party. 352 00:23:09,170 --> 00:23:11,810 And by this time, the public had said there was no party. 353 00:23:12,190 --> 00:23:13,350 This is ridiculous. 354 00:23:13,610 --> 00:23:17,110 If there was a party, it would have been proven by now. 355 00:23:17,430 --> 00:23:20,090 During the trial, Kilpatrick takes the stand. 356 00:23:20,560 --> 00:23:24,340 The cop's attorney grills the mayor about his extramarital behavior. 357 00:23:24,760 --> 00:23:29,640 He asks him if he's ever had any affairs, particularly with his chief of 358 00:23:30,000 --> 00:23:34,160 He gets on the stand, and they start asking him questions about having a 359 00:23:34,160 --> 00:23:36,880 relationship, a sexual relationship with Christine Beatty. 360 00:23:37,380 --> 00:23:39,460 He's like, no, absolutely not. 361 00:23:40,240 --> 00:23:41,580 You're under oath, Mr. Mayor. 362 00:23:41,940 --> 00:23:42,940 Absolutely not. 363 00:23:43,100 --> 00:23:44,220 We have nothing to hide. 364 00:23:44,760 --> 00:23:46,680 We have been totally up front. 365 00:23:46,970 --> 00:23:49,550 Christine Beattie gets the same line of questioning. 366 00:23:53,370 --> 00:24:00,270 The pair also deny involvement in Gary 367 00:24:00,270 --> 00:24:01,270 Brown's firing. 368 00:24:01,690 --> 00:24:06,510 He was not fired. As a matter of fact, as mayor, I can't fire a civil servant. 369 00:24:06,810 --> 00:24:08,350 But the jury doesn't agree. 370 00:24:09,070 --> 00:24:12,390 After three weeks of testimony, the court sides with the cops. 371 00:24:13,930 --> 00:24:19,290 The city of Detroit ultimately agrees to pay the officers $8 million as part of 372 00:24:19,290 --> 00:24:20,290 the settlement. 373 00:24:20,890 --> 00:24:23,190 That's money the city of Detroit needed. 374 00:24:23,490 --> 00:24:25,750 The city of Detroit did not have an extra penny. 375 00:24:26,110 --> 00:24:30,730 But just when the city thinks the incident is behind them, the Detroit 376 00:24:30,730 --> 00:24:32,330 Press drops a bombshell. 377 00:24:33,010 --> 00:24:38,910 In January 2008, the newspaper publishes text messages from the mayor's city 378 00:24:38,910 --> 00:24:39,910 -issued pager. 379 00:24:40,560 --> 00:24:44,480 The texts tell a much different story than the one Kilpatrick and Beattie told 380 00:24:44,480 --> 00:24:45,480 in court. 381 00:24:46,440 --> 00:24:47,760 Absolutely crazy. 382 00:24:47,960 --> 00:24:49,020 Just crazy. 383 00:24:49,280 --> 00:24:52,400 He said he did not have an affair with Christine Beattie under oath. 384 00:24:52,720 --> 00:24:55,340 And these text messages show that he didn't. 385 00:24:55,720 --> 00:25:00,720 He lied under oath. The texts also show that the pair did indeed conspire 386 00:25:00,720 --> 00:25:02,240 against the deputy police chief. 387 00:25:03,100 --> 00:25:07,800 Beatty texts the mayor, I'm sorry that we are going through this mess because 388 00:25:07,800 --> 00:25:10,460 a decision that we made to fire Gary Brown. 389 00:25:10,800 --> 00:25:14,860 By this time, it was clear to me that this was a group of people that 390 00:25:14,860 --> 00:25:19,280 didn't believe the law applied to them. They were above the rules. 391 00:25:19,560 --> 00:25:22,880 Christine Beatty resigns as the mayor's chief of staff. 392 00:25:23,260 --> 00:25:28,420 She's given a $150 ,000 parachute, the bulk of it from the Kilpatrick Civic 393 00:25:28,420 --> 00:25:29,420 Fund. 394 00:25:29,800 --> 00:25:34,680 On January 30th, the mayor, with his wife by his side, makes a televised 395 00:25:34,680 --> 00:25:36,820 appearance from inside his church. 396 00:25:38,020 --> 00:25:43,480 I want to start tonight by saying to the citizens of this great city, I'm sorry 397 00:25:43,480 --> 00:25:48,740 for the embarrassment and the disappointment the events of the past 398 00:25:48,740 --> 00:25:50,140 have caused you. 399 00:25:50,360 --> 00:25:53,560 The mayor apologizes but refuses to resign. 400 00:25:53,940 --> 00:25:55,580 Let me be clear tonight. 401 00:25:55,980 --> 00:25:58,680 I would never quit on you. 402 00:25:59,820 --> 00:26:03,380 Ever. But there's just some things you can't talk your way out of. 403 00:26:03,940 --> 00:26:08,020 Kim Worthy, the Wayne County prosecutor, announces that she will investigate 404 00:26:08,020 --> 00:26:10,360 perjury charges against the mayor. 405 00:26:11,360 --> 00:26:14,420 Everything kind of just blew wide open. This was something that we could not 406 00:26:14,420 --> 00:26:15,420 ignore. 407 00:26:15,820 --> 00:26:18,600 Up next, the mayor takes a fall. 408 00:26:19,100 --> 00:26:24,000 He goes to jail for perjury. He should have been on the dumbest criminal show. 409 00:26:25,320 --> 00:26:26,320 That's dumb. 410 00:26:26,460 --> 00:26:27,460 Damn. 411 00:26:33,230 --> 00:26:39,090 After the highly publicized events of the sex and text scandal, Detroit Mayor 412 00:26:39,090 --> 00:26:41,270 Kwame Kilpatrick is on the ropes. 413 00:26:41,590 --> 00:26:46,610 In March 2008, the city council takes a non -binding vote urging the mayor to 414 00:26:46,610 --> 00:26:47,610 resign. 415 00:26:48,030 --> 00:26:49,510 Seven yeas, one nay. 416 00:26:50,190 --> 00:26:53,830 Councilwoman Sheila Cockrell says the mayor's antics are a disruptive 417 00:26:53,830 --> 00:27:00,510 distraction. By this time now, just massive financial collapse 418 00:27:00,510 --> 00:27:04,210 that was really happening, that the government should have been consumed 419 00:27:04,210 --> 00:27:07,890 the crisis. You couldn't get all this other garbage over here that was still 420 00:27:07,890 --> 00:27:08,809 being dealt with. 421 00:27:08,810 --> 00:27:13,130 At the Wayne County prosecutor's office, Kim Worthy and her staff poured over 422 00:27:13,130 --> 00:27:14,630 thousands of text messages. 423 00:27:15,440 --> 00:27:19,000 They quickly discovered how deep the rot runs in City Hall. 424 00:27:19,440 --> 00:27:23,140 It was an insight into how they did business in that administration, how 425 00:27:23,140 --> 00:27:26,200 most of the things that they did were not for the good of the city. It was for 426 00:27:26,200 --> 00:27:27,200 the good of themselves first. 427 00:27:27,320 --> 00:27:32,440 On March 24th, Worthy announces a 12 -count criminal indictment against 428 00:27:32,440 --> 00:27:33,700 Kilpatrick and Beattie. 429 00:27:34,240 --> 00:27:38,780 The mayor is charged with eight felonies, including perjury and 430 00:27:38,780 --> 00:27:43,820 justice. It is perjury if there is lying, and perjury is a crime. 431 00:27:44,350 --> 00:27:47,690 I felt that he should no longer be the mayor of Detroit, that he had to step 432 00:27:47,690 --> 00:27:51,190 down. That was a non -negotiable condition. 433 00:27:51,550 --> 00:27:56,030 We certainly take no joy or pleasure in announcing these charges. 434 00:27:56,670 --> 00:28:01,450 But it would be much sadder still if true justice were ignored. 435 00:28:01,930 --> 00:28:06,790 But the mayor won't budge. He refuses to resign and vows to fight the charges. 436 00:28:07,230 --> 00:28:09,490 Mayor, do you think you'll go to jail for covering up the perjury? 437 00:28:11,660 --> 00:28:17,280 I think Kilpatrick thought maybe the public would say, why are you charging 438 00:28:17,280 --> 00:28:19,480 guy for this lie? Everybody lies about affairs. 439 00:28:19,880 --> 00:28:21,200 But Kim Worthy wasn't backing down. 440 00:28:21,680 --> 00:28:26,600 She was sticking with it. No matter how unpopular an opinion, and this was very 441 00:28:26,600 --> 00:28:28,880 unpopular at the time, we had to do what we thought was right. 442 00:28:29,620 --> 00:28:34,820 On September 4, 2008, after months of increased scrutiny, Kilpatrick pleads 443 00:28:34,820 --> 00:28:36,440 guilty to two felony charges. 444 00:28:37,860 --> 00:28:40,180 Christine Beattie eventually does the same. 445 00:28:40,750 --> 00:28:46,510 As part of his plea deal, the mayor must resign from office, serve 120 days in 446 00:28:46,510 --> 00:28:49,690 the county jail, and pay a restitution of $1 million. 447 00:28:51,310 --> 00:28:56,130 Yeah, it was shocking, but, yeah, it's sad. 448 00:28:56,970 --> 00:29:02,930 You don't want to see people go to jail, but, you know, it is what it is. The 449 00:29:02,930 --> 00:29:06,210 mayor steps in front of the cameras to make the announcement public. 450 00:29:11,390 --> 00:29:13,310 responsibility for my own action. 451 00:29:13,510 --> 00:29:18,930 I wish with all my heart that we could turn back the hands of time and tell 452 00:29:18,930 --> 00:29:21,090 young man to make better choices. 453 00:29:21,650 --> 00:29:25,030 While the mayor is down, he vows he's not out. 454 00:29:25,290 --> 00:29:30,310 I want to tell you Detroit that you done set me up for a comeback. 455 00:29:35,600 --> 00:29:40,100 And this is literally where you begin to take the view, is there a personality 456 00:29:40,100 --> 00:29:46,080 disorder at play here? I mean, how can you actually really believe that you're 457 00:29:46,080 --> 00:29:48,300 setting yourself up for this comeback? 458 00:29:48,580 --> 00:29:53,480 With Kilpatrick's criminal enterprise crumbling, the FBI says Bobby Ferguson 459 00:29:53,480 --> 00:29:55,920 attends to some last minute financial matters. 460 00:29:56,780 --> 00:29:58,860 The day before the mayor leaves office. 461 00:29:59,390 --> 00:30:03,750 The feds say Ferguson goes to the bank and cashes out a $1 .1 million 462 00:30:03,750 --> 00:30:05,290 certificate of deposit. 463 00:30:05,950 --> 00:30:10,830 Towards the end of his administration, they were scrambling, and Ferguson was 464 00:30:10,830 --> 00:30:14,490 cashing money, and there was a concerted effort to make money at the last 465 00:30:14,490 --> 00:30:18,790 minute. For the next three months, Kwame Kilpatrick trades his office in City 466 00:30:18,790 --> 00:30:22,330 Hall for a cramped cell in the Wayne County Jail. 467 00:30:24,840 --> 00:30:30,500 On February 3rd, 2009, after serving just 99 days, he's released for good 468 00:30:30,500 --> 00:30:35,900 behavior. He immediately boards a private plane and flies to Texas, where 469 00:30:35,900 --> 00:30:37,340 allowed to complete his probation. 470 00:30:37,860 --> 00:30:43,720 People were like, let's close the terrible chapter and let's move forward. 471 00:30:43,720 --> 00:30:46,920 can finally stop talking about Kwame Kilpatrick. 472 00:30:47,360 --> 00:30:52,700 While in Texas, the former mayor takes a sales job with a subsidiary of the 473 00:30:52,700 --> 00:30:55,000 Detroit -based company CompuWare. 474 00:30:55,780 --> 00:31:01,700 As an account executive, the former mayor makes a base salary of $120 ,000, 475 00:31:01,700 --> 00:31:03,140 the potential for much more. 476 00:31:03,880 --> 00:31:09,580 People who do that job and do it well, we're making $300 ,000, $400 ,000 a 477 00:31:10,980 --> 00:31:16,040 But after just a few weeks on the job, Kilpatrick claims he's unable to make 478 00:31:16,040 --> 00:31:18,640 monthly $6 ,000 restitution payment. 479 00:31:19,800 --> 00:31:25,060 Kilpatrick wrote the judge a letter that said, after I pay all my bills, I only 480 00:31:25,060 --> 00:31:28,520 have $6 a month to pay towards restitution. 481 00:31:30,560 --> 00:31:33,480 And the judge is like, what are you talking about? 482 00:31:33,840 --> 00:31:36,600 If you would have wrote this script and took it to Hollywood, they would have 483 00:31:36,600 --> 00:31:37,600 threw it away at you. 484 00:31:38,080 --> 00:31:40,060 No one is that dumb. It can't happen. 485 00:31:40,490 --> 00:31:42,350 The judge denies the request. 486 00:31:43,670 --> 00:31:48,250 WDIV reporter Kevin Dietz grabs a camera crew and heads down to Texas to 487 00:31:48,250 --> 00:31:50,550 investigate Kilpatrick's claims of hardship. 488 00:31:50,910 --> 00:31:52,670 He's amazed at what he finds. 489 00:31:52,890 --> 00:31:56,450 He is living in a mansion much bigger than the Manuga mansion. 490 00:31:56,950 --> 00:32:01,290 He is living in a beautiful home in a gated community in South Lake, Texas. 491 00:32:01,490 --> 00:32:03,690 And he's rolling in an Escalade. 492 00:32:04,200 --> 00:32:07,380 And we follow him around with hidden cameras, and he's eating at nice 493 00:32:07,380 --> 00:32:09,480 restaurants. He's living large down in Texas. 494 00:32:10,540 --> 00:32:15,480 Kim Worthy is not amused. Her office immediately looks into Kilpatrick's 495 00:32:15,480 --> 00:32:16,900 newfound luxury lifestyle. 496 00:32:17,500 --> 00:32:22,000 When we dug further, we even found out there was much more money that was 497 00:32:22,000 --> 00:32:26,480 around and changing hands and changing accounts and et cetera. So it was even a 498 00:32:26,480 --> 00:32:27,560 lot worse than we had anticipated. 499 00:32:28,350 --> 00:32:32,050 Kilpatrick must return to Detroit for a series of restitution hearings. 500 00:32:32,590 --> 00:32:33,810 And now the judge is asking questions. 501 00:32:35,410 --> 00:32:36,610 How are you paying for this stuff? 502 00:32:36,930 --> 00:32:37,930 I don't know. 503 00:32:38,170 --> 00:32:39,750 How much is your rent? I don't know. 504 00:32:40,990 --> 00:32:42,210 My wife pays all the bills. 505 00:32:42,650 --> 00:32:44,730 Where are you getting this money? I don't know. 506 00:32:45,490 --> 00:32:50,190 After intense questioning, Kilpatrick eventually reveals where some of his 507 00:32:50,190 --> 00:32:51,190 is coming from. 508 00:32:51,610 --> 00:32:56,910 And Kilpatrick then tells the courtroom and the judge that he was given a huge 509 00:32:56,910 --> 00:32:57,910 amount of money. 510 00:32:58,000 --> 00:33:01,020 by several businessmen in Detroit to resign and leave town. 511 00:33:01,360 --> 00:33:06,960 The four businessmen are heavy hitters. Peter Carmonos of CompuAir, Dan Gilbert 512 00:33:06,960 --> 00:33:12,960 of Quicken Loans, Jim Nicholson of PVS Chemicals, and auto racing mogul Roger 513 00:33:12,960 --> 00:33:19,180 Penske. He snitched on some of the top leaders who tried to help him. This was 514 00:33:19,180 --> 00:33:21,200 in the street. Kwame wouldn't even be here today. 515 00:33:22,040 --> 00:33:27,240 The businessmen say they loaned Kilpatrick $240 ,000 to persuade him to 516 00:33:27,240 --> 00:33:31,120 Detroit. What they said was that Kilpatrick would not resign. 517 00:33:32,020 --> 00:33:34,060 And the city was crippled. 518 00:33:34,600 --> 00:33:36,140 The city couldn't do any business. 519 00:33:36,640 --> 00:33:39,580 And so they said, we need you to resign. 520 00:33:39,820 --> 00:33:43,160 We need you to move on. I think the businessmen were doing what they thought 521 00:33:43,160 --> 00:33:45,840 in the best interest of the city. My position was never that they broke the 522 00:33:45,840 --> 00:33:46,829 in any way. 523 00:33:46,830 --> 00:33:51,470 For lying about his finances, the judge puts the former mayor back behind bars. 524 00:33:51,950 --> 00:33:58,590 The judge had had it. 525 00:33:58,630 --> 00:34:00,630 And he sent him away for 18 months. 526 00:34:01,450 --> 00:34:04,650 18 months is a lot different than 99 days. 527 00:34:06,910 --> 00:34:08,510 Next on American Greed. 528 00:34:08,850 --> 00:34:13,630 Just when it seems Kwame's legal troubles can't get any worse, the feds 529 00:34:13,630 --> 00:34:16,090 hammer. Southeast Michigan got... 530 00:34:16,360 --> 00:34:22,239 A ringside seat, and they could see exactly the depth of the corruption, how 531 00:34:22,239 --> 00:34:26,199 many people were affected, and how sinister the plots were here. 532 00:34:38,100 --> 00:34:43,219 For more than eight years, residents of Detroit have heard countless tales about 533 00:34:43,219 --> 00:34:45,219 the misdeeds of Kwame Kilpatrick. 534 00:34:45,929 --> 00:34:50,889 But by the summer of 2010, the city would learn just how bad things really 535 00:34:51,590 --> 00:34:56,850 On June 23rd, after a six -year investigation, a federal grand jury 536 00:34:56,850 --> 00:35:00,790 Kilpatrick on 19 counts of fraud relating to the Civic Fund. 537 00:35:01,470 --> 00:35:06,330 We had more than enough evidence. That was a mail fraud and wire fraud in a tax 538 00:35:06,330 --> 00:35:07,890 fraud conspiracy. 539 00:35:08,310 --> 00:35:11,790 It was very gratifying to be able to reveal that to the world. 540 00:35:12,280 --> 00:35:18,300 Between 2003 and 2008, the government says the mayor received more than $640 541 00:35:18,300 --> 00:35:21,320 ,000 in unreported taxable income. 542 00:35:22,760 --> 00:35:25,540 Anytime he needed money, he'd go to the civic fund. 543 00:35:25,880 --> 00:35:31,180 It was a bank account that he had access to, and he would direct an underling 544 00:35:31,180 --> 00:35:35,560 that worked for him to simply write him checks. In December 2010, a second 545 00:35:35,560 --> 00:35:36,560 indictment drops. 546 00:35:37,120 --> 00:35:42,460 charging Kilpatrick, his father Bernard, Bobby Ferguson, and Derek Miller with 547 00:35:42,460 --> 00:35:46,740 racketeering. The indictment says the men turned the mayor's office into a 548 00:35:46,740 --> 00:35:51,520 criminal enterprise to enrich themselves, their families, and their 549 00:35:52,180 --> 00:35:57,080 They have many different schemes where they're making money off of and 550 00:35:57,080 --> 00:35:57,779 off of. 551 00:35:57,780 --> 00:36:00,660 That is the essence of a RICO conspiracy. 552 00:36:01,580 --> 00:36:05,660 In September 2012, the federal case finally goes to trial. 553 00:36:06,890 --> 00:36:07,890 It was crazy. 554 00:36:08,470 --> 00:36:13,890 You know, everywhere Kilpatrick went, you know, cameras followed him. You 555 00:36:13,930 --> 00:36:16,450 you'd think it was the biggest celebrity in the country. 556 00:36:16,890 --> 00:36:20,730 Over the next five months, prosecutors called 80 witnesses. 557 00:36:21,330 --> 00:36:25,190 In a surprise turn of events, the mayor's former chief administrator and 558 00:36:25,190 --> 00:36:28,930 school friend Derek Miller flips as part of a plea deal. 559 00:36:30,970 --> 00:36:35,430 Miller is a wealth of information regarding the inner workings at City 560 00:36:36,000 --> 00:36:40,020 It doesn't get any better than that, to have an actual member of the conspiracy 561 00:36:40,020 --> 00:36:44,740 who can testify, I was there, and this is the way it happened, and we were 562 00:36:44,740 --> 00:36:47,080 directing contracts to Bobby Ferguson. 563 00:36:47,500 --> 00:36:52,000 Miller tells the court how he used to personally deliver bribes to the mayor 564 00:36:52,000 --> 00:36:54,540 how the group would rig the contract bidding process. 565 00:36:55,460 --> 00:37:00,460 They actually had meetings where they were talking together about making 566 00:37:00,960 --> 00:37:03,440 for Bernard Kilpatrick and for Bobby Ferguson. 567 00:37:03,860 --> 00:37:10,540 FBI agents testify that Kwame Kilpatrick had $840 ,000 of unexplained cash 568 00:37:10,540 --> 00:37:12,480 deposits in his personal bank account. 569 00:37:12,880 --> 00:37:17,100 He's a W -2 wage earner. There's no reason to have piles of unexplained cash 570 00:37:17,100 --> 00:37:22,600 your bank account that way. They also found massive stacks of cash in safes 571 00:37:22,600 --> 00:37:25,760 lockboxes at Bobby Ferguson's home and businesses. 572 00:37:27,130 --> 00:37:33,790 The feds say one was packed with $275 ,000 in cash and another $500 ,000 in 573 00:37:33,790 --> 00:37:34,790 cashier's checks. 574 00:37:35,170 --> 00:37:39,670 When you start finding a million dollars in this place, hundreds of thousands of 575 00:37:39,670 --> 00:37:44,690 dollars in cashier's checks in another place, yeah, you got some problems. 576 00:37:45,090 --> 00:37:50,690 The government alleges that cash often flows freely from Ferguson to 577 00:37:50,870 --> 00:37:54,770 Once again, text messages are the former mayor's undoing. 578 00:37:55,260 --> 00:38:01,840 There's one particular text message where Ferguson sends a text message to 579 00:38:01,840 --> 00:38:06,840 mayor and tells him, go in my safe and get $7 ,500 out of it. 580 00:38:07,960 --> 00:38:12,080 Contractors testify to being extorted by the mayor and his pals. 581 00:38:12,400 --> 00:38:17,160 Some cooperate in return for reduced charges for their own misdeeds. 582 00:38:17,360 --> 00:38:21,020 There were some witnesses who paid bribes. There were people who were... 583 00:38:21,230 --> 00:38:24,610 Pure extortion victims who came in and testified they were threatened, and 584 00:38:24,610 --> 00:38:25,610 that's why they paid. 585 00:38:25,770 --> 00:38:27,290 There were other people who were both. 586 00:38:27,930 --> 00:38:30,970 Michael Ratai is Bobby Ferguson's defense attorney. 587 00:38:31,410 --> 00:38:35,130 According to him, many of the contractors got off too easy. 588 00:38:35,490 --> 00:38:40,570 You've got contractors out there that were complicit in this entire, I mean, 589 00:38:40,570 --> 00:38:44,530 you want to call it a criminal enterprise, they were absolutely 590 00:38:44,530 --> 00:38:47,450 made hundreds of millions of dollars, and they got a free pass. 591 00:38:48,230 --> 00:38:53,990 The government calculates that Ferguson received $73 million in extorted city 592 00:38:53,990 --> 00:38:58,290 contracts. It's unknown how much of that cash made its way to the mayor. 593 00:38:58,850 --> 00:39:03,310 There's absolutely no way to say exactly how much money was paid. 594 00:39:03,510 --> 00:39:07,990 But as far as contracts that got extorted and that shouldn't have gone to 595 00:39:07,990 --> 00:39:11,130 Ferguson but for criminal activity, the answer is $73 million. 596 00:39:11,600 --> 00:39:17,560 After six long months, the jury reaches a verdict. On March 11, 2013, Kwame 597 00:39:17,560 --> 00:39:19,300 Kilpatrick is found guilty. 598 00:39:20,520 --> 00:39:26,280 Convicted on 24 of the 30 counts against him, including racketeering, extortion, 599 00:39:26,580 --> 00:39:31,480 mail, and tax fraud, he's sentenced to 28 years in prison. 600 00:39:32,560 --> 00:39:36,500 This guy who was so charismatic, who could have been the mayor of Detroit 601 00:39:36,500 --> 00:39:39,600 forever, is now going to go. 602 00:39:40,080 --> 00:39:42,900 Sit in a prison for 28 years. What a waste. What a shame. 603 00:39:45,180 --> 00:39:50,460 Bobby Ferguson is found guilty on nine counts of racketeering, extortion, and 604 00:39:50,460 --> 00:39:52,680 bribery. He gets 21 years. 605 00:39:53,120 --> 00:39:59,000 I think the judge felt that Bobby Ferguson was instrumental in this, that 606 00:39:59,000 --> 00:40:02,300 Bobby had the ideas and got Kwame to go along. 607 00:40:03,440 --> 00:40:08,970 Outrageous. Nobody in the United States has ever received... a sentence of that 608 00:40:08,970 --> 00:40:11,490 magnitude, not having been a public official. 609 00:40:12,190 --> 00:40:16,790 And then there's the maestro, 72 -year -old Bernard Kilpatrick. 610 00:40:17,010 --> 00:40:22,050 He's found guilty of filing a false tax return and gets 15 months in prison. 611 00:40:22,390 --> 00:40:27,530 I went to his sentencing and was just disappointed. 612 00:40:28,050 --> 00:40:31,010 I think he should be doing the time his son is doing. 613 00:40:32,170 --> 00:40:38,110 In total, the investigation snags convictions on 34 individuals, including 614 00:40:38,110 --> 00:40:41,510 Bell, who receives two years probation for tax evasion. 615 00:40:41,770 --> 00:40:45,710 I think the important thing in this case is, out of all the people that we've 616 00:40:45,710 --> 00:40:48,330 charged, 100 % of them have been convicted. 617 00:40:48,530 --> 00:40:50,170 There were no acquittals of anybody. 618 00:40:50,510 --> 00:40:52,550 But it's no victory for Detroit. 619 00:40:53,010 --> 00:40:58,030 On July 18, 2013, the city files for Chapter 9 bankruptcy. 620 00:40:58,920 --> 00:41:03,560 With debts of nearly $20 billion, it's the largest municipal bankruptcy filing 621 00:41:03,560 --> 00:41:04,940 in U .S. history. 622 00:41:05,800 --> 00:41:10,520 While the corrupt regime of Kwame Kilpatrick didn't cause the city's 623 00:41:10,620 --> 00:41:13,660 many say that he failed to do anything to stop it. 624 00:41:13,920 --> 00:41:18,640 He did not cause the bankruptcy, but by not paying attention. 625 00:41:19,690 --> 00:41:23,090 I mean, you can't be running a criminal enterprise and dealing with the city's 626 00:41:23,090 --> 00:41:25,090 financial collapse simultaneously. 627 00:41:25,510 --> 00:41:31,330 Even if you're talking $10, $20, $50 million in stolen money, it's nothing in 628 00:41:31,330 --> 00:41:32,750 the bankruptcy. 629 00:41:33,430 --> 00:41:38,210 But it's the perception that Detroit is dirty. 630 00:41:38,490 --> 00:41:40,450 So who's going to come and invest in Detroit? 631 00:41:41,150 --> 00:41:45,530 The man who many residents thought was going to be the key to revving Detroit's 632 00:41:45,530 --> 00:41:49,210 revival instead helped drive it over the financial cliff. 633 00:41:49,710 --> 00:41:53,990 And I'm not saying he would have been Barack Obama, but who knows? 634 00:41:54,570 --> 00:41:59,150 He could have taken a city that was hopeless and brought it back. 635 00:42:00,150 --> 00:42:05,970 He used his powers to figure out how to steal and how to collect as much money 636 00:42:05,970 --> 00:42:09,730 for him and his friends and his family as he could. He just crushed. 637 00:42:10,350 --> 00:42:11,650 The city that he says he loves. 638 00:42:12,510 --> 00:42:14,730 And he ruined his life in the process. 639 00:42:18,610 --> 00:42:23,570 Kingpins, smugglers, murderers, and money men go inside the blood -drenched 640 00:42:23,570 --> 00:42:25,190 business of drug trafficking. 641 00:42:25,890 --> 00:42:28,490 Cocaine Cowboys, next on CNBC.