DETROIT – 8:56AM So we are back at the courthouse after a day off following defense lawyer Susan Van Dusen's slip on a mat face first into the hard marble floor. Poor woman. It was a rough morning for her Monday with a tough witness on the stand- Kathleen McCann, ex employee of local billionaire Tony Soave.
She was rushed to hospital and we took the day off to allow her a day to recover. sounds like she won't be making it to court today though. Overheard entering the courthouse were fellow Bobby Ferguson defense lawyers Gerald Evelyn and Mike Rataj mentioning that Van Dusen was off to a neurologist to get checked out. I bet she's really missing her home in Miami right now.
Also sounds like the government might be taking a whole new direction today for a new chapter. It'll be interesting to see if one of Ferguson's lawyers continues with McCann or if we do set off on a different track today.
9:02AM Video turns on and it looks like all the players are in the courtroom except for Van Dusen.
I saw Kwame and Bernard Kilpatrick buying a bunch of water bottles outside the first floor shop this morning. "It's to wash away all the bull@##," said Kwame.
Judge tells jury that Van Dusen recovering fall and might be away for the week. Differing the rest of McCann's cross until she is back, probably beginning of next week.
We are going ahead with a new chapter and EPA special agent Carol Paszkiewicz is on the stand.
9:07AM US Attorney Mark Chutkow for government introduces Water commissioner agenda from December 19th 2001 into evidence.
The witness recognizes a text message exchange between Ferguson and Kwame on October 30th 2002. Inland Waters had started work on contract 1368.
Ferguson: "When do you meet with Soave?"
Kwame: "Don't know will holla later."
Looking at another text exchange between Kwame and Ferguson on November 4th 20002. 1368 was under way.
Kwame: "I'll call you later on Graimark. I know you met today.... it's fucked up but I'm with George now I'll explain later...."
Ferguson: "I met with them I cool you know I don't cry for shit that don't help both of us I didn't push $$% issue...What we need to talk about is that effin' Soave...."
Looking at exchange from August 9th 2004.
Ferguson: "Tonys very smart he didn't call me back Kathleen did asking what was the meeting I requesting pertaining to "holla later...."
On August 19th 2004. It's a stop work order from DWSD related to 1368. Sent to Dennis Oszust of Inland Waters referring to having Ferguson stop work until all issues of restoration are addressed. this is 10 days after last email exchange between Ferguson and Kwame.
Email message from Eugenia Blake, worked at FEI, to Ferguson's text on September 2nd 2004.
Blake: "Reminder!!! reminder!!! your 4:30pm with Katheleen McCan 313-567-0125 ext. 280 @ Lafayette.
Defense calls for a sidebar.
9:36AM Text message exchange between Kwame and Ferguson on September 7th 2004.
Kwame: "What happened with Gino?" That's Gino D'Agostini.
Ferguson:" I am going to talk to him today, it's the same he wants to work for him just let victor know I geno makes 2.00 fei to make 2.00 also will you look at the invoices to make sure..." This is the actual spelling from the text exchanges not my typos though there are probably some of those too....
Another entry from mayor's calendar on September 7th 2004. 8:30am to 9:30am with Victor Mercado at Detroit Club.
9:01AM was when Kwame sent the last text exchange and 9:18am is when Ferguson replied.
There are phone exchanges on September 7th 2004 between Mercado and Ferguson at night for 7 minutes as indicated by the phone records.
Now looking at email from Mercado's account. To Mercado and Fujita from an executive assistant to Mercado. Dated November 21st 2005. Subject is forward SAO (special administrator orders) with the mayor. Those orders refer to special powers of mayor on water contracts.
Admin orders with mayor. First one is amendment #4 on CS 1368 on August 29th 2005. This was the Inland amendment approved by the mayor.
Email from September 17th 2005 from McCann to Dennis Oszust about amendment #4 asking about outstanding issues with Bobby. Answer is that it is held up because of an issue with Bobby. This is about 3 weeks after the mayor received request for amendment.
Another email from Dennis Oszust on Tuesday October 11th 2005 to McCann. Says that amendment is held up until FEI is satisfied. Refers to QK- McCann's people's designation for Kwame.
Judge asks Chutkow to slow down. Defense lawyer Gerald Evelyn just stood up and asked for 5 minutes. Oh no. Evelyn books out of the courtroom though he doesn't look like he is struggling the way he was more than a month ago.
9:55AM Evelyn just walked back into the courtroom and sat back down next to Ferguson.
We were just discussing the amendments to contract 1368 for Inland. Amendments are typically done to increase payments to 1368.
Judge just tells Bernard's defense lawyer "you need a message. Me too."
Jury is back in and Chutkow continues on the amendment to 1368. Oszust met with Ferguson in December 2005 along with McCann. Ferguson had requested the meeting.
Inland Waters paid Ferguson for his work on the sinkhole and then paid him an additional $350,000.
Looking at DWSD form on 1368 amendment #4. It's basically like a routing slip that is signed off on by various DWSD officials. Prepared on August 12th 2005. This is prepared by one of Daryl Latimer's staff. Sent to mayor's office on August 29th 2005.
Next page is the cover page for amendment #4 followed by the Special Administrator Order 2005-33. That means it was the 33rd special order sent to mayor in 2005. This document is signed by Kilpatrick as special administrator. It basically gives him full authority to grant contracts. authorizes Victor Mercado to enter into contract on 1360 amendment #4. It is signed December 23rd 2005. So obviously Kilpatrick had full authority on this contract contrary to what the defense was arguing last week.
Mercado also signs this but there is no date next to his signature. Chutkow asking if there is any acknowledgement of when Mercado received it. City acknowledgement of receipt is January 12th 2006 by Victor Mercado, 3 weeks after mayor signed special administrator's order.
On February 3rd 2006 finance signs it. The law department signs February 13th 2006. City council approves it on April 19th 2006.
Now we are looking at chart created by the witness on finance records for 1368. FEI revenues on this contract were $20.8 million. On the sinkhole FEI made $3.1 million.
Now a spreadsheet from Inland Waters internal financial file. Has a breakdown of contractors, subcontractors, billing and invoice amounts. Mentions william McCormick and Associates, also a minority subcontractor who was on initial bid. They made more than $308,000 on 1368. Superior Construction made $448,990.01 on excavation for 1368, also another minority business. FEI not listed as minority excavator on 1338 initially. FEI made: on point repair, more than $11,360,000, the next line item is Ferguson lining what they thought Insituform paid, more than $9,400,000, 15 mile repairs more than $3,000,000.
Now looking at witness records for DWS 864 (east side contract) joint venture between Inland and Xcel, Ferguson's company and sub-contractor was FEI. Xcel made $191,000, FEI received $4.6 million in revenues.
10:20AM The witness reading about mayor being chief executive of the city and is responsible for city branch of executive government according to the city charter.
Financial report for 2002 followed by city organization chart dated June 2002. Witness obtained documents off of the city of Detroit website.
Looking at comprehensive annual report for city of Detroit for fiscal year ending in June 2002. Kwame Kilpatrick is mayor. Looking at organizational chart for June 2002. Shows that all the agencies report to the city of Detroit. Line of different agencies below the mayor.
Chutkow and the witness are methodically going over all the different departments reporting to the mayor. Budget, finance, law, human rights amongst others all report to the mayor. The mayor has the power to remove directors of all the departments reporting to him.
Chutkow asking about Kim Harris who was chief compliance office.
Now talking about DWSD. Headed by Board of Water commissioners appointed by the mayor and they in turn appoint director and deputy director who answer to the Board.
Now talking about a document from Judge Feikens's files. It is order continuing special administratorship for DWSD. after Kwame was elected but prior to being sworn in, this transfers special administratorship to mayor-elect and will be effective January 1st 2002.
Another order from Judge Feikens approving the employment contract for Victor Mercado dated May 23rd 2002. The order approved by court and approves executive of employment agreement entered on behalf of DWSD by Kilpatrick as special administrator of DWSD.
Looking at order 2002-3 on Victor Mercado. Submitted by Kilpatrick on May 23rd 2002.
The orders basically empower Kilpatrick fully over the DWSD.
Mercado's employment agreement is dated May 23rd 2002. Mercado accepts employment under direction of the mayor of Detroit under terms set forth in the agreement. Kilpatrick mayor at the time of contract.
Again, all this methodical documentation is to prove the mayor's overall authority.
10:35AM Judge calls for a 20 minute break.
11:00AM Judge admonishing courtroom for taking longer than 20 minutes. Defense wasn't at the first floor shop today so not sure where everybody was.
Chutkow continuing his method questioning of EPA agent Carol Paszkiewicz who is not missing a beat. This woman knows her Kwame files.
Back to the city organizational chart. City council has direct control over 3 branches. There will be witnesses from the Detroit Building Authority. The next chapter has to do with the Heilmann Recreational Center in Detroit.
Witness looking at text exchange between Kwame and one of his admins. June 13th 2002
Kwame: "Call me when bobby and Victor get to the office."
Linda: "Will do."
Mercado's employment agreement was signed 3 weeks previous to this.
Text exchange on June 21st 2002 between Bernard and Kwame.
Bernard: Just met with Bobby Ferguson... The 3 of us need to meet at least twice a month for an hour for awhile.."
Exchange between Bernard, Derrick miller and Kwame on July 2nd 2002.
Bernard: The real problem with DWSD is the evaluation committee. Warren has some ideas how you can proceed. Can we meet with him tomorrow evening?
Warren Evans is Water Commissioner
Bernard: No problem. I was just thinking short-term....Already out there...
Miller: don't want to meet with this guy. He needs to meet new guy.
Bernard: He already did. says he is going. going to be real good. However there are some pressing issues to deal with..."
Missed some of this exchange.
Ferguson and Kwame on November 6th 2002.
Ferguson: I need to talk to you and its important. DWSD 5 minutes whenever you can today. its about funds.
Kwame: Cool. come over about 5
Ferguson: will be over 5 m
Text message between Carolyn Williams Meza COO for Detroit and Ruth Carter head of law department on June 11th 2003
Meza: ruth mayor KMK does not want to give contract extension to victor. glad i checked. no new assignment for you.
Carter: Me too, didn't sound right to me either. i'm surprised at victor...
Merza: So is KMK.
June 13th 2003 between Mercado and Kwame, 2 days after above exchange.
Mercado: Mr. mayor...Also are we still on tomorrow.
Kwame: Talk to you about everything tomorrow at your house.
Exchange between Kwame and admin Linda on June 13th 2002
Kwame: Call me when Bobby and Victor get to the office.
Linda: Will do.
Already saw that one. Next day June 14th 2003 between Christine Beatty and Kwame.
Beatty: So it's a date?
Kwame: I have a mtg with Bobby and Victir at 8 i'll meet you afterwards.
Beatty: For real? I was actually just talking stuff! That would be wonderful to hear from you then...
Another entry from Saturday, June 14th 2003 from mayor's calendar. 8 to 9pm that day meeting with Mercado at 727 White Oak Drive West Bloomfield and directions to Mercado's home. This is the same day as text exchange with Beatty.
Now on June 18th 2003. A text exchange between Kwame and Ferguson.
Kwame: Talk to Victor I meet with him at 10:00.
Ferguson: Ok. i need to meet you today with the out of the country stuff i have it.
Kwame: come to my office at 10:30.
Text exchange between Meza and Kwame on the same day.
Meza: How did the mtg with Victir go? Should we plan to talk tomorrow? i can schedule with Iris if you wish.
Kwame: Mtg went well. No extension and he is doing pld (public lighting dept.) ni do agree there are some political things i need to do first.
Meza: ok i'll talk with him to get the change plan ready....
Exchange on August 23rd 2002 between Ferguson and Beatty.
Ferguson: good morning. are you in your office. If so I need the number of motor city's DWSD JOB or do you want me to call victor26 million is posens
Beatty:I am actually in a training you may have to call victor.
Ferguson: will call later.
Ferguson: Are you sure the company is motor city? victor says
Beatty: that may be right.
Ferguson: pursue motor city under the same directions.
Beatty: do you mean for what we talked about last night
Ferguson: yes exactly.
Beatty: let me talk to mr. mayor
Ferguson: ok get back with me.
Exchange between Kwame and Ferguson. March 8th 2003.
Ferguson: Are you going to call victor today 3 of us break bread this evening.
Kwame: Yeah i'll holla after work.
Another entry for mayor's calendar on Saturday, March 8th 2003. 9:30 to 11:00pm mayor, ferguson and victor at Mercado's house.
Letter to Judge Feikens dated Ferbruary 27th 2006 from Kwame Kilpatrick. Talks about January 5th 2005 opinion and order terminating the special administratorship. Date is incorrect by a year- terminated January 5th 2006.
WS 650, 657 and 651 changes need to be approved for unanticipated work. Kilpatrick no longer special administrator so he is asking Feikens to approve those orders. For 623 as well. Asking court assistance for orderly transition.
Asking for change orders for the following: 650 (Ferguson for $170,767), 657 (Willie McCormick for $158,266) and 651 (Ferguson for $276,135), on contract 623 for Ferguson Enterprises for $7,516,505.10. Lastly for D'agostini for $3.995 million.
Of the 5 companies listed on change orders, 4 of them were affiliated with Ferguson's company.
Asking to extend Mercado's employment until the end of Kwame's term in office.
11:37AM Kwame's lawyer Jim Thomas cross-examines the witness.
Looking at text exchange between Ferguson and Kwame on October 30th 2002 about meeting with Soave. Thomas saying this message doesn't establish that there was an actual meeting with Soave. And that even if there was a meeting, we don't know what was discussed.
The witness says she knows what was discussed. Thomas says that would be hearsay
And now onto the text message between Kwame and Ferguson on November 4th 2002.
Mayor: I'll call you later about Graimark. i know you met today. its fucked but i'm with george now. I'll explain later!
Graimark is a housing development under Archer. George refers to George Jackson at the time the head of the Detroit Economic Growth Corp.
Ferguson: i meet with them. I cool you know I don't cry for shit that dont help both of us. I didn't push the % issue I turn in busget #s for sitework. what we need to talk about is fucking soave.
Mayor: Yeah. i'll holla later about that.
Thomas dissecting meaning of text messages introduced by the government and implying that the witness is interpreting them to mean something they might not.
Now onto the email from September 2nd 2004 from Eugenia Blake reminding mayor about his meeting with Kathleen McCann. Thomas saying that the former mayor might have good reason to meet with McCann.
Apparently sinkhole disaster going on at this time, the main serviced a huge part of Macomb County. This is a sewer that is not flowing properly.
Thomas saying that the former mayor had gone out to the sinkhole site prior to the September 2nd date and that there were press conferences between him and mayor of Sterling Heights having to do with response to the disaster. Thomas saying mayor Kilpatrick was praised for his response to the sinkhole disaster.
Witness says she knows that as special administrator the former mayor had the power to authorize contracts.
Thomas reiterating that that the contract process has many steps before the contracts are actually awarded. Thomas says that sometimes special administartor needed to intercede in a cumbersome process. Thomas saying there is no greater emergency than when a sewer is spilling out into neighborhoods.
Thomas listing contracts 1368, 1361, 1325, 2014, 2015, 864, 865 as all going through normal channels. Amendments to 1368 and granting of pilot contract 2012 with amendments to east side and west side contracts were the only ones that special administrator orders were used for.
12:00PM Looking at the sinkhole aerial shots.
12:01PM In an earlier text exchange from September 2nd 2004, Ferguson mentioned to Kwame that there were "only 2 negros up here, up in here." It was a meeting about the sinkhole. Thomas says this points to the fact that Ferguson was concerned about the lack of minority participation on the contract. This was at the top of the same exchange where Ferguson said that "Kathleen bitch tried to punk me out." "Kathleen bitch" is Kathleen McCann, former executive with Soave Enterprises.
Thomas saying that Kilpatrick started out with 20,000 employees that went doen to 15,000 after re-election so he was dealing with lots of people. Thomas says so sometimes when Ferguson was communicating with Kwame there were lots of deferrals like "LOL" or "holla at you later" with no records of later follow ups.
Looking at calendar entry from September 1st 2004 for the mayor about meeting with mayor at Sterling Heights. Thomas comparing Kwame's response to the sinkhole disaster to President Bush's response to Katrina. Says Kwame was 4 days faster than Bush.
Looking at Kwame and Bobby exchange from September 1st 2004 where Kwame is telling Ferguson to get on the Sterling Heights job. Thomas saying do you find it unusual for Ferguson to talk to Mercado about sinkhole? Paszkewicz says yes she does.
Thomas says but doesn't Mercado have an emergency situation where spill water was spilling all over Sterling Heights. Witness agrees. Thomas says wouldn't Mercado talk to the mayor about this? Witness agrees with that. Thomas says and for the former mayor to talk to Ferguson? The witness concedes that in a friendship capacity, yes.
Thomas asks if Soave looks like the kind of guy who text messages people? "I don't know, he might," says the witness.
Government objects that Thomas is giving a speech. Judge sustains.
Thomas saying that text messages are not complete. Witness says that the text exchange in question from September 1st 2004 is complete so there are some personal comments like where Ferguson talks about riding his bike.
At the end of the exchange that day:
Kwame: Come to my ofc at 7
Ferguson: Still come to yours at 5:30
Kwame: You kill me that Bullshit!
Thomas asks if that is response to riding motorcycle or what has been said in the last 40 minutes of exchange.
Kwame: No cancel that!
Thomas asks if witness knows what cancel that means. She does not.
Ferguson: You only fucking boss i have besides cookie. i need to listen to someone don't you think.
Cookie refers to Marilyn Johnson, Ferguson's wife.
Kwame: I hear you.
Now there is a large gap of 3 hours. Thomas saying he is illustrating that there could have been other conversations whether by phone or in person between exchanges.
Thomas says there are many different conclusions that can be drawn from the text exchanges. Witness agrees she can't determine what all the exchanges mean.
12:25PM Witness says that an analyst at FBI put together the record of cell phone exchanges between Mercado and Ferguson. This is to identify sum total of cell communications between them. Thomas says but both men had home and office phones as well. Paszkewiecz agrees.
Looking at text exchange from September 7th 2004 where Kwame is asking about Gino D'Agostino. D'Agostino's was headquartered in Macomb County and not Detroit. In the message chain, Ferguson seems to be concerned with work parity with D'Agostini. Looks like Ferguson is being to asked to work for D'Agostini in the exchange.
Mayor's calendar from Tuesday, September 7th, 2004. Thomas going through all the mayor's meetings including a 1pm with Brooks Paterson, an Oakland County executive. Thomas says couldn't sinkhole project be related to water coming from Oakland County. Witness says she doesn't know.
Witness says executive agencies reporting to mayor are all those listed on organizational chart. Thomas says City Council has a long history of having arm's length relationship with mayor. Witness asks him to clarify. Witness says that City council can hold on to a contract that has been sent on approval. She also agrees that City Council and Detroit mayor don't tend to have harmonious relationship based on what she has seen in the media.
12:40PM Witness agrees with Thomas that the mayor can delegate responsibilities to the deputy mayor. And that the mayor might delegate various agencies to other of his top people.
Thomas saying that the special administrator order under Judge Feikens didn't require the mayor to go through city council but he did anyways.
Thomas asking if some of the other contractors we have been talking about like DLZ had relationships with members of the DWSD. Thomas talking about ethnic relationships. "I don't know about ethnic relationships," says the witness. Thomas says DLZ had Indian connections.
Government objects. The judge agrees she has no idea what an "ethnic" relationship is and asks Thomas to move along.
Talking about Bernard Parker, who was a business developer looking for work for his employers. Witness says Parker was used to seek information about contracts coming up. Witness says it was coming that people would talk about what was coming up or what issues might be in existence.
Thomas brings up amendment #4 to DWSD contract 1368. There are records that indicate that this was related to sinkhole says witness. Thomas points out that there were numerous sign offs on the amendment by different departments. Thomas says rumor had it that Kilpatrick was holding on to the contract. Witness says that rumor came from Derrick Miller who expressed it in communications and in an interview with her.
Final sign off by city council on amendment #4 was April 19th 2006.
12:55PM Thomas says this is a good place to stop. Judge agrees and dismisses the jury.
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.