Detroit ex-water boss Victor Mercado pleads guilty to corruption

Former Detroit Water and Sewage Department head admits to using position to steer contracts

Published On: Nov 05 2012 10:34:10 AM EST   Updated On: Nov 05 2012 11:01:28 AM EST

10:18AM Hearing for Victor Mercado is about to begin. Mercado, 61, former head of the Detroit Water and Sewerage Department (DWSD) faces 4 counts: 1 racketeering, 2 counts extortion and 1 count obstruction of justice. We are anticipating he will plead guilty and will likely be looking at a sentence of 18 months.

Between 2002 and 2008, Mercado oversaw the $1 billion agency and became the highest-ranking city official in the history of Detroit in doing so. He made $240,000 a year in that role.

Throughout the trial, Mercado has mostly kept to himself, seldom saying a word let alone glancing at the other defendants. His defense counsel, Martin Crandall and John Minock, has maintained that he is an outsider to the inner circle of trust or "Kitchen Cabinet" as they have labeled it.

Mercado is accused of rigging millions of dollars worth of water contracts co-defendant Bobby Ferguson's way in return for his quarter of a million salary. The government contends he failed to blow the whistle on obvious wrong-doing.

10:26AM Martin Crandall and John Minock are in court at the podium. Looks like US Attorney Mark Chutkow will also be making a statement. 

10:31AM Judge Nancy Edmunds enters the courtroom. 

Mercado is to be arraigned on superceding information. 

Crandall says that Mercado understands the consequences. Mercado wishes to plead guilty to superceding information. 

US Attorney Mark Chutkow says that Mercado will be pleading guilty to 5th superceding on conspiracy. From 2002 to 2008, conspired with other individuals. Kwame Kilpatrick used position as mayor and special administrator to steer contracts to Bobby Ferguson and Mercado helped do so under Kilpatrick's direction. 

10:34AM Mercado sworn in and judge will ask him questions.

 Do you understand you can be silent? Yes. 

You wish to waive right? Yes. 

You are now under oath, understand? Yes your honor. 

How old are you? 61. 

Judge says he is fluent in Spanish and English. 

Presently under medication? No. 

Judge says it does appear that Mercado is competent to proceed. 

Have you discussed with lawyers? Yes. 

Happy with them? Absolutely. 

Do you understand that if you plead not guilty you could go to trial and be protected? Yes. 

Judge goes over rights. Right to plead not guilty, trial by jury, presumption of innocence. 

You wish to waive rights and enter plea of guilty? Yes your honor. 

You understand that the offense is a felony? Yes.

10:40AM Maximum penalty is 5 years and $250,000 fine. Do you understand? Yes. 

You are not on probation or parole? Yes your honor. 

Have you received copy of 5th superceding information? Yes your honor. 

Have you discussed with lawyers? Yes. 

Judge Edmunds is going to discuss charges. The elements include count 1: conspiracy to violate Hobbs-Act. 

Government will have to say this occurred July 2002 until about July 2008. 

Mercado pleads guilty to conspiracy charge

10:43AM Chutkow states terms of plea agreement. Contains a guideline that says 60 months is maximum but looking for downwards of that. Both government and defense feel that there are mitigating circumstances. Different from other defendants: 1 didn't take kickbacks and 2 evidence that he was a reluctant participant. He did at times pushback but he did cave. this does not excuse conduct. Recognizes his participation in conspiracy. Have agreed to no higher than 18 months in prison. If the court agrees to it, they dismiss all other charges. If the court accepts it, Mercado will waive his right to question sentence. Have agreed to a fine no higher than $100,000.

10:47AM Judge Edmunds: Do you understand Mercado? Yes I do. 

Has anyone promised that I would be lenient? No. 

Are you pleading guilty of free will? Yes. 

Tell me what you did. Crandall will ask you questions. 

Crandall says have we reviewed this carefully? Yes. 

In addition to the facts did you and I and Minock review activities that occurred in February 2007? Yes. 

You did have conversations then with Walbridge? Yes. 

And you related to them that the mayor would appreciate them joint-venturing on the Oakwood project? Yes. 

Did you convey to Mr. Hausmann of Walbridge, strike that. That's it. 

Chutkow says that in making communications with Houseman you were attempting to influence process? Yes. 

At the mayor's direction, Mercado helped to get Ferguson contracts. Crandall says he has already agreed to that. 

Judge says this happened in the city of Detroit? Yes says Mercado. 

Judge asks Mercado's counsel is satisfied? We are. 

Mercado are you satisfied with plea? Yes 

Judge: it is finding of the court that the defendant is competent. Defendant plea therefore accepted. Will defer sentencing until after the conclusion of proceedings in the Kilpatrick trial. 

10:52AM Hearing concludes. No word whether he will serve as a witness in the Kilpatrick trial. But looks likely that he will given the inclusion of Kwame Kilpatrick's name in the hearing.