Local 4 is inside the courtroom for the federal corruption trial of former Detroit Mayor Kwame Kilpatrick, Kilpatrick's dad Bernard Kilpatrick and his childhood friend Bobby Ferguson. Each day we bring you information from inside federal court as it happens.
Day 53 at the U.S. District Courthouse. It will be the fifth day on the stand for government star witness Derrick "Zeke" Miller. It will be Gerald Evelyn, lawyer for Bobby Ferguson, will take a stab at Miller first thing this morning.
9:04AM Judge Nancy Edmunds enters the courtroom and the session is set to begin.
Evelyn begins his cross. Pleasantries being exchanged, so far no fireworks.
Evelyn talking about Miller's degree in Biology. Discussing Bernard Parker III and Bernard Parker JR. Apparently Parker father was involved in Miller's baseball organization. Has known Parker III over 20 years. Ferguson saying that Bernard son benefitted from his father's city political connections.
Evelyn saying DWSD not one of Miller's areas of responsibility. Miller agrees he was not intimately involved with the DWSD contracting processes.
Discussing Kelly Bartlett from the testimony on Detroit 3D and Vanguard. Evelyn asks about Miller's specific recollection about Marilyn Johnson, Ferguson's wife, documentation being insufficient for grant fund requests from the State Budget Office.
Miller says detail was missing on the grant request and scope of the work.
Evelyn asking how many submissions of Johnson's miller looked at. Miller can't remember how many but did see some invoices.
Miller agrees he has been to Ferguson Enterprises Also agrees he has never worked in the construction industry. Miller says he never asked to be shown training areas in the offices. Miller says he would not know where trainees would have been working.
Miller agreeing that Ferguson Enterprises did a fair amount of excavation.
Evelyn asking how many other minority companies did this kind of excavation work. Miller says maybe 2 or 3 but can't name them.
Evelyn says so probably the most prominent minority excavating firm is Ferguson's. That's fair says Miller.
Motor City Makeover was large scale project to help clean up neighborhoods in Detroit says Miller. Ferguson and Frank Torre were the heads of that project- took place over several years. Involved personnel, equipment, trucks for debris, land fills, people to supervise, community volunteers and a number of strategy meetings to coordinate.
Evelyn says Ferguson had ID badge in order to connect him to Motor City Makeover. Could be says Miller.
Evelyn says both Ferguson and Torre had these ID badges. Miller can't confirm that Torre had one but says it would have been consistent with Motor City Makeover.
Ferguson leans over to whisper to Kwame and pulls away laughing.
Evelyn saying Motor City Makeover saved the city millions of dollars and took several years. Miller agrees.
Evelyn says that the project was so successful the city offered to pay for them to continue. Miller says he doesn't know if that happened.
Evelyn discussing Kilpatrick administration initiatives including opportunities for minorities within the law. Miller agrees it was important to the administration.
Miller confirms that he met with several black contractors and that Ferguson was at some of those meetings. Witness also agrees that contracting business is very competitive.
Miller agrees as liaison his role was to get information and take it back to the mayor.
9:25AM Miller agrees that there were a number of people who saw the mayor and that there might have been an order of importance as to who got to see him.
Some of those people included Pinsky, Karmanos, Ted Gatzaros of Greektown, John Rakolta of Walbridge- all could call the mayor directly.
Miller says that minority Detroit-based contractors were told that they would get special consideration.
Evelyn addresses contractor complaints, specifically Adamo who said that he was having a hard time getting business. Miller agrees that he never saw any documentation to substantiate Adamo's claim of loss of business. Miller had said in direct testimony that Ferguson claimed there was bad blood with Adamo.
Also talked about Mike Farrow, a minority contractor in Detroit who had complained about loss of business. Evelyn says that his recollection is that Miller never investigated contracts relative to Farrow. Miller says he may have checked things out relative to River Front work. Miller says he met with Farrow a few times and he was happy with some River Front work. Evelyn says you addressed Farrow's complaints to a level he was satisfied with. Miller agrees.
Now talking about City Council addressing issues of multiple amendments and contractors exceeding limits for receiving contractual work.
Strangely, Jim Thomas, Kwame's lawyer, just asked for sidebar. And it's over in less than a minute. But Kwame just walked out. Must not be feeling well.
9:40AM Evelyn introduces a document that looks like it was taken straight out of encyclopedia. These are City Council minutes. Lists item numbers and dates for bid packages.
Looking at demolition for residential structures. This is for Farrow Group. Original estimate was for $547,500 and then an additional $200,000.
Lists another job for the Farrow group on November 14th 2004. Originally $609,000 but increased by another $300,000.
Listing another contract for Superior Engineering.
And then another contract for AAA Wrecking and Demolition.
And then another contract for over $1 million for ABC Demolition.
Other contractors who got work: Joy Construction, a minority contractor, Power Demolition.
There is one for Ferguson Enterprises for the demolition of 40 structures which is in line with the size of the earlier contracts.
Submitted by Audrey Jackson of City Purchasing.
Evelyn saying so it looks like there were a lot of contractors doing demolition business in Detroit. Miller agrees.
Kwame is still not back in the courtroom. Wait a second, he just walked back in.
Talking about a residential demolition where city picked the lowest 10 contractors. It was a lowest bidder process.
Looking at another exhibit. Signed by Amru Meah for demolition contracts. It was an investigation into complaints being made. 22 vendors had submitted demolition bids. Bids submitted in November 2003. This is a response to a petition by Sheila Dapremont when she did not get a contract.
Discussing the hold up on 1361. Miller says he never saw a document that said that 1361 was being held up. Miller had said that the contract hadn't been awarded and didn't know if it was a hold up from the previous administration. this is the contract that Inland Waters was waiting for.
Looking at an interoffice memo for the DWSD referring to contract 1361. Evelyn says that this contract was an extension of Inland's contract 1325. Miller says it looks like there were 2 simultaneous contracts.
Evelyn says but it says there is a need for 1361. Miller confirms that it looks like there is a need for work. Document is from January 2001. 1361 was not approved until April 2002.
10:00AM Looks at summary of payments. Contract 1325. Original estimate was for $12 million and the actual amount to Inland $27 million. Also looking at contract 1368 for Inland that was originally estimated at $50 million.
Looking at fax cover sheet for invoice on contract 1368. From March 2002. The amount was for $291,250.
Looking at another DWSD internal memo from April 2001 not approving the invoice for $291,250 because contract 1368 had not yet been approved by City Council at that point.
Looking at a list of invoices and payments regarding 1368. Evelyn saying that the city has a reputation for taking a long time to pay invoices. It looks like Inland submitted invoices monthly and that they were paid monthly as the remaining balance was only about $4 million.
Now looking at actual record of payments to Inland from DWSD. Again demonstrates regular invoicing and payments. Evelyn says this was unusual because most contractors complained about not being paid regularly. Yes says Miller.
Now talking aboout Lakeshore contract 849 that involved Insituform and Lanzo. Looking at Bernard Parker III's email from February 1st 2005 to his associates at Insituform where he discussed meeting with Miller on contract 849. Miller agreeing that this would not have been unusual.
Email also talks about future opportunities for Insituform with the city of Detroit. Miller says he may have discussed future opportunities but doesn't recall that right now.
Edna Bell was with Parker at the meeting with Miller. Bell says that Bell was a consultant for a number of companies. They discussed the outfalls contract and how Insituform wanted a piece of it and asked for it to be rolled into 1368.
In the email, Parker says he reminded Miller of the last difficulty they had when they last dealing with Lanzo. Miller doesn't recall what the Lanzo situation was. Evelyn says that Parker seems to be suggesting that Lanzo doesn't do as good sewer lining work as Insituform. Miller agrees that appears to be so. But witness doesn't remember discussing that specifically with Parker.
Memo says that Miller contemplating giving 7 of the outfalls contracts instead of just 3. Miller doesn't remember that but says in meeting like this, the contractor would do most of the talking and he would go back and check with Victor Mercado and others. Miller again says he doesn't recall saying he'd give 7 contracts.
10:20AM Evelyn says the memo doesn't say he has to talk to mayor but to the DWSD. Miller agrees that's true.
Miller says he recalls the part of the discussion where Parker says what would happen if they removed themselves from their association with Inland. Inland had been discussing forming their own sewer lining company that would have eliminated their need for Insituform. Miller recalls assuring Parker that he would still get work with the city.
Apparently, the email basically ended saying that Miller had assured Parker that as long as they continued doing good quality work they would still get work from the city.
10:25AM Taking our 20 minute break.
10:55AM Quiet morning thus far in court. Basically Evelyn has tried to demonstrate that other contractors were getting business alongside Ferguson. Also, those other contractors seemed to get special treatment so the city wasn't necessarily being preferential with Ferguson. No heated, testy exchanges between Evelyn and Miller like with Thomas and the witness on Friday. Lawyers go straight to sidebar with the judge. Evelyn asking if Tony Soave was another person who could get in to see the mayor on short notice. Yes says Miller. Looking at Lakeshore Engineering bid proposal from December 22nd 2004 to DWSD. Both Lakeshore and Ferguson Enterprises were supposed to get 36% on the contract. This was for the 10 outfalls contracts that Miller had discussed giving about 7 to Insituform.
Now on to Baby Creek, PC 748. Email from Ron Hausmann to John Rakolta both of Walbridge. Sent on February 6th 2003. Hausmann says that based on equalization credits it looks like they have a job. Looking at raw numbers and then the adjusted numbers which give Walbridge the lowest bid. "Because this will be a real dog fight, you should know. There is no protocol nor precedent that this city has for this and frankly they're way over their heads on this," writes Hausmann to Rakolta. February 10th 2003 from the city to Scott Penrod of Walbridge notifying him that Walbridge is the lowest responsive bidder with $69 million. Signed by Dan Edwards and copied to Audrey Jackson. Text exchange February 7 and 10 2003
Miller: Call me 5104781
3 days later Ferguson responds. Evelyn saying is it was a big deal why would he have waited 3 days.
Email dated February 11th 2003 from Daniel Edwards of the DWSD to Gary Fujita of the DWSD alerting him to 3 bid protests with 748 that are with Audrey Jackson. Edwards left a message with Audrey asking about what course they will be taking. At this point can't say who is the lowest responsive bidder. Holding package until all protests are addressed. Evelyn saying this is different from what Hausmann is saying about having 748. Fujita responds. "If for some reason, a miracle occurs and the protests go away, we have a special Administrative Order." Email from Edwards on February 12th 2003. Says it looks like Jackson will be addressing protests herself so the delay may not be as long as anticipated. And Walbridge is still the lowest equalized bidder.
11:15AM Email from Bernard Parker who is at Walbridge at this point. February 12th 1003 about 45 minutes after previous email. Says he spoke to Edwards who said that Jackson will be addressing the protests.
"I believe this is a great sign given that Ms. Jackson concurred with the original finding from DWSD in favor of WA." Basically Evelyn saying that Ferguson was only one to have special access to the administration. Parker did as well. Looking at document which discusses why bid proposals on 748 were delayed from October 31st 2002 to February 6th 2003 due to an infringement claim.
Evelyn says it claims that the Special Administrative Order is being used because of the delay. Not because Kwame is doing any special favors. Signed by Victor Mercado. Kwame signed Special Order in April 2003.
Talking about a Tyrone Clifton, one of the staff members at the Detroit Building Authority (DBA) and Robert Hill also with DBA. Evelyn says Hill is one of most knowledgeable at DBA. Miller says he doesn't know.
June 19th 2003 DBA meeting minutes where Heilmann project was approved. Talks about contract being awarded to White construction/Xcel Construction in April 2002 to complete a $1.3 million contract at the Cobo Center. Ask for additional $900,000 to bring up to $2.2 million. Ended up having $338,000 left over.
Hill says that White construction/Xcel did an excellent job for coming under budget. The same minutes discuss the Heilmann project. Miller doesn't recall voting on the project. Looking at email to Insituform from Bernard Parker on January 6th 2005 where he discussed talking to a high ranking official in the Kilpatrick administration.
Parker testified in the trial that the "high-ranking official" he was talking about was Ferguson. Evelyn asking if the high-ranking official could be Miller. Miller says he couldn't say that it was. Evelyn says that there is a part about needing to reassess their corporate citizenship. Miller says he couldn't say it was. Evelyn asks how many times he met with Parker. Maybe half a dozen. Miller says he did take a number of calls.
11:35AM Email from Parker on April 18th 2007 asking Walbridge for the Earthquake Concert tickets to go with Derrick Miller and his wife. Miller is saying he is pretty sure he didn't go but it's possible that he did. Witness says he did go out socially with Parker but can't recall the instances. "I just don't remember me and my wife hanging with he and his wife. It's kind of foggy," says Miller.
Miller saying possibly they went to baseball games together. Talking about the time he was asked to stop by at the Mosaic Restaurant when Ferguson was meeting Dennis Oszust of Inland. Miller testified that Ferguson asked him to show up to illustrate Ferguson's connections to the city. Miller can't reconstruct the conversation with Ferguson. Says Ferguson either called or texted him that same day. Can't say how long before he showed up he was contacted by Ferguson.
The government objected to a document that Evelyn has so he can't show the courtroom but can give it to Miller to look over so that he can testify about it. December 16th 2005 report about a meeting for Ferguson to discuss 1369. Asking if there is anything on the document that might refresh the witness's meeting about contract 1368 in December 2005. Evelyn saying if Ferguson met in December 2005 to discuss 1369 then maybe 1368 was not the subject of the meeting at Mosaic that occurred around the same time. US Attorney Mark Chutkow objects saying that witness doesn't recall. Judge sustains.
The most interesting thing thus far today is that there is a banana peel on the floor of the men's restroom on the 2nd floor that Channel 7's Ross Jones almost slipped on. Talking about Book Cadillac renovations. Detroit Economic Growth corp and Detroit Downtown Authority involved in the project. Miller saying that project was hard to get off the ground because of financing. Looked at non-traditional sources. Miller says Kimberly Clark became a developed in the project.
Evelyn saying that book Cadillac is a successful edifice. Miller agrees. Kimberly Clark withdrew because a $25 million shortfall was discovered and the city refused to eat the shortfall. Miller agrees it was an embarrassment for the city. Miller agrees they were taking a lot of heat. Evelyn says so the project stopped and was rebid. Yes says Miller. Ferchill took over the project.
11:50AM Miller can't remember who the construction manager was when Ferchill took over. Thinks it may have been a joint venture with Walbridge.
Evelyn approaches the witness to show him a document.
Chutkow objects to document.
Judge says that the document is not in evidence so that Miller can't say what is in it. Can only be used to refresh his memory.
Miller recalls something about a dispute occurring when it was rebid. Evelyn says Ferguson had an interest in the project but almost all contractors did. Miller agrees. Evelyn says Ferguson bid like everyone else. Miller says he knows that Ferguson worked on it but doesn't know what part. Miller says that the project was competitively bid and Ferguson was selected.
Miller can't recall the rankings on the bids.
Miller saying he had a financial relationship with Tim cook of Jones Lang Lasalle. evelyn saying that Miller got paid for introducing Cook to people like Cassandra Smith-Grey, onetime director of the Housing Commission. Miller saying they talked about it but doesn't remember if he was paid. Introduced Cook to Gerard Phillips of the Human rights Department. Evelyn says he told feds he got paid several thousands for the introduction. Witness says it's possible.
Property at 151 West fort Street where city did training. As head of IT, Miller wanted to move into that location. Cook wanted to be introduced to Frank Torre. Evelyn says Miller told agents that Cook wanted an equity interest in the building and that he wanted a part of it. Miller says he doesn't remember that exactly. Miller says 151 West Fort street ended up being redeveloped.
Miller introduced Cook to Torre. Miller says he doesn't remember talking about sharing equity interest with Cook. Evelyn says isn't that the way it worked out with Cook, you helped him and got paid for it. Yes says Miller.
12:05PM Evelyn ready to move on to Andrew Park. Judge says let's take a 5 minute break.
12:15PM Evelyn asking about Andrew Park and Asian Village. Also asking about Scan contracts for interactive screens in downtown Detroit that did not go well. Miller saying that Scan payments be submitted to the grant administrator. Evelyn says phase 1 was planning and that Miller advanced $472,000 to Park so that he could complete it. Evelyn says Miller authorized full payment of Phase 2, installation, was done. Evelyn says that Miller even paid for phase 3, training, before phase 2 was even finished. Miller saying he was gone at that point.
Miller says that Park did get the $4.5 homeland security grant. Talking about Comsat which was associated with Scan project. Evelyn says that Comsat pulled out because Scan was having financial problems and that was why it collapsed. Miller agrees.
Evelyn saying that Pangborn and Park offered him a third interest in Scan. Miller says not a third but offered him to be part of project.
Miller acknowledges he took money for his participation in Scan. Evelyn asking about the plea deal with the government. Evelyn says Miller has not yet been sentenced. Miller agrees. Evelyn says that one of the provisions is that before Miller talks to anyone else about his testimony, he must discuss it with federal agents. Miller says he would talk to his attorney and let him handle it. Another provision, says Ferguson, the guideline will make the sentencing call. Miller agrees.
With regards to the guidelines, the government can make a call to ask for a reduction. It's exclusively up to the government to decide based on his performance in the courtroom will they provide the motion. Miller says that it correct. Evelyn asking about conversation Miller had with Victor Mercado after he left city government. Miller testified about the pressure he was under from Ferguson. Evelyn asking about warning he gave to Mercado about trouble with law enforcement. Evelyn says and you were involved in bribery and illegal dealings and you are going to warn Mercado. Correct says Miller.
Evelyn is done.
12:30PM Chutkow redirects. Asking about his understanding of testimony under plea agreement. Miller says it is not his intention to make anyone happy but to tell the truth as he knows it. Chutkow asks if government asked him to tailor his testimony. No says Miller.
Miller understands that ultimately the judge makes the sentence and can agree that the judge can assess herself the level of his cooperation. Chutkow asking about checks from Rutherford to Kilpatrick Civic Fund being disclosed by mistake.
Miller says during the process of filing paperwork it was a mistake by whoever did that to disclose the donors because they had decided not to. Miller remembers discussing it with Kilpatrick, Christine Beatty and William Phillips. Phillips was the one to mistakenly disclose it. Kilpatrick was upset when he found out and says that Phillips had messed up and hadn't needed to do it. Miller saying that he didn't say his family was the one priority because other things were equally important: happiness, enlightenment and atonement. Miller says this case has impacted his family life. "My wife and I are divorcing," says Miller on how the trial has impacted him.
12:34PM Jim Thomas, Kwame's lawyer, re-crosses. Thomas asks if any divorce papers have been filed. Miller says they have not. Miller says they have recently retained lawyers. "It has only been necessary recently," says Miller. Miller says that when he first starts cooperating with government there was talk about separation. Miller says they did separate.
Thomas asking if at that point he decided that his family wasn't important to him. Miller says that he doesn't use a hierarchy to prioritize what is important to him. Miller says this case has heightened his faith. Miller agrees that his son is as important as his faith.
Thomas asks if Miller thinks if his marriage is as important as other things but not the most important thing. Miller says it is equally important. Miller says that is not the way he thinks, doesn't prioritize things. Thomas asking if getting money was equally as important. Chutkow objects as argumentative. Judge sustains.
Thomas asks if Miller went to church. Miller said he didn't go to church. Thomas asking if his faith was as important as his child. Miller says yes. Miller says, "I didn't go to Church. I'm not Christian." And we are done with Zeke. He is being escorted out of the building by the FBI.
12:41PM Chutkow bringing back FBI agent Bob Beeckman. I look at this man and just think text messages are coming our way.
Talking about timeline of events after contract 748, Baby Creek, had been awarded. Text message June 17th 2003. Vincent Anwunah, first level supervisor at Detroit Recreation Dept. Involved with Patton Park. Ferguson is also involved in exchange. DWSD provided money and Rec Dept. provided Patton Park on Baby Creek.
Anwunah: They want Walbridge to collect 500,000 of this contract what do you think?
Ferguson: Hell no that's 5% they are crazy. 2% f**k them and Walbridge that's theft.
Anwunah: OK Ferguson: You were right they got a deal going this is bullshit.
Anwunah: The guy insisted that they must pay them 5% and you have to submit your price to them as the general. I told them to tell them they can be paid not more than 2.5% and also should allow FEI to put a team together the I will be.
Chutkow asking Beeckman if he has reviewed DWSD records related to this case including Patton Park. Yes says Beeckman.
Beeckman says he has also reviewed records at the Recreation Department. Beeckman says Jon McGrail was in charge of the Patton Park project at the DWSD. He was a supervising engineer. Anwunah was the supervisor from the Rec Dept. Since the DWSD was providing the funding, they had some say over how the Patton Park project was run.
Beeckman says "the guy" referenced is McGrail.
General contractor on this contract was Walbridge.
Text on June 20 2003. Ferguson: can I talk to Carolyn about babycreek and the rec and dwsd in more detail so she can talk to victor and he didn't here black.
Carolyn Williams-Mesa was in charge of Rec Department.
Victor is Mercado and "black" is nickname for Kwame.
Mayor: yes. He heard. I didn't tell him about that yet.
Looking at letter to Ferguson in response to letter on contaminated dirt on October 1st 2003. Brian Cruikshank from Walbridge is the sender of the letter. Letter says that Ferguson was 4th lowest bidder and Walbridge was pressured into giving work to Ferguson. Letter goes on to say that WPM lost work as a result. Text on October 1st 2003 Ferguson: FYI if gary torgo calls about me not calling him back it’s because of him not paying feel for the parking garage. Torgo is real estate developer. Amru Meah, was DBA director.
Mayor: Cool. How much does he owe?
Ferguson: It’s his team. They are disputing $57,000 for work we covered on Mack and Woodward. Typical white folk shit. When we talk I tell what Walbridge’s people are trying ant shit change I just (expletive) with some power thou. lol!
Beeckman says that the government removed what Ferguson actually said. Mayor: TRUE! And we are done for today. Judge says that tomorrow and Friday we will be ending at noon.
1:05PM Court resumes tomorrow at 9AM.
About the author
Alexandra Harland is a Princeton undergrad and has a masters degree in International affairs with Columbia. A Montreal native, she worked with the Daily Telegraph newspaper for a few years before transitioning to TV, when she worked at ABC News with Peter Jennings. Alexandra has also worked in newsrooms in both Detroit and Boston.