R. Kelly Co-Defendant Says Sexual Misconduct Lawsuits Were ‘Cost of Doing Business’

Chicago, IL — Settling sexual misconduct civil lawsuits became the “cost of doing business,” Derrel McDavid, R. Kelly’s former business manager and co-defendant in the disgraced singer’s federal child pornography trial at Dirksen U.S Courthouse, testified on Wednesday. The CPA-turned-business-manager for R. Kelly began working with the singer in the early Nineties.

During McDavid’s time on the stand — he’s the only defendant to do so in the trial — he and one of his attorneys Beau Brindley detailed how McDavid grew to dismiss claims of sexual impropriety as “money grabs” early on against the singer. It began with a civil suit filed in 1997 by Tiffany Hawkins, who alleged Kelly impregnated her (The accusation changed to sexual abuse allegations when Hawkins was underage.)

When McDavid first confronted Kelly asking if there was any truth to the pregnancy claim, he said Kelly said, “Hell no. I’ll take a paternity test. This is bullshit.” Kelly settled the suit that morphed into an underage accusation for $250,000.

This set a precedent for McDavid, he testified, as he worked with Kelly’s then-attorneys John Touhy and Gerald Margolis — who represented other big stars, including Robin Williams and Mick Jagger, and later investigator Jack Palladino, whose clients included Bill Clinton and Courtney Love. The team he hired battled what he deemed “false” accusations that came with the territory during Kelly’s meteoric superstar rise, as Margolis explained to McDavid was typical for big stars.

It became a “feeding frenzy” in the civil lawsuit realm and in comparison to what Kelly was making at the time, the settlements “were insignificant” financially, McDavid said.

Moreover, McDavid believed his boss, who denied any wrongdoing to McDavid whenever sexual misconduct claims arose. In December 2000, when the prosecution witness known as “Jane” was 14 years old, Kelly told McDavid she “was being harassed” by police about them being engaged in an illegal relationship. When McDavid confronted Kelly about the claim, Kelly denied it. “Are you out of your goddamn mind?” McDavid said Kelly told him. “That’s my goddaughter. Of course, it’s not true.”

Kelly told McDavid that he believed artist Sparkle — Jane’s aunt Stephanie Edwards, who recorded with Kelly — and Kelly’s former manager Barry Hankerson, with whom he had a falling out, were behind the queries. McDavid said he believed the accusations were untrue because not only did Kelly deny it, but “[Jane]’s denied it over and over again and no one’s talked to Rob [Kelly] about it” from the police. Jane’s parents also denied the accusations.

But Jane’s testimony during the first week of the current trial detailed alleged sexual abuse Kelly recorded on video at his home. That included the infamous footage central to the 2008 trial where Kelly was acquitted, in part because jurors said at the time she didn’t testify. One clip was filmed in the living room of R. Kelly’s former home in the Lakeview neighborhood of Chicago. As her voice grew quieter, she testified that in the video, she was lying on the floor and Kelly had given her champagne. He asked her to describe her vagina as belonging to a 14-year-old, and then he urinated on her, she said.

She testified that she initially denied the allegations when police began investigating their relationship in 2000 because “I was afraid,” and “I wanted to protect [Kelly],” whom she said she eventually developed feelings for and loved at the time. Seventeen clips from the tapes were played for the jury and heard in the courtroom where Jane’s youthful-sounding voice could be heard on the tapes referring to her “14-year-old” body, including her breasts and genitalia.

Jurors also heard from Charles Freeman earlier in the trial, who claimed McDavid and Kelly hired and paid him to recover a videotape that depicted Kelly engaging in sex acts with a minor. McDavid refuted Freeman’s account on Wednesday, claiming it was Freeman who contacted Kelly in 2001 and said Freeman told him he would sell or give a “sex tape” featuring Kelly to a media outlet if he was not paid for it. McDavid said Kelly did not deny the tape’s existence and Margolis advised that they obtain the tape.

McDavid is charged on one count of conspiracy to receive child pornography, two counts of receiving child pornography, and one count of conspiracy to obstruct justice related to Kelly’s 2008 child pornography trial that centered on Jane and the videotape that is also a focus of the current trial.

On Wednesday, McDavid and his attorney worked to build a case that he believed Kelly was innocent of the accusations and that he merely hired those that were experts in their fields — whether they were attorneys or investigators — and simply “wrote the checks” required for superstars who are stalked by those looking for a “money grab.” McDavid returns to the stand Thursday for further testimony and cross-examination.

Prior to McDavid’s testimony on Wednesday, U.S. District Judge Harry Leinenweber ruled to quash a subpoena compelling Jim DeRogatis, the former Chicago Sun-Times reporter who anonymously received a videotape allegedly depicting Kelly and Jane engaged in sex acts and whose dogged reporting led to the 2008 trial and has been a focus in the current trial, to testify.

McDavid’s attorneys said they called on DeRogatis to speak to the chain of custody for one of the tapes. DeRogatis’ lawyer argued that the chain of custody could’ve been addressed weeks earlier before trial and defended investigative reporters’ newsgathering methods and sources. Leinenweber agreed and said he had already ruled that the chain-of-custody arguments were irrelevant and said there was no basis for DeRogatis to testify. “Thank you, your honor,” DeRogatis said. “Thank you for the First Amendment.”