Jim Stapleton, a consultant for D'Alessandro, was at a meeting with witness D'Alessandro and witness. One of the first meetings was about getting Bobby on the team, Angelo D'Alessandro wasn't so excited about it but witness said he didn't care. Ferguson appeared to have stronger relationships than they did. D'Alessandro had been on the team of cancelled $10 million contract.

Fergsuon was going to get a third percentage of profits with a third for Lanzo and a third for Lakeshore. They went ahead and submitted proposal to water department.

December 22nd 2004 proposal submittal from the Lakeshore team to Darryl Latimer at DWSD contracts. 80% of the combined personnel of the team was from Detroit. Lakeshore Engineering would provide performance and insurance bonds. Signed by Tom Hardiman.

As construction manager, Lakeshore was the quarterback. Lanzo provided information to help put the proposal together. Witness says he is not sure what Ferguson did- Rachmale would be better equipped to answer that question.

10:48AM Looking at a letter of intent of DWSD contract to be awarded to Lakeshore on March 24th 2005. Letter is from Victor Mercado addressed to Hardiman. Letter advises Lakeshore that they get contract DWS 849. The letter authorizes them to begin work immediately.

At this point, there was no formal contract with Ferguson and Lanzo.

There was a meeting with Jim Stapleton, D'Alessandro and Ferguson. D'Alessandro and Ferguson overlapped in some of their skills. Turned out to be a source of conflict. they were breaking down line items. D'Alessandro said that if Ferguson took those line items he wouldn't have any work to do. There was a conflict between Ferguson and D'Alessandro on work to be done. Witness said that it didn't matter who did the work but if it came down to him and he had to make a choice then he would have to pick it.

Outfalls contract was for $20 million. Witness says that he told them \he would choose Ferguson because when Ferguson hadn't been on the team, didn't get the contracts, when he was on the team, they got a $20 million contract.

Ferguson told Hardiman that he wanted the line items. D'Alessandro approached Ferguson with a figure of $400,000 to $500,000 that he would give Bobby for the job. Ferguson said no he could make more money. Ferguson was then offered $1 million for no work so that Lanzo could actually have some work.

Looking at subcontract agreement between Lakeshore Engineering for contract 849. With Contractor DCG.

In September 2005, there were contracts that Hardiman spoke to Ferguson about. One was a change order to 849, the outfalls contract, for an additional $6 to $8 million to do work. There was also an asbestos contract, hazardous material to be removed before work is done, a specialty of Lakeshore Engineering. The contract was for $1.5 million.

11:02AM Witness approached Ferguson about the 2 change orders. Knew Ferguson had the relationships and wanted to make sure they weren't blind-sided like with the $5 million and $10 million contracts. Witness told him they didn't want any problems. Ferguson says "OK."

Ferguson wanted 5% on the contract change orders in order to leverage his relationships with the powers-that-be on the contract. For change orders on outfalls contract, it would have been an additional $375,000 paid to Ferguson and on the asbestos contract Ferguson would get $75,000. So $450,000 total. Witness says as a contractor you never want to pay anyone if you can avoid it but he felt it was important to remain in a good relationship with Ferguson.

Hardiman says Ferguson called him one day and said he needed $25,000 "Today." The witness thought Ferguson meant cash and he panicked so he took $25,000. Said he did not want to upset Ferguson because he had relationships with key individuals in the city. Witness went to meet Ferguson at his offices with $25,000 in cash. Hardiman said he was nervous as he had never had that much in cash on his person.

Hardiman says when a subcontractor asks for payment on a balance there is usually a billing process but "Again, I did not want to upset Bobby Ferguson."

Looking at invoice to Johnson Consultant Services spelled as "Consultant". There is a correction on the top. Lists Bobby's office address on Wyoming. customer listed as Lakeshore Engineering, Lists work as Labor (inspection, management services), air equipment and materials. Marilyn Johnson is Bobby Ferguson's wife. Witness says he did not have contract with Johnson Consultants. Hardiman doesn't remember anything about involve except total of $450, 000, which looks a lot like the 5% fee to be paid to Ferguson to make sure that the change orders went through. Less payment received, $25,000, the cash that the witness took to Ferguson Enterprises. Balance is $425,000. Witness says he doesn't know anything about the services provided described on the invoice.

Hardiman says he can't remember if he paid the $425,000 balance. Ferguson got over $1 million for the outfalls project which he did no work for. Also did no work on the change orders for outfalls project. Ferguson did no work at all on the asbestos contract.

Lakeshore engineering didn't cut checks to Ferguson- it was Sky Group, Lakeshore's real estate holding company. The reason for that was because they didn't have contract with Johnson Consultants. They didn't want their own back office talking about payoffs to Bobby Ferguson. "Didn't want our employees out in the streets saying we were paying Bobby Ferguson." Hardiman didn't want word to get back to Ferguson and have him be upset with that. Hardiman didn't want to take a chance that their employees would talk about paying John Consultants so moved it to Sky Group.

Witness says "I didn't want Bobby to come back cussing."

11:18AM Looking at email for invoices from Johnson Consultants.

11:23AM Judge says this would be a good place to break.

11:46AM Session starts back. Chutkow asking about the $1 million plus payments to Ferguson. witness says it was paid out over time. Hardiman can't remember exact sequence of payments. Ferguson would either says he would bring an invoice by or call.

Lakeshore would submit invoice to the city, it would go through various departments and then they would get paid. Ferguson would come to Hardiman around the time they would get paid by the city. Ferguson would come to the witness without the witness having to tell him he had been paid by the city.

Sky Group, the property management company, made most of the $1 million plus payment to Ferguson. Witness says over time Ferguson and he have numerous conversations and Bobby would know when the witness had been paid without him telling him.

Hardiman had contracts 2014 and 865. On 2014, witness had discussion with Ferguson about change order that was coming.