Beatty dodges Detroit, IRS; Kilpatrick launches appeal
Detroit — Christine Beatty hasn’t made a restitution payment in a year and recently was hit with a $26,000 federal tax bill, new financial problems that are emerging as her former lover Kwame Kilpatrick launches a bid for freedom Tuesday in the U.S. 6th Circuit Court of Appeals.
The debt raises questions about her ability to pay $78,484 in restitution to Detroit for her role in the text-message scandal that ruined her career and chased Kilpatrick from office. She agreed to pay $100,000 as part of a guilty plea stemming from lies she and Kilpatrick told under oath during a whistle-blower trial.
The federal tax debt dates to 2008, the year Beatty resigned as Kilpatrick’s chief of staff after text messages emerged showing she and the Detroit mayor lied about their sexual relationship during a civil trial.
Beatty, 44, has struggled to secure a full-time job or shake the Kilpatrick stigma after spending 69 days in jail, moving to Georgia, filing bankruptcy and penning a first-person story in Essence Magazine. In the essay, she said the former Detroit mayor “made me laugh, he made me angry, he propelled me to ecstasy and reduced me to tears.”
“Things are very difficult for her. I know she’s been in a tough situation and is doing what she can to rectify it,” her lawyer Jeffrey Morganroth told The Detroit News. “The association with the Kilpatrick administration, it just creates a cloud.”
Kilpatrick, meanwhile, takes a shot at overturning his public corruption conviction at 1:30 p.m. today. That’s when his lawyer Harold Gurewitz will ask the U.S. 6th Circuit Court of Appeals in Cincinnati to vacate Kilpatrick’s conviction and order a new trial.
Kilpatrick’s appeal has little to do with guilt or innocence.
Instead, the appeal largely revives arguments Kilpatrick made during a nearly six-month trial that two of his defense lawyers had a conflict of interest regarding a former client, Detroit towing titan Gasper Fiore, a one-time government witness.
Kilpatrick also said U.S. District Judge Nancy Edmunds erred by allowing lay opinion testimony from federal agents during the six-month trial.
Kilpatrick is not expected to attend oral arguments.
Kilpatrick’s appeal also alleges that an order for him to pay the Internal Revenue Service and Detroit Water and Sewerage Department more than $4.5 million was not authorized by federal law.
Kilpatrick’s appeal is a long shot, said Peter Henning, a Wayne State University law professor and former federal prosecutor.
Kilpatrick unsuccessfully raised similar complaints about his former lawyers James C. Thomas and Michael Naughton on the eve of trial in 2012.
“It’s a tough standard. It’s not just that there was a conflict, if there was one, but he has to show how it affected his defense counsel’s performance,” Henning said. “And that some plausible line of defense was ignored because of the conflict. That was a pretty strongly litigated case.”
While Kilpatrick pursues a new trial, Beatty is continuing to deal with financial problems.
The IRS filed tax liens against Beatty in August and October, accusing her of owing $26,472 in income taxes. According to tax liens obtained by The News, Beatty owes the taxes from 2008, 2009, 2010 and 2012.
The tax debt is emerging more than two years after Beatty filed Chapter 7 bankruptcy in Georgia, buckling under the weight of delinquent taxes, $220,000 in mortgage debt, consumer bills and the restitution.
Beatty hasn’t made a $500 payment to the city since Jan. 16, 2014, city spokesman John Roach said, citing finance department records.
“We’ve reached out to Ms. Beatty’s legal counsel to find out why her payments have discontinued and to determine what the next steps should be,” the city’s top lawyer Butch Hollowell said in an email.
Beatty was released from court oversight in December 2013 after serving five years of probation, meaning court officials can no longer order her to pay $500 per month toward restitution. The bill is considered a civil judgment and up to Detroit city officials to collect from Beatty.
“She’s not running away or saying ‘ha ha, I’m not going to pay you,’” Morganroth said.
After relocating to Atlanta, Beatty was a $102,250-a-year business consultant and raised her two daughters in a rented $375,000 Atlanta townhouse.
The six-figure salary came on top of at least $110,000 Beatty received from her ex-lover’s nonprofit, the Kilpatrick Civic Fund, after she resigned in early 2008.
But by October 2012, Beatty’s income had fallen to $34,300 after a consulting job ended and she was coping with mortgage debt in Michigan and other bills.
After filing bankruptcy, Beatty worked sporadically as a consultant and is pursuing full-time employment, Morganroth said. She specializes in consulting with small and large firms on how to run a business, Morganroth said.
“She was getting interviews and lots of interest, and then, apparently there would be some checking and people would see some of the text messages and she wouldn’t get any calls back,” Morganroth said.
Despite the tax bill and restitution, Beatty recently moved out of the $375,000 rental into an $1,800/month, three-story townhouse in a hip part of Atlanta.
“She’s had a difficult time professionally,” Morganroth said. “She’s made great strides and found a way to repair her personal life, and her kids are doing great. But her professional life continues to be affected by the obstruction of justice scandal.”
The new rental is less expensive, Morganroth said, and Beatty has relied on financial help from her mother, who works two jobs.
“She’s strong-minded and she’s got a lot of skills and believes she is going to be able to at some point pick up the pieces and satisfy her debts,” Morganroth said.
rsnell@detroitnews.com
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