Kilpatrick on trial: Day 23

Published On: Oct 29 2012 09:42:50 AM EDT   Updated On: Oct 29 2012 02:36:19 PM EDT
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DETROIT -

NOON: Bobby Ferguson's attorney, Gerald Evelyn, fell ill during court proceedings. An ambulance was called. Court has been adjourned for the day.

9:02AM Looks like the gang is all there. The defendants are at the table and Bobby Ferguson is passing Kwame Kilpatrick his book of inspirational verses. Sounds like Judge Nancy Edmunds is about to enter the room and she is likely not in the best of moods today because of what happened to her beloved Tigers last night.

I'll get the fashion bit over with and let everyone know that Bobby is in a dark sports coat and brown tie and pants and Kwame is wearing a dark grey suit, bowtie and Clark Kent glasses as he reads his book of verses.

9:06AM Judge Edmunds enters the courtroom. Judge says Minock has filed a brief on hearsay issue on behalf of all defendant lawyers. Minock will address it after Tom Hardiman's testimony is over. Hardiman is the former Lakeshore Engineering executive who testified last Friday to his dealings with Ferguson.

Judge calls for a sidebar.

New in the courtroom today is Harold Gurewitz who is another lawyer for Kwame Kilpatrick. Gurewitz is one of the most prominent defense lawyers in Detroit and at one time represented former mayor Coleman Young. He was hired just before the trial began but this is his very first appearance in the courtroom since the trial began.

9:13AM Sidebar ends and jurors are called in.

Judge says hope everyone had nice weekend despite nasty weather and demise of beloved Tigers.

Judge introduces Gurewitz to the jurors.

9:15AM Mark Chutkow for government finishes his questioning of Tom Hardiman.

In 2008, after the text message scandal, Hardiman says that Ferguson's requests for money became more frequent. There was a certain amount owed to him at the time and he wanted it paid. This was over a 3 month period of time. Hardiman says that Ferguson didn't explain why he needed payments.

After Kwame resigned, Ferguson contacted witness once or twice about water contracts. Hardiman says A & H Contractors never had direct contract with DWSD, it was Lakeshore. Witness can't remember if he gave Ferguson additional work after mayor resigned. At the time, decided to treat him like any other contractor.

Lakeshore continues to win water contracts without Ferguson's assistance. Did not give Ferguson a percentage of work after the mayor left office.

After mayor left office, witness never paid for Ferguson's or Xcel Construction's consulting services.

Witness says Avinash Rachmale had previously been concerned with relationships Ferguson had with the city. After the mayor was gone, it was easier to say no to Ferguson says witness.

9:22AM Martin Crandall for Victor Mercado cross-examines.

Crandall asks if witness knew Ms. Levy, water director previous to Mercado? Knew who she was but never had direct relationship with her.

Witness also didn't know Charlie Williams, another former water director.

Did Mercado have a good knowledge of water department? It appeared that he had.

Was he always professional? Yes.

Did he appear to have a good knowledge across the board? It appeared he did.

You knew Darryl Latimer, assistant director of grants? Yes.

You knew 2 of 9 directors that answered to Mercado? Yes.

Did you know Awni Qaqish? Yes.

Were your dealings more with the lower levels than Mercado? That would be fair.

In your dealings with Ferguson, did you ever discuss perceptions of Mercado? I can't remember.

Did he ever refer to Mercado deragatorily? I can't remember says witness.

Did you ever hear Ferguson use a pejorative term when talking about Mercado?

9:27AM Judge interrupts and says we have to take a quick break for an emergency. Must be a juror again.

9:31AM Alright, so important correction. Hard to tell on the monitor but it would seem that Bobby Ferguson is wearing a blue pin stripe jacket, orange shirt and pants and came into the courthouse wearing a Tigers cap.

9:33AM Judge Edmunds is back in the courtroom.

9:34AM Crandall continues cross.

Did Ferguson ever use terms like slick man, untrustworthy and he's full of shit? I can't remember.

Do you know from your conversations that Mercado and Ferguson didn't get along? "Bobby's personality was one of challenge."

The meeting you had when Ferguson came to your home that was after you had been selected in your mind for 2 contracts for DWSD? Yes says witness. Which contracts were they 1361 for as needed sewer repair? Yes.

And 1387 was as needed construction? Yes.

You learned in April 2003 that you had been selected for those? I can't remember.

Crandall approaches the witness with a letter from Mercado to refresh his memory. Asks him to read it.

Chutkow objects saying that it is an unsigned letter. Judge overrules.

Witness not sure he remembers letter. Says it is addressed to Rachmale.

Is it fair to say both contracts were as needed contracts? I don't know.

As needed contract is one that might ward up to a ceiling but could award anywhere beneath it depending on needs of DWSD? Yes.

Later was your primary contact at DWSD? Yes.

Do you remember discussing these contracts with him? Yes.

Do you remember Latimer telling you in early 2003 that contract 1387 might be cut for cost savings? I don't remember that says witness.

Did you communicate with Latimer via email? I'm not sure.

Did he share emails with you? I'm not sure.

If I showed you an email from February 19 2003 from Latimer to Mercado about 1387 might that refresh your memory? No.

As director of DWSD are you aware of how many contracts Mercado had to deal with? No.

How many contracts did you have running with his at once- with Lakeshore from 2003-2006? I believe there were either 2 or 3.

And were they all mulit-million dollar contracts? Yes.

You are aware that the antiquated water system in Detroit was in constant disrepair? Yes.

You were not just main contractor but also sub-contractor on a lot of work? Yes.

Between 2002 and 2008, did you work with DWSD all those years? Yes.

You had multiple crews working on multiple projects during those 6 years? Yes.

Did you ever see anything that showed you the annual budget Mercado was working with? I may have.

Did you know he had a billion dollar budget for those things on any given year? Yes.

In your testimony you said that Ferguson was connected to downtown connected to the mayor? The mayor, Victor and various other individuals in the administration says Hardiman.

You don't even know if Mercado and Ferguson got along? I don't know.

Witness says Ferguson was able to call Victor.

Ferguson told you on the contracts 1387 and 1361 that they were on the mayor's desk? He said they had to go "across" the mayor's desk and he was talking about 1361.

You became frustrated on the contracts and went to many people? Yes.

Tried to get a meeting with the mayor? Yes.

That didn't work? No it didn't.

You called the mayor's mother. And that didn't work? Correct.

You called DeDan and Kandia Milton's mother? Yes says witness.

And that discussion didn't help? No it didn't.

You entered into contract with Bernard's Maestro Associates? Gave him a consulting fee.

And that didn't get you anywhere with the contracts? "They were still cancelled."

Were the mayor and Ferguson talking about you behind your back? Yes.

When the government showed you those text messages I assume you had never seen them before? No, I hadn't.

Text between Bobby and Kwame.

B: 1361 is the same contract, 1361 prices maybe less than the other one. but hey you know the rest.

k: COOL!

Witness says he does not remember that text.

Another text between Bobby and Kwame.

B: tom Hardiman lakeshore they called your mothers office on us. zeke just called me. ("zeke" is Derrick Miller)

K: Lolol!

B: you got to talk to dedan and zeke. this shit is funny about the shit the union and lakesure is saying. Hey I didn't know I would become the motherfucking man of the... The real man kk.

Is that the text the government showed him? Yes.

Crandall is done.

9:56AM Gerald Evelyn for Bobby Ferguson to cross-examine.

You were associated with Lakshore and A & H? Yes.

Lakeshore and A & H recognized the relationship between politics and doing business? Yes.

And you were interviewed by government several times starting in 2006? Yes.

Witness says he was interviewed several times.

You testified before grand jury May 25th 2010? That may be correct.

Several years after interviewed you are subpoenaed? Yes.

December 8th 2010 you testified again before grand jury? Yes.

So twice before grand jury? Yes.

You got limited immunity from letter? You are referring to letter from government asks witness. what date?

The letter is before second grand jury testimony says witness.

It was a form of limited immunity to protect you from being charged on things you might say? I believe so.

In March 15th 1006, the first interview, had to do with things with Ferguson and Lakeshore? Yes.

You told them that you had been involved in supporting Kilpatrick, that you had known the family a long time, about 20 years? Yes.

You had a fund-raiser for Kwame on direction of Emma Bell? Yes.

And Lakeshore reaised $25,000 from vendors? That figure seems correct.

One of the ways of getting business in the city is political support? I'm not sure. We were supporting Kilpatrick because we wanted him to be mayor.

You're saying it's coincidence that the vendors who donated wanted to get business? I'm not saying that.

Lakeshore got a lot of business from city of Detroit? Yes we did.

Over $150 million? I'm not sure.

You were Executive Vice President from 2002 and 2006? Yes.

So you were familiar with the revenue stream? A little.

You were responsible for economic development? Yes.

And you wanted to have a successful relationship with the city? Yes.

And you ended up having a very successful relationship? Well you gave me figures and relationships which is it.

Lakeshore became very successful. You were point person for business in the city of Detroit? Yes.

Revenues for Lakeshore in 2002 were $8 million? Yes.

And you grew to $154 million. That’s a big change isn't it? That's a big change.

Sky Group is a company that Lakeshore has? It's a separate group.

While you had ownership with Sky Group the Woodward building was purchased? Yes.

And you gave Kilpatrick to have campaign headquarters in that building? Yes.

Witness says the witness was not full at the time.

You told grand jury that supporting mayor's campaign helped business? I'm not sure says witness.

Evelyn gives him testimony. Witness says that's right.

You reasoned that this patronage with the mayor would help you have contracts? The name recognition would help yes.

You had intended to cultivate relationship with mayor for purposes of getting business? Yes says Hardiman.

It would be helpful to navigate the city through those relationships? Yes.

You start off having a contract and it can be cancelled. That's a problem right? Yes it happened to us says witness.

You know that sometimes people bid and they win and sometimes they lose? Yes.

You're competing against other people? That's right.

When trying to compete to get business you want to have every advantage? Yes.

You wanted to have name recognition? Yes.

That's why you had fund-raisers and leased an office to the campaign? We had fund-raisers to get the mayor elected.

Witness says he wanted exposure to the mayor by having his campaign headquarters in the Woodward building.

Didn't you tell agents that supporting mayor's campaign was to get business? Yes.

Bobby and Kwame are mouthing a conversation through this testimony.

Did you support the mayor twice? Yes.

And you told investigators that you never received special consideration? Witness says that he believes that it refers to conversation in 2002 and he said to the mayor he would never ask for special consideration from the mayor but if he ever ran into problems, he would appreciate being able to go to the mayor.

You indicate that you supported him financially in 2002 and 2005? That's correct.

Mayor invited to have campaign headquarters in 2005? Yes.

And you gave him special deal on the lease? Yes.

And there were no other tenants at the time? Report might say that but we did have tenants.

Supporting the mayor's campaigns served a business purpose? Yes.

You said that Lakeshore never asked for special consideration or got it from the mayor and that all you wanted was access? That is true.

You met Ferguson on transition team? That's correct.

You are a minority business man? Yes.

Increasing opportunities for minorities you believe in? Yes.

You are a family man? Yes.

Have several sons that you have tried to get into business? Yes.

You have had several conversations with Ferguson? We've had lots of conversations over last 10 years.

Talked about opportunities for minority businesses? Yes.

And you talked about family? Yes.

You've met his daughters? All three of his daughters.

You don't remember his daughter Brittany interning at the business? I don't remember which daughter it was but I remember one interning there.

You socialized together? Yes.

He's met your sons? That's correct.

And you share some of the same values? Yes.

You agree on family? Yes.

And helping other minority businesses succeed? Yes.

And that's something he feels strongly about? Yes.

People like yourself feel it's important to knock down barriers? Yes.

And Ferguson has done the same thing? Yes.

And you've dealt with ENT trucking and who is that? Eric Simons.

Is he a young African-American? Yes.

Let me ask you about some companies that have come up in testimony. You purchased A & H from partner Rachmale? Yes.

Witness says it was A & H Management initially but changed to A & H Contracting.

And initially A & H did small jobs? Small renovations.

Who owns Lanzo? The D'Alessandros.

Gary and Angelo? I don't know.

And Lanzo includes Lanzo Lining and DCG? Yes.

And was one of your sons involved with Anderjohn? Yes.

And what kind of work did Anderjohn (not sure on spelling) do? Start doing work on water mains.

Part of your concern is to help people that are less fortunate? That is correct.

Including nursing home in your neighborhood? Yes.

The Homer Ferguson Foundation, started by or for Bobby's father, was a charitable organization right? Yes.

Might feed the homeless at Thanksgiving? Yes.

In fact at one point you were on their board? Yes.

That’s something that Bobby got you involved in? Yes.

And that was something you did because you thought it was morally good? Yes.

10:32AM Judge says this is a good place to take a 20 minute break. And I'm sure that everyone is headed to the first floor shop.

10:55AM Evelyn continues his cross of Hardiman.

We were talking about some of the shared values you and Bobby had as black men in the city? Yes.

Amongst that improving business opportunities for minorities? Yes.

And Ferguson is a family man who loves his people? Yes.

What is the Motor City makeover? Where they clean the city up and take trash off the streets.

Did you do that? Yes.

And Ferguson? Yes.

Was he one of the coordinators of the Motor City makeover? I believe so yes.

What was he on the transition committee? I believe he was the Chair.

Do you remember what Rachmale was on, the DWSD committee? I don't remember, it might have been.

I want to ask you about some of your testimony. Are you familiar with that document? No.

Are you familiar that it is a Lakeshore invoice? Yes.

Looking from Lakeshore Engineering to Ferguson Enterprises. For $24,840 on March 6th 2002 for a water main replacement contract, WS 623. On 8 mile sewer.

That's correct? That's what the invoice indicates. I'm not disputing it.

Second page is another invoice from March 31st 2002 for WS 623. Second progress payment is for $20,160. So total is $45,000 for both statements.

Sent to Ferguson Enterprises at Wyoming. Lakeshore was at 8 mile address from 1998 to 2005 when they moved to Woodward.

Witness does not remember what his company did on this invoice. He was not personally involved in it.

Appears to be the same project on the same site for both invoices? It appears to be.

Could be for work done in 2001? I'm not sure.

So it appears you had a relationship with Ferguson prior to 2001? I can't answer that.

But you don't dispute that you did work for Ferguson? No.

Evelyn has a bid proposal document for 849. Talking about local economic development section. Lists project team members: the individuals who would be on the team. Lakeshore, Ferguson, Lanzo, Spalding Decker, somat engineering and Cole Financial. Ferguson Enterprises listed as Detroit Headquartered. Percent of contract 36% for Ferguson.

So you got points because Ferguson is Detroit Headquartered and Detroit based? Yes.

But Lanzo is not Detroit headquartered only Detroit based? Yes.

So the 2 major companies listed here to get the contract are Lakeshore and Ferguson? Yes.

Same project, listing which businesses are minority designated businesses. Lakeshore is one as is Ferguson enterprises. Lanzo construction is not one. somat and Cole Financial are but they have small percentages of contract. So they have 78% total minority participation.

So you put Ferguson down to help you get contract? Yes.

City of Detroit Executive Order #22 work must be performed by no less than 50% bona fide Detroit residents, no less than 25% minorities and a certain percentage of women....

Lakeshore states that it exceeds requirements. It has a table which lists Lakeshore first with 15 employees, 10 of whom are Detroit residents, 11 are minorities and 3 are women. Ferguson lists 20 employees, 20 live in Detroit, 15 are minorities and 4 are women. Lanzo has 20 employees, 5 are Detroit residents, 5 are minorities and 2 are women.

The table essentially demonstrates that Ferguson enterprises ticks the most local and economic development point system boxes.

11:25AM "Ferguson enterprises has 34 years of experience providing services...have full capability with equipment, services and men.... It is DHB, DBB, MBE business." This is all on the bid proposal document submitted by Lakeshore. Also lists other projects that Ferguson is involved in Offload, Baby Creek and Booster Pump stations.

Witness says there was a contract where there was no work but there was an agreement.

DCG was part of the Lanzo family. After the contract was awarded, D'Alessandro decided he want to be in. Isn't that right? Yes.

FEI was on the 849 outfalls contract originally? Yes.

And then Angelo D'Alessandro makes a side deal with the city in 2004? Yes.

And then DCG wanted to do the work that Ferguson wanted the work? They wanted the same line items.

Bobby and Angelo had a discussion about the line items says witness.

But Bobby was the one who was awarded the excavation on the contract? Yes.

D'Alessandro said he wanted his, indicating Bobby, business? Yes.

That was the reason for the dispute says the witness.

You didn't say guess what Angelo that's not fair, that's Bobby's job, you let them work it out? Yes.

If Ferguson was pushed out of the contract he could have sued? In any event negotiations took place? Yes.

Angelo D'Alessandro's idea to take to Bobby? Yes.

D'Alessandro's share was supposed to be 36% of a 19 million contract? Yes.

You know you have to look out for yourself in that business? That's correct.

Especially if your a minority business? I feel that way sometimes.

And Angelo wanted him out because he knew he could make a whole lot more money? I don't know.

You testified that Angelo represented both DCG and Lanzo? That's correct.

Now looking at a record of payment. witness says it's an agreement between Lakeshore and DCG about the breakdown of payment to Ferguson that was agreed upon.

DCG would be receiving $1,854,001.07 for the work and they were meant to pay $273,786 to Ferguson Enterprises.

Witness says this was put together prior to the work being done.

So it's a schedule of payment? Yes.

Lanzo's original bid schedule was for $16,309,257- less credit for bond and 5% to team and $900,00 to Ferguson enterprises. Net to Lanzo was $14, 372,444.

So he didn't just write a check there was a formula? Yes.

11:49AM Evelyn asks for a 5 minute break.

Evelyn goes to sit at the table. Head in his hands, drinking water. He doesn't look good. His head is down on the table. Apparently, the court nurse has just been called.

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