DETROIT - 9AM
On the witness stand, Kim Harris -- Chief compliance officer, Detroit Human Rights Department
He's being questioned by U.S Attorney Michael Bullotta.
They're discussing the May, 2006 conversation Harris had with his then boss, Gerard Grant Phillips with Detroit's "Human Rights Department."
Phillips was talking to Harris about "pulling DLZ's water department contract."
"He was kind of nervous. He walked around in circles. He seemed nervous and fidgety." Harris testified.
Bullotta: "By pulling, you felt the contract process was being tampered with?"
5/16/06 The city had the number one ranking over 6 other contractors, meaning it was the top pick for the city to award a water department contract to.
It was ranked to be the best use of the city's money it collected from water bill payments from residents and tax money.
Harris says he was told to yank the certification of DLZ that gave it points for being a "Detroit Based Company."
DLZ is headquartered in Ohio, but Detroit found that it also could be considered "Detroit based." It is also a minority-owned company. DLZ has a local office as well.
DLZ was certified by the Human Rights Department of the city of Detroit as a "Detroit Based Business."
Once DLZ had it's status yanked, it dropped in the rankings and a firm connected to Bobby Ferguson got the contract.
Harris testified yesterday that his boss told him "The mayor wants it done."
Harris says the certification for DLZ was pulled, the contract was lost.
Later, the certification was then reinstated. Detroit again saw DLZ as "Detroit based."
Harris says he wanted no part of what was going on with DLZ:
"It was just getting too goofy. The certificate was being revoked and then reinstated without any explanation."
Did you feel comfortable being a part of that? Harris: "No I didn't."
Harris says his boss reported to the Mayor and if the Mayor wanted to pull the certification of a company that boss could not stop then mayor Kilpatrick.
A document is being shown that DLZ was in the lead for the contract.
The final tally: DLZ dropped to 3rd and was not awarded the contract. Number one? DCI/Xcell, Bobby Ferguson's company and Lakeshore. Lakeshore's founder says he brought Ferguson on to jobs to make sure his company got contracts.
Jim Thomas/Attorney for Kilpatrick
2/1/2006 Certification that DLZ had a Detroit Headquartered
Thomas is showing Kilpatrick's 2003 Executive Order for the utilization of Detroit Based Businesses.
"All city departments and agencies shall encourage such businesses to participate in the bidding for their professional services contracts."
Thomas asks Harris if he understood "this was your charge?" Harris says, "I understood it, but that was not my charge."
"Who is Sharon McPhail?" Thomas asks. "Was she in the law department?" Thomas asks. Harris thinks she was corporation counsel at the time.
Harris says he complained to Phillips to complain about this "foolishness" involving having to yank a company's certification.
Thomas: "Gerard Grant Phillips isn't here today. He's not available? The reason is because, he's dead?!? Right?"
"No one else can verify what you said to him or what he said to you!"
Thomas is warned by the judge for being argumentative.
A memo is now being shown:
From Darryl Latimer with DWSD to Gerard Grant Phillips
May 5th, 2006 is the date of the memo questioning DLZ's status as a "Detroit based business."
Email being shown now to the jury.
From: Dan Edwards, DWSD
To: Kim Harris
Subject: "DHB Investigation of DLZ certification."
Harris is being asked if he remembers that DWSD asked him to investigate DLZ's status as "Detroit Based" despite the company being headquartered in Columbus, Ohio.
Thomas is grilling Harris if he thinks he did a "thorough investigation" to find out if DLZ did indeed deserve it's certification.
It's getting testy in here. This is as fired up as we've seen Jim Thomas.
Judge Edmunds jumping in to Thomas's quick-fire questions and answers: "Let him answer the question Mr. Thomas!
Thomas: "I'm trying to move it along."
Judge Edmunds: "You can't move it along by testifying."
Thomas: "Fine. I'll take my time."
"REPORTING LOG SHEET"
Now being shown by Thomas.
4/4/06 Human Rights Department
This is a log sheet unearthed by Kilpatrick's attorney from the Human Rights Department questioning the status of another company called Sigma.
Thomas is making the point that Harris's job was to investigate if companies claiming to be Detroit based actually are Detroit based.
The government objects and the judge says Thomas is off topic, big time.
Judge Edmunds tells Thomas how he can pose his question, and Thomas jumps on it: "That's a great question why don't you answer it."
The courtroom erupts in laughter.
"I'm not trying to shine up to you, judge." Thomas says.
Judge Edmunds: "Riiiiight."
Jim Thomas is working as hard as a defense attorney can work to push back as hard as he can for his client, Kwame Kilpatrick. It's a critical point in this trial. Harris has linked Kilpatrick to his direct involvement in killing off a company's chances at a big city contract so that Ferguson would get it.
The person who told Harris to make those moves is now dead. Who will the jury believe? Kilpatrick has a lot of years in prison staring him in the face. Kilpatrick looks bored stiff, by the way.
May 19th 2006 memo being shown stating that DLZ's status as Detroit Headquartered was "still in process." It's Harris's job to find out if this company deserved to be awarded points in the bidding process by having a majority of it's leadership and employees working in Detroit to give it a leg-up in the bidding process for water contracts.
Thomas says DLZ was located in the Murphy Building downtown.
The attorneys are holding a side-bar with the judge.
Edmunds says there are some documents they need to discuss as it relates to "admissibility" as it relates to this witness.
This break will be longer than usual, Judge Edmunds says.
There is a break in testimony now as both sides argue in open court over these documents.
Thomas, on the record is saying Harris's failure to look further into a company's certification is something Thomas should be able to explore.
This is giving key insight into Thomas's strategy.
U.S. Attorney Bullotta calls this a mini-trial and he objects.
Judge Edmunds: "This witness has testified that he did an investigation and received input from the law department. Whether they should have been certified or not is not this witness's responsibility!"
Thomas says he wants to show tax information showing that DLZ was not a Detroit business.
Edmunds says no. "Sorry."
Thomas asks to show a variety of documentation showing that DLZ wasn't Detroit-based and his request is rejected by the judge.
She says Thomas can stick to what Harris did at the time of the decertification.
"I've ruled now three or four times, I am not going to rule again." Edmunds tells Thomas.
During the break down on the first floor of the courthouse an observer of the trial indicated to Ferguson attorney Mike Rataj that: "your in big trouble!" referring to the current witness. Rataj retorted: "this ain't my first rodeo."
Back in the courtroom: Thomas on cross of Kim Harris; questions as to the certification of DLZ. Thomas is trying to show DLZ was not a Detroit Headquartered Business.
The judge has issues with this line of questioning because the witness has already indicated the human rights department and the city law department analysis at the time had approved DLZ, and Harris had no further involvement. For the purpose of this trial, DLZ could have it's headquarters on the moon.
The real issues pertaining to this trial are Kilpatrick telling the human rights department to decertify DLZ to improve Fergusons company ranking in the bidding for CM-2014.
Judge calls a side-bar.
10:56 - Thomas is still banging his head against the wall with this DLZ headquarter issue. Harris indicated the only controversy back in 2006 was the definition of a "Detroit Headquartered Business." At the time DLZ met that definition, later the city changed the definition. Harris was uncomfortable with the decertifying of DLZ.
The judge is encouraging Thomas to "move along."
Thomas, not moving on, asks if Harris is aware of complaints from other contractors as the headquarter location of DLZ. Harris was not aware of any complaints or actions from other contractors.
Again, the judge asks Thomas to "move along."
Thomas is finally done.
Next comes Ferguson attorney Susan Van Dusen - it was a bit unclear what she was talking about - but thankfully it was brief and she is now done.
Now we have John Shea, Bernard Kilpatrick's attorney - asks if Harris recalls meeting with FBI Agent Beckman this past summer. Harris remembers a discussion about contractor Jenkins following the rules for sub-contractors. This is in reference to later issues, but because the are not recalling Harris Shea wanted this information on the record.
Shea is finished, Harris is dismissed.
The Government calls Agent Carol Paskevich- Criminal Investigations Unit of the EPA. a text message from one of Fergusons employees K Merritt to Bobby Ferguson in 2002 indicated they knew Lakeshore was awarded 1361 and Marrett wanted to know if there was anything Bobby could do.
Memo form Detroit Water commissioners recommendation inland waters get the contract in 2003.
text from Ferguson to Kwame: "are you going to call victor today three of us will break bread later today." Kilpatrick "I holla at you later."
In another text, Kilpatrick tell Ferguson he is holding 1361 and will "hold it a long time."
Text show Derrick Miller had a meeting with Tom Hardeman and Miller was told by Kilpatricks assistant to be vague in his discussions about 1361.
CS-1361 awarded to LES was cancelled and the work was rolled into CS-1368 where the same work requested in the cancelled contract was performed by Ferguson for $20.8 million.
CM-2014 FEI received $3.3 million xcel (Ferguson) $822K CM-2015 FEI $13.1 million and xcel $3.5 million.
DWS-864 Xcel received $191K FEI $4.6 million and DWS-865 FEI $5.1 million.
5 minute break.
A juror mixed some medication and can't return today.
The judge expects they should be OK for next time. So, court has been adjourned until next week.
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