Kilpatrick on Trial: Updates from courtroom

Witness: Millions of dollars went to keep Bobby Ferguson happy

Published On: Nov 15 2012 09:53:57 AM EST   Updated On: Nov 15 2012 05:39:49 PM EST
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DETROIT -

9:15AM Court starting late again this morning as the judge and attorneys met in chambers having a discussion about again moving the witness stand. 

Court is now in session. 

Former Lakeshore executive and Detroit contractor Thomas Hardiman is again on the witness stand.

Two weeks ago, Hardiman testified for the government, admitting that he would give bribes and payments to Bobby Ferguson, Hardiman says he was extorted by Ferguson for the payments.

Hardiman is a key prosecution witnesses, as they try to make the case that Ferguson, Kilpatrick and Bernard Kilpatrick used Detroit’s City Hall to run a criminal enterprise. 

Hardiman says he had to pay off Ferguson and when he didn’t his firm lost out on millions in city water department contracts to fix water mains, etc. 

Hardiman has spent several days back on the stand to be questioned by Ferguson’s attorney, Gerald Evelyn.

When Evelyn asks Hardiman direct questions, Hardiman often answers that he doesn’t remember, perhaps giving the jury the idea that Hardiman has a selective memory. 

This morning Gerald Evelyn began:

“We’re going to try to finish this today if we can.” 

Thomas Hardiman: “Thank you.” 

Hardiman says he is here as a government witness because he was subpoenaed to testify. Evelyn says Hardiman is here because he received a deal from a government for his testimony. 

“Idiot.” 

Ferguson began calling Hardiman an “Idiot” in their dealings.

“We argued at times.” Hardiman testified.

“Mr. Ferguson talked to you about getting paid for various things, yes?” Eveyln asks.

“You paid people when you had to, but you didn’t always want to do it.” Evelyn suggests.

“I don’t remember, Mr. Evelyn.” Hardiman says. 

Evelyn says Ferguson mentored Hardiman’s son, Johnny.

Hardiman says the two did talk. 

The two often spoke about work ethic, Evelyn suggests and Hardiman agrees. 

Hardiman agrees that Ferguson was hired by Lakeshore because of his experience and ability to “navigate” the jobs with the city. 

Judge Edmunds is getting frustrated, directing Evelyn to re-direct his questions about Hardiman’s testimony, not “re-plow” issues they’ve already covered. 

9:45AM

Now, a pause in the action.

The judge is playing host to not one, but two “sidebar” sessions at the bench. 

All attorneys are meeting to discuss a concern.

These are issues not shared with the jury.

The jury has to sit there and wait until the issue is resolved. 

This could be the government objecting to Mr. Evelyn questioning Mr. Hardiman about issues that he’s already gone over. 

Okay, here’s the explaining of what’s going on from the judge: 

Judge Edmunds tells the jury that Exhibit DLS-129 was offered and the government objected. The judge sustained the objection and that document will not be shown. 

Ferguson attorney Evelyn is now showing a document on the screen in the courtroom. This is a document that the the judge will allow into evidence. 

It’s a CERTIFICATE OF LIABILITY INSURANCE 

Zervos Group, Southfield Michigan is listed on the sheet. 

Ferguson Enterprises is the insuree. It appears to be for $1,000,000. 

The holder of the certificate is Lakeshore Engineering. 

Date: 1/14/09 to 1/12/10 

Ferguson provided the insurance to Lakeshore for that particular job that Lakeshore had a contract for and hired Ferguson to help out with. 

Another document: This one is an email sent in 2009. 

From: Ms. Ware with Ferguson Enterprises 

To: Colt Odeh with Lakeshore 

“Please confirm that this work will be direct work between Lakeshore and Ferguson Enterprises.”

It’s a request for a quote for work. 

Evelyn: “Your company was still doing business or attempting to do business with Ferguson as late as 2010, is that correct?”

Hardiman: “Based on this there appears to be communication between Lakeshore and Mr. Ferguson, yes.” 

Hardiman says by 2007 he was not intimidated by Ferguson.

He says Ferguson could do the work that was needed.

Eveyln again tries to bring up earlier testimony that in on case, Ferguson “came to the rescue” of Lakeshore by fixing a broken water main in the city. 

And now the government is asking for another sidebar.

Back in business: 

Time for the government and federal prosecutor Mark Chutkow is again questioning Thomas Hardiman. 

He asked one question and now Hardiman is done! 

He’s left the courtroom. 

Next witness: 

Avinash Rachmale

Chairman of Lakeshore

Rachmale

10:29 AM: Did you know Mayor Kwame Kilpatrick? 

Rachamale says he supported the mayor, helping him get elected and served on team to help the mayor get up to speed on the massive Detroit Water Department and it’s needs. 

Rachmale is a “big fish” testifying for the government today.

He started his water contracting company and it has grown into a massive company that has offices in many countries working in water engineering and environmental work.

It’s based on Woodward Avenue in Detroit.

Rachmale and Lakeshore actually took over a vacant building. 

Rachmale gave a $25,000 check to the Kilpatrick Civic Fund. 

The jury is now being shown a photo of a sewer under Jefferson Avenue leading to Gross Point.

It’s sewage and storm water line that is twenty feet wide. It’s a huge, old and crumbling in this photo.

The water is taken right out to the Detroit river. 

This is to show the scope of Rachmale’s hard work and expertise, improving a massive water project like this for the people of Detroit.

Rachmale is a self made businessman and engineer. He’s expected to testify that he and his company became of victim of Kwame Kilpatrick & Bobby Ferguson’s alleged scheme to get rich off of the hard work of people like him. 

The indictment reads that Rachmale’s company was allegedly extorted by Ferguson to the tune of more than $12 million dollars.

Rachmale’s former partner, Thomas Hardiman already testified that he eventually went along with that extortion because Lakeshore was scared that if they didn’t play ball with Ferguson, that Ferguson would stop them from getting any more work from the city. 

The contracts Lakeshore did get from Detroit and it’s taxpayers are in the tens of millions of dollars to work on Detroit Water and Sewerage Department improvements.

10:46 AM: The Kwame Kilpatrick trial is taking it’s morning break.

So far, Avinash Rachmale, founder of the giant water engineering and contracting firm Lakeshore is on the stand. 

The government is working to establish Rachmale and Lakeshore as experts in their field and one of only two Detroit companies in the area prior to the Kilpatrick administration that could accomplish high tech sewer work in the city.

11:05 AM Chutkow direct on Avinash Rachmale - Proposal for CS-1361 shows LES was 100% Detroit Based Business.  Partnered with Lanzo who was one of the few companies with the expertise to install the outfalls lining in February 2003.  Further documents demonstrate the DWSD (Victor Mercado) approved LES for contract 1361.  

Rachmale testifies Bobby Ferguson asked Hardiman for 25% of CS-1361.  Not only was Ferguson not a part of the bid proposal or base contract, Ferguson was actually partnered with  inland waters, a competitor on the 1361 bid.  

Rachmale offered 10% of the contract which would require the other contractors on the bid to loose some of their work. 

Hardiman indicated to Rachmale, after a meeting with Ferguson, that Ferguson was not happy with 10%. 

When asked why Rachmale offered anything to Ferguson when he wasn't on the proposal team, his response was Ferguson had many contacts with the Kilpatrick Administration. 

Time past, and the contract seemed to be stalled - Rachmale met with Bernard Kilpatrick who asked to be retained by LES.  He paid $2,500 to Bernard and got nothing in return. 

11:28AM Side bar - hearsay issue again.

CM-1387 ($5 million) contract which was bid around the same time as CS-1361 ($10 million) was pulled by the DWSD. 

Rachmale was dumbfounded by the cancellation of 1387 but was still hopeful because CM-1361 was approved.  LES was a small company in 2003 and it was a huge loss.

June 11, 2003 Rachmale wanted to meet with Victor Mercado over the projects, but two week later Rachmale received a letter from DWSD (Victor Mercado) cancelling 1361. 

LES had hired people for these projects and it was "devastating" to loose the contracts. 

Rachmale was "scratching his head" over the loss and couldn't even come to work for a while.

Rachmale considered leaving Detroit, but stayed because this is where he landed when he came from India and he went to school here.

Rachmale regrouped, decided he didn't have the right people on his team when he found out the contracts were awarded to Inland Waters.  Bobby Ferguson was on the Inland Waters Team, so Rachmale decided to team with Ferguson.

11:52 AM - 5 min break.

12:06 PM We're back - Judge advises the jury on hearsay again. 

Rachmale explains it was his feeling that if Bobby Ferguson was part of his team, he would not have lost the two bids 1361 and 1387.  He further explained he didn't need Ferguson for his construction expertise, but rather his connections with the Kilpatrick. 

So, for the next project Rachmale and Hardiman discussed including Ferguson.  

Along came CM-849 and LES offered FEI a sub contractor role along with Lanzo.  Ferguson wanted 1/3 of the contract which Rachmale explain is "unusual" for an excavator. 

Normally, excavators get only around 20% - and LES could  have used Hayes Construction.   

Rachmale agreed to the high amount because of the loss of 1361 and 1387 ($10million; $5million.)  

LES never used Hayes Construction again (which was a minority owned Detroit Based Business) and ultimately Rachmale testified Hayes went out of business. 

Rachmale did not feel FEI's construction expertise and experience did anything to improve LES resume or capabilities. 

The project stalled because Ferguson wanted "line items" that were designated for Lanzo Lining.  LES mediated the dispute between the subcontractors and it was agreed Ferguson would get $1 Million as a "consultant" to Lanzo. 

Rachmale did not feel the million dollars to Ferguson was right, but Rachmale had to keep Ferguson happy and he did not want to loose the contract($10 million $5 million.) 

Ferguson did not have to perform any work for the million dollars. 

1:07 PM

Rachmale explained Ferguson also wanted 5% of all change orders.  One of which was an asbestos abatement contract that had nothing to do with Ferguson.  LES paid Ferguson because they did not want to lose the contract.  

Ferguson asked for $25,000 from Hardiman, who in-turn told Rachmale, who collected cash and Hardiman delivered it on the same day.  Again, they did not want to upset Ferguson. 

LES received an Invoice from Johnson Consulant (suppose to be consultant) this is a company owned by Bobby Ferguson's wife for $450,000.   Rachmale testified no services of any kind were ever received from Jonhson "Consulant."  The $25,000 cash payment was subtracted from the total amount on the invoice. 

Checks from LES to Johnson "Consulant" were presented to show the balance of the invoice was paid. 

One of the checks for $155,700 was written from Sky Group Grand.  Rachmale explained that was because he did not want his employees questioning why checks were being written to a company they did not have a contract with.  Sky Group Grand is the property management part of Lakeshore and Rachmale could control who could see those checks. 

Done for the day