Friday recap: Kwame Kilpatrick on trial
Detroit contractor testifies he lost contracts when refusing to cut deals with defendant Bobby Ferguson
"Ten million. Five million."
That was the refrain that jurors heard over and over today from Tom Hardiman, president of A & H Contractors, who testified that he lost two lucrative contracts totaling $15 million when he failed to give Bobby Ferguson his requested cut on the deal. It was a costly mistake that Hardiman would not make again.
Hardiman testified that in 2003 Ferguson came to his house to discuss a bid proposal his then company Lakeshore Engineering Services had made for a $10 million Detroit Water and Sewerage Department (DWSD) contract to rehabilitate sewers and outfalls. Ferguson told Hardiman that he should be cut in for 25 percent of contract 1361 for being "a black guy." When Hardiman told Ferguson they already had their team in place for the contract, Ferguson replied "It still has to go across the mayor's desk."
Kilpatrick trial: 'I didn't want to upset Bobby'
After consulting with business partner Avinash Rachmale, Hardiman came back to Ferguson and offered him 10 to 12 percent instead of 25 percent. To which Ferguson is said to have responded "Ok. We'll see."
Hardiman said he began to worry about the $10 million contract and an additional $5 million water contract they had bid on when things failed to proceed in typical fashion. Hardiman said he made repeated inquiries as the what was going on with the contracts and was told only that they were "just sitting on Victor Mercado's desk."
The witness even approached Kwame Kilpatrick's mother, Carolyn Cheeks Kilpatrick, whom he had met in the mid-1980s when she was a state representative. Hardiman recalled her telling him "My son said 'I love you. I handle city business and you handle the government business. Let me handle city business.'"
Hardiman went so far as to enlist the services of Bernard Kilpatrick's Maestro Associates to check into the status of the two contracts. Despite paying Maestro Associates $2,500 in consulting services, Bernard never did tell Hardiman what had happened to them.
Lakeshore Engineering ultimately learned that they had lost both contracts. The $10 million contract ended up with Inland Waters. Bobby Ferguson was on their team.
After that, Hardiman felt he had no option but to turn to Ferguson.
"All other avenues had failed so I had nothing to lose by going to Bobby," said the witness.
In December 2004, Lakeshore teamed with Ferguson and Lanzo Lining to submit a bid proposal for a $20 million DWSD water contract. They agreed that if they got the contract, they would split the profits three ways.
The team was awarded the contract, WS 849, on March 24th, 2005 and was advised by DWSD that they could begin work immediately. Angelo D'Alessandro, Lanzo head, and Ferguson were at odds on how to breakdown the work. Both wanted to take the same line items. D'Alessandro approached Ferguson with a figure of $400,000 to $500,000 just to let Lanzo have the work. Ferguson refused saying he could make more money. Ferguson was ultimately offered more than $1 million to walk away from the job.
In September 2005, Hardiman approached Ferguson about two change orders they wanted. One was for an additional $6 to $8 million on contract 849 and the other was for an asbestos contract for $1.5 million. Hardiman explained that he knew that Ferguson had the necessary city relationships and wanted to ensure his company wasn't blind-sided like with the two cancelled contracts.
Ferguson agreed to help with the change orders but charged 5% on the contract orders for levying his contacts. His total take on the change orders was $450,000 including $25,000 cash that a panicked Hardiman rushed to Ferguson's offices.
"I did not want to upset Bobby Ferguson," explained Hardiman.
Some time later, Lakeshore Engineering and various partners won DWSD water contract 2014. Ferguson approached Hardiman at his offices and told him that he needed to include his company Xcel Construction on the project. When the witness asked why, Ferguson simply said "because they need to help you out." Despite balking at Ferguson's initial request for $400,000 for doing nothing, Hardiman said he caved because he was still haunted by the lost contracts.
Hardiman recounted how Ferguson's associate Calvin Hall would come to his offices, sit in on meetings and request payment. "You're a parasite," Hardiman said he would tell a mild-mannered Hall.
In the period between January 1st 2007 and November 10th 2011, Hardiman's A & H Contractors paid Xcel construction more than $620,000.
When a change order came up on contract 2014 to do more work on 7 streets in an east side development that should have gone to A & H Contractors, the witness testified that Ferguson nudged his way into the deal walking away with 4 streets and leaving A & H with the remaining 3. And for that, Ferguson Enterprises was paid $1,437,304.73.
Finally, Hardiman talked about Ferguson's shenanigans on water contract 865. Lakeshore Engineering along with D'Alessandro Contracting and others submitted a bid proposal for the contract for sewer repairs on the east side of Detroit. They had asked Ferguson to join but he was already with Inland's team. When Lakeshore was awarded the grant, however, Ferguson wanted in.
Hardiman testified to receiving a call while he was out-of-town by an upset D'Alessandro who told him that Ferguson was on his site and demanding that he leave. Hardiman asked Ferguson to let D'Alessandro complete the work but Ferguson staunchly refused. Hardiman ended up asking D'Alessandro to stop to let Ferguson take over.
US attorney Mark Chutkow asked the witness what Ferguson said he'd do if he didn't get D'Alessandro off the job site.
"I will shut these effin' jobs down."
And Hardiman knew from experience that was a promise Ferguson was in a position to make good on.
Court reconvenes at 9 a.m. Monday.