Kilpatrick on Trial: Day 20

DETROIT - 8:58AM Court session is due to start momentarily. All the defendants are already in the courtroom, seated at the table.

Kwame Kilpatrick is in a black suit with a maroon striped tie, Bobby Ferguson is sporting a three piece light beige suit and Bernard Kilpatrick is in a caramel sports coat and orange tie. I don't think I've ever bothered mentioning "invisible man" Victor Mercado but given that he is finally getting his time in the spotlight it may be worth saying that he is in a dark suit and royal blue shirt. That's about as crazy as it gets with him.

9:03AM Judge Nancy Edmunds enters the courtroom. Wondering if they will bother redirecting DWSD employee Daniel Edwards this morning. Hoping we get to move on.

9:05AM Judge asks government if they need to redirect Edwards. Government says no.

Jennifer Blackwell for government calls new witness to the stand. Pratap Rajadhyaksha. Currently self-employed. He was at DLZ for 29 years. He was COO. He worked there with his brother. DLZ is a large diversified engineering firm. When he left, it had about 700 employees. Generated about $90 million.

Witness graduated from Highland Park High School, went to MIT for college.

Some of DLZ's clients included federal, state, Army Corp of engineers, major cities like Detroit, Cincinnati and Columbus. Also in southeastern Michigan where they had an office. DLZ operated through each state and licensed there. The office in Michigan operated as DLZ Michigan. Did about $5 million annually there.

9:15AM DLZ did pilot project with DWSD that was successful. Used Hayes Excavating and Ferguson Enterprises in that. Ferguson issued many change orders according to witness.

After pilot project success, which took 6 months instead of 2 years in 2003, got CM 2012. Wanted to use minority contractors. None of the 3 lowest bidders were minority contractors. After talking to Mercado, witness decided to talk to the minority contractors to try to get their bids in line. The 3 minority contractors were Hayes Excavating, Wili McCormick and Ferguson Enterprises Inc.

Talked to Mercado. Super Bowl was coming so wanted to make sure the water mains got replaced. Witness understood it was a time sensitive contract. DLZ got contract through emergency special administratorship.

Witness says no one complained to him the DLZ didn't have bonds. witness says DLZ managing project so it was only sub-contractors who needed bonds.

Witness reviewed Hayes construction work. They did fine, a small firm. McCormick did ok as well. At one point, witness talked to Mercado about Ferguson's company. He indicated that he wanted to have Ferguson get some work on CM 2012. Mercado did not make this recommendation for working any other firms. No other contractors recommended by Mercado. Witness says that Mercado did not tell him why, just that he wanted to see Bobby get some of the work. "Anything you could do to help Bobby would be well received by the mayor," said Mercado.

Ferguson wanted to get paid a lot of change orders that DLZ thought were unjustified. Witness says they spent 50% of their time managing Ferguson Enterprises. DLZ tried to work with Ferguson to accelerate their work so wrote to DWSD indicating there was a problem. Witness took project management very seriously.

Bobby called witness very upset and told witness that he was making him look bad to the DWSD. Witness said he had responsibility to director and department. Bobby said" Don't worry about the director. You need to worry about me." Witness hung up on Bobby. Ferguson had been yelling and screaming on the phone.

After the call, they never talked again. Witness took Bobby to mean that he was in close contact with people above Mercado. Connections with people above Mercado. Who asks Blackwell. "The mayor" answers witness.

9:28AM Witness says that they divided 50,000 feet into small segments and awarded 1 or 2 to each contractor. whoever finished first got the next project. there was an incentive to do good work and fast to get more work.

The basic contracts all had unit prices. Once they told them what segments they were working on, contractors would give lump sum for the segment. If there was a difference with DLZ pricing, they would work together to come up with a negotiated price which they would then recommend to DWSD.

It was in the best interest of taxpayers and government to do that. If we did good work, expected to get more in the future says witness.

Government shows document that is letter from DLZ to DWSD on October 15th 2004. Original price from FEI was 1.293 million or $401 per linear feet. DLZ negotiated price down to $1.067 million. A savings of $223,000.

Witness says it was more difficult to deal with FEI than other contractors on pricing. His initial quotes were usually higher. And his change order requests were usually quite frequent.

Each contractor had base contract with unit prices. Then they would get a work order. Change order was more money for changed conditions. Document we just saw should be called a work order.\

9:37AM Witness doesn't know which contractor got the most segments of work. Hayes Excavating was small contractor so probably didn't get much. Lanzo was big and moved quickly so probably got the most. There was not one that got significantly more than others. 

Near the end of the contract, Mercado called him. There was a large segment of work yet to be done by Ferguson. But he was behind so DLZ decided not to give it to him because he wouldn't be able to finish it in time. Decided to give it to Lanzo. After that decision, got a call from Mercado asking why they were awarding segment to Lanzo and not Ferguson. witness told Mercado that Ferguson was behind in his work, this was a large segment and didn't think that Ferguson could complete it in time. That was why he recommended it to Lanzo. Mercado said ok and accepted explanation.

Witness met with Mercado once a month and Awni Qaqish was a liaison for DWSD. Kept DWSD up-to-date with what was going on. Qaqiah had been appointed special person to keep paperwork moving. Mercado was generally happy with how things were going with CM 2012. Witness did tell Mercado on occasion that Bobby's firm was late pretty regularly and Mercado would say do the best you can to help him.

Witness says it was unusual that Mercado was calling about one specific segment and about one specific contractor.

Sometimes Mercado received phone calls during the meetings with DLZ. Witness doesn't know if they were related to contract.

Mercado was very happy with CM 2012. Staff had told him it couldn't be done and it was. Mercado personally told witness he was pleased.

DWSD seemed to like concept of project management. Looking to do all this work with this methodology. Witness references contracts 2014 and 2015. DLZ submitted bids for contract with Superior and Lanzo, they were D'Alessandro at this time. DLZ was not awarded contracts and they were very surprised to not get the contracts. They had done good job on the project. DLZ was best qualified firm to do the job says witness. Very surprised to not get one of contracts, either 2014 or 2015.

Letter dated February 1 2006 from Human Rights department with city of Detroit saying DLZ have been certified as Detroit headquartered-business and minority business. Certification good til August 5th 2008. Unless this period is extended by Human Rights, must renew 60 days before expiration. DLZ Michigan Inc Certificate clearly says expire august 5th 2008.

DLZ submitted this with bids for 2014 and 2015. Witness says he never saw letter revoking certification at the time. He has since since seen the letter. Witness heard during the proposal that their certification had been pulled.

9:51AM Witness says he never learned why they didn't get the contracts. Witness says he has never heard about the average cost method. Witness says that he assumed standard DWSD criteria would be used in the awarding of the projects to highest-rated firm with lowest costs. That's the usual way to do it. DLZ had a competitive price and "we were certainly the most qualified" says the witness.

Witness doesn't even know what average cost means. It matters to him what criteria the DWSD was using.

After CM 2012, witness had discussed with Mercado interest in upcoming projects. Mercado says he basically said "You've done good work so sharpen your pencil." Everyone was very happy with CM 2012 says witness.

In casual conversations to witness, he indicated he was under pressure to give Ferguson work and he was tired of it. Witnesses impression that Ferguson would call during witnesses meetings with Mercado.

Bobby is staring witness down.

9:57AM John Shea for Bernard Kilpatrick cross-examines.

Shea mentions about advisor used in connection used for city business. His name was Conrad Mallett? Yes.

He is a prominent Detroiter? Yes.

Known him for a number of years? Had relationship with him for a while? Yes. Had ties in Lansing.

Also knew that he had been prominent with Kwame's first election campaign? Yes.

He was Kwame's first COO? Correct.

His job was to act as liaison between your company and the city's central administration when you hired him? Yes.

You hired him for close ties to the administration? Yes.

Important to have effective communication with private or state? Yes.

So not unusual for you to hire someone who is an effective communicator? Yes.

Did you talk to an EPA agent in 2009? Yes.

Wasn't his primary contact miller? to tell you the truth I don't know.

Didn't you tell the EPA agent that Mallett spoke specifically with Miller? I don't know. i guess that's the name that came to me.

Still involved with business just not DLZ? Yes.

But you agree it's normal practice to have someone like Mallett as liaison? I would say not unusual.

Mallett got paid $5,000 a month. witness says Mallett still working with DLZ when he worked.

One of reasons you hired Mallett was because you thought he could be effective communicator on issues to do with DLZ? Yes.

At one point his primary contact was Derrick Miller? He spoke to Derrick, he spoke to Christine and the mayor.

10:05AM Martin Crandall for Mercado cross-examines.

During this time in 2004 and 2005 when you were getting involved in pilot projects, you met with Mercado? I used to meet with him regularly.

5 or 10 times? I can't remember.

Was Mercado professional? Yeah. He had a strong personality but I liked working with him.

Witness heard through reports that Judge Feikens praised Mercado's performance.

Witness says it was on the downtown water main project that Mercado wanted DLZ to give Ferguson work.

So it was once he asked you? It was at meeting for water main project.

Do you remember telling EPA agent that Victor didn't like dealing with Ferguson? Yes.

On November 17th 2009, very next day you testified to grand jury, You remember saying that it was Mallett who said to get Ferguson involved because that would please the mayor? Witness remembers Mallett saying for several years that helping Ferguson would please the mayor.

In entire grand jury transcript never mentioned Mercado promoting Ferguson? Don't remember what I said.

Would you accept that grand jury testimony never mentions Mercado promoting Ferguson? I would accept it.

Was Mercado proponent of minority enterprise? I would say that is a fair statement yes.

10:11AM Mike Rataj for Ferguson. Rataj asks witness to help him with pronunciation of his name. "No disrespect intended."

Started working at Snell environmental in 1977? Yes.

Based out of Lansing? Yes.

Worked out of there until 1987? Well in 1988 my brother and I bought Snell Environmental. Witness says that when he left, brother had 85% stake in DLZ and witness had 15%. DLZ holding company for Snell.

Rataj says that in report it says that witness's brother bought Snell? Witness says they both bought.

Rataj shows him report. witness says that's what it says in report.

You ended up working for you brother? Yes. You were COO and brother was CEO? Yes.

DLZ opened office in Detroit in the 90s? There was a Snell office in Detroit.

Your brother named company DLZ? Witness says company was changed from Snell to DLZ in 2000.

In late 90s, Snell got DWSD contracts under Archer administration? We were part of some teams.

Had done some work for DWSD? Some.

Detroit Water Partners consortium, familiar with them? Yes.

Snell part of them? No.

So if EPA agent put that in her report not accurate? Witness says what document says is that we worked under Detroit Watyer Partners. they were working as program managers. And DLZ got some projects from that process. We were not part of the consortium.

Rataj says "Alright I'll accept your answer."

Witness says his group did design projects under expansion program.

You were mostly involved in business development? No.

Had relationships with some engineers at DWSD? Yes.

You would use relationships to see what projects were being developed? Yes.

These projects weren't probably up for bid yet? Probably not.

You wanted to get a leg up on competition.

Blackwell objects. Judge sustains.

You admit you'd make calls to find out what was in the pipeline? I certainly needed to know what was coming up.

The engineers were leaking info? That information was probably available. DWSD has reports with what they are planning to do. They might be on their website.

Do you know that for a fact? That it's on their website. I don't know that for a fact.

You'd get a jump with your competitors? I don't know about a jump says witness.

Witness says you don't start putting together drawings til the thing is advertised.

You said you hired Mallett? That is correct.

You did that because you wanted access to City Hall and DWSD? Yes.

You paid him a hefty sum of money to see how your bids were doing. Isn't that true? I would say it's more factual to say we were doing job ourselves to chase the projects.

Didn't you tell EPA agent that Mallett would check DWSD contracts? Yes.

Blackwell objects. Judge sustains. Rataj starts to get into it with judge.

You paid Mallett $5,00 to $6,000 a month? Yes.

He was campaign manager for Kwame and COO? Yes.

The reason you hired Mallett was to gain access to City Hall? I don't know what that means. His job was to protect our interests in City Hall.

And you did that because he was connected? Yes.

Judge interrupts Rataj's questioning and says that this is a good place to take a 20 minute break.

10:40AM The place to be in the courthouse is obviously the shop on the 1st floor run by the super nice blind guy. The entire defense team was in there buying drinking and snacks. Kwame and Bernard tag teamed to do their best impressions of defense lawyer John Minock. Kwame intoned in a deep voice: "I am John Minock, lawyer for Victor Mercado who is seated over there." Luckily, Minock thought it was pretty funny too. Pretty sure that Bobby's lawyer Mike Rataj cut the line in front of me to have Susan Van Dusen pay for his water. Bobby was pretty low key, quietly buying his bottle of water. 

Meanwhile, somebody forgot to tell the witness he can get off the stand. He's sitting there alone in an empty courtroom.

10:49AM Judge Edmunds is back in the courtroom. Rataj will continue his cross of the DLZ witness.

Judge explaining evidenciary terms to the jury. Difference between refreshing memory and impeaching a witness. an attorney questioning witness can use anything to refresh memory, a statement, picture, no limit to what they can use.

Impeachment is different. If a witness testifies to something different from a prior statement, to a grand jury or in an interview, then an attorney can use that to impeach a witness. That's impeachment- witness made a prior inconsistent statement. But circumstances are very limited.

Those are the rules of evidence.

10:53AM At some point in 200, you approached Mercado about being a program manager for water mains downtown? Yes.

And you had an understanding that there was a backlog of fixing waterlogs downtown? I had an understanding there was a backlog in the city.

You got that information from engineers? I got that info from DWSD staff yes.

Some of the mains really old? Yes they weren't be replaced in a timely fashion.

You contacted Mercado and made pilot program proposal? Witness says that he suggested pilot program might be efficient.

You had suggested using 2 minority contractors? Yes.

Your idea to use Ferguson Enterprises and Hayes? Might have been.

No one called you up and said you'd better use them or you won't get work in Detroit? Yes.

At that time there were only 3 qualified minority contractors, FEI, Hayes and McCormick? Yes.

That pilot program a success? Yes.

You finished ahead of schedule? The whole program was done faster than a normal program would have worked.

Witness says the methodology was more effective than the one previously used.

Did you tell EPA agent that it was ahead of schedule and a success? It was a success, yes.

After pilot, there were negotiations on CM 2012? I don't know about negotiations.

You wanted to continue water main repairs? No Victor called me at a meeting in his office. Said he had a lot of work to be done in the downtown area. Staff telling him it would take a long time to be done. Wanted it to be done before Super Bowl.

You and your brother awarded contract? Yes.

Rataj hands witness email to look at. Would you agree with me that this email is from you to Daniel Edwards. Dated December 24th 2003. Asks witness to read it. "RFP process will be used to select contractors. "Solicitation open to all with preference given to Detroit-based contractors". "Important to have good price competition." Witness doesn't specifically remember sending.

You had contemplated using at least 7 different contractors? That is correct.

Strong preference to be given to DBBs and DHBs, with employees that resided in Detroit? Witness says local economic development, yes.

Agreed that RFP process used not lowest bid? Yes.

Ultimately number of contractors hired? Yes.

Amongst them FEI and Hayes? Yes.

And they helped established success of pilot? Yes. They were involved in it.

You will acknowledge issue under contract CM 2012 about ability to post bond? No. Not aware of that.

Edwards or anyone from DWSD didn't contact you about it? No I'm not aware of it. But I may not be recollecting.

Witness says bonds were needed on pilot project.

Do you remember when Snell hadn't posted bonds and it cost the city of Detroit millions of dollars? No I'm not aware of it.

Rataj hands witness a document. Witness says he is not familiar with document. Rataj says does it refresh recollection about prior contract in the 80s? No it doesn't.

No one ever told you? No. Our contract was management contract. Our contractors were provided the bonds.

Don't remember when Snell Environmental cost the city millions in the 80s? No.

CM 2012 went off without a hitch? Wouldn't say without a hitch but got done in time.

DLZ management contract was for $19.9 million.

Witness says that managers told him that Ferguson issued a lot of change orders.

You have a strong personality? Yes.

You're not a push over? I try to make my point.

You would agree Bobby is a strong personality as well? That would be a fair statement.

Strong personalities in the construction industry? Strong personalities ion all businesses.

there is a lot of pushback between sub-contractors and engineers? Yes.

You and Ferguson able to work through your differences? Yes.

Rataj hands the witness another document.

11:14AM You recognize documents? Not specifically, no. 

On overhead. they are change orders. Witness says not sure if they are change or work orders. 

Witness says that department used terminology change order because they used base price. Witness says they were asked to call it change orders but some times it was new work being given. Witness says that contractors got six different segments, they were called change order but weren't a changed condition on the order. Witness calls them work orders. 

Looking at Lanzo Construction change order #12. Lists initial contract price. 

Witness says that WS 642 was number for base contract. Every time they gave them segments it would have added to the base amount. Lanzo got many segments. 

Witness says project managers were handling the contract, he wasn't aware of every detail. 

Lanzo Change Oder #12. Amendment for $180,000. the contract after 12 change orders from 41.4 to $6.4 million. 

Judge tells Rataj document needs to be focused more. Jurors having a hard time. 

Rataj asks was this the last change order for Lanzo or there could be more? Witness says there could be more. I don't know. 

This isn't unusual for change orders? Witness saying what you are calling change order I call work order. 

Witness says Jay Mehta worked for DLZ on program. 

Memo on overhead about conversation with Mercado. Says letter of intent needs to be issued by July 2003. Edwards spoke to Jay Mehta who said that DLZ would not have bonds but that the sub-contractors would. Rataj asks if it refreshes recollection about problems with bonds? At this point no. 

Blackwell objects. Judge sustain. "You have asked this question many times and he has said the same thing."

Rataj "He has no recollection, fair enough."

Witness says whenever there was a problem they would notify department. It wasn't just with Ferguson. Witness sure they wrote up more than one contractor.

From 2005 to 2006, you scaled down participation with DLZ? Yes.

And that's because your brother fired you? Not at that point.

But he did fire you? Yes.

Did you tell EPA agent tell you that "your brother fired you because you pissed to many people off"? No.

Rataj gives document to refresh witness's memory. witness doesn't see it "Perhaps it's not there."

Witness finally sees it. "What about it?" Witness says that he wanted to make amends with some people in Detroit. "But it doesn't mean I pissed everybody off."

But you pissed off some poeple? I'm sure.

And your brother got ride of you.

11:30AM Jennifer Blackwell redirects.

What kind of advice were you asking Mallett for? What functions we should attend.

You wanted advice on how to get along with mayor? Yes.

Wasn't advice to hire Bobby? Well he told me to hire Ferguson to make mayor happy. On several occasions.

With regards to pushback with Ferguson, how would you rate it with respect to other contractors? He was a lot harder to deal with other contractors.

With Lanzo change order #12, was it change or work order? I believe it was for an additional segment. What I believe is a work order.

Witness says Lanzo was doing things efficiently and faster. Logical for them to get work. Witness liked them- equipment was always good and didn't have a lot of change over.

How would you rate Ferguson performance problems? I would say in the context, he was the worst of the six. He was the most difficult to deal with.

Witness steps down.

11:35AM Mark Chutkow calls for EPA agent Carol Paszkiewicz. Agent is one of principal agents investigation of allegations of extortion during Kilpatrick administration with Detroit Water and Sewerage.

She was key witness in Ferguson's previous trial. She found the gun in his office.

Sidebar called.

11:39AM Agent investigated contractors who might have a fear that if they didn't have partnerships or there were "no show" payments, there might be financial or contractual repercussions. Witness investigated whether members of mayoral administration had rigged or steered contracts. Ferguson Enterprises and Xcel Construction investigated- affiliated with Bobby. Lakeshore Engineering, Inland Waters, DFT and Motor City Electric looked at.

Lakeshore contracts were sewer and water. A combined sewer overflow is where cities had a combined system. Over years, they worked to separate. Over time, the water will overflow. You don't want to overflow your waste water plant.

Inland Waters another one allegedly forced. Inland Waters is Tony Soave's company.

Also Walbridge, sewer and water construction company.

Agent looked at text messages, emails, looked at records, also records from engineering. Obtained records from all those companies on water companies. Also obtained and reviewed financial records.

You remember Edwards' yesterday testimony? "2 days!"

Witness looking for context on text messages or more information on texts, that's why she would show them to witnesses. To Edwards in particular, looking for guidance to contracts.

Witness does that with a variety of documents that she shows witness to get a sense of direction.

Looking at email from a Mr. Walter in the law department to a Mr. Gerald Moore, works for Edwards. The subject is contract 2012. The email tells the recipient that he has reviewed final version of the contract and is ok with it.

How much later is this email from the one yesterday? A couple of months.

Witness says in original email from Moore it says contract has been signed off by mayor and Mercado.

The original email from Moore is September 3rd 2003 and the reply is September 4th 2003. 

After Edwards testimony yesterday, did you get a chance to review text messages between Kwame and Bobby on 2012? Yes.

Did he have an official role in the city administration? No (talking about Bobby)

And at this time did Kwame have a role in the awarding of water contracts? Yes he was special administrator.

Text message from Bobby to Kwame. on August 25-26 2003.

B: "You haven't authorized Vic to go ahead with downtown main with Asian people." Asian people would be DLZ individuals.

K: "Yes I did before we talked. I did that before fund-raiser."

B: "Was that the whole deal or just the pilot program?"

K: "Pilot program."

B" I think we might have an issue. i will bring a copy of something I received last night."

K" OK.

Text message on October 14th 2003 between Bobby and Kwame.

B: "Things are moving kind of quick on the water main work, is it ok if Zeke review and approve the watermain replacement prior to victor assigning a new task to his consultant team". "Zeke" is Derrick miller, he was aide to Kwame.

K: "We need to talk about that. We'll holla later."

Text message on October 17th 2003 between Kwame and Bobby.

B: "Got the idea and the other team ready water main."

K:" Cool."

B:" Do 2 teams. See you in the AM."


Text message between Bobby and Kwame on February 18th 2004

B: "Hate to bother you but you need to hear this. Pratap people stopped talking to my people and trying to give the job to one of the other contractors."

K: "What?"

B: Just what you said before we are not part of the decision making, we get fucked no matter how the process started you still in the office."

Qaqiah from DWSD would communicate with Jay Mehta of DLZ.

Text message between Bobby and Derrick Miller on February 18th 2004.

B: "I need to see you sir."

M "Cool. Holla about 3:30."

B: "I am with the boss this is real urgent." "Boss" is Kwame.

M: "You are there? Cool."

Miss a lot of the rest of the exchange.

B: "Just to let him know what was going on to see how you would handle it."

Miss Miller's reply.

B" I need to give you the complete details. I don't want to met with your boy. LOL."

B: You downtown Blackman.

Talking about the water main project.

On March 15th 2004, from Jay Mehta at DLZ to Awni Qaqish at DWSD on March 15th 2004. They recommend that the three lowest bidders be granted contracts. The three lowest contractors are Posen Construction, L D'Agostini and Lanzo Construction.

Skytel between Mercado and Kwame on March 16th 2004. So day after last letter on lowest bidders.

M: "Mr mayor I need to speak with you it is urgent.

K: "Come to office at 5:30."

M: "OK thanks."

March 16th 2004 between Bobby and Kwame. Text later same day.

K:"Can you come to my office. How long very important.

B: I guess right now, if it that very important i am in a staff office... can you give me 20 minutes to leave my office?"

K: "Yes."

B: "Thanks boss."

K" It's about downtown projects."

B:" OK"

B" I am here sir. i am out here with security."- approximately and hour after last email about 7:10pm

K: "Come in"

2 days later, March 18th 2004. From Awni Qaqish to Mercado. DLZ finished their evaluation of 10 bids which are attached. Qaqish concurs with recommendation to naward contracts to 3 lowest bidders and reject the other proposals for being 40 to 156% higher. He also recommend getting rebids from other contractors. Mercado approved this recommendation.

March 18th 2004 between bobby and Kwame.

B: "your welcome boss. just left victor. date has been changed to my benefit but we still have problem on the big one...he thinks he is slick man with this white folks." Witness says "big one" is 2012.

K: "His slick shit is running out. i got his ass on something. I ain't happy."

B" Damn, I'm not nosy one but I will find you...." missed some of this ...

K: "True."

Witness looks at document from Jah Mehta from DLZ to Daniel Edwards at DWSD on March 17th 2004. It's a fax. "Hayes Excavating has alrady executed contract.." "FEI informed DLZ that they want extension of project date." DLZ informs FEI that extension is DWSD's decision.

Looking at phone records. there was phone call between Mercado and Ferguson on March 17th 2004.

Witness looking at letter from DWSD to DLZ on March 19th 2004. Communicating that they accepted to award contracts to entities listed earlier: Posen, L D'Agostini and Lanzo. Looking to assemble everything necessary to process contracts.

Text message on March 22nd 2004 between Bobby and Kwame. This is 3 days after recommendation.

B: Okay I need zeke to call victor and tell him he wants to review recommendations for downtown contractors prior to final decision being mafde."

K: "Cool."

B" You will tell him sir real soon they are trying to move real fast thank you not trying to rush boss but don't want this to get by us."

Text on march 23rd 2004 between bobby and kwame. 

B: Good morning boss don't forget to talk to zeke sir. 

K: I did call him asap so you can give him details

B: victor just outsmarted us. he made me come to his office. thought ut was about jon we have it was about 3 lowest bidders. white folks."

March 23rd 2004 more from Bobby and Kwame.

B: :can you beleive that dlz has already told some contractors that d'agostini and posen and lanzo are winners

K: yup.

K: Some guy jay told adamo they will be chosen.

B: what's up, what did adamo wont.

Witness says that bobby very commonly mispells want writing "wont"

Text message from Denise Vaughn to Miller March 30th 2004

D: "Derrick, victor wants you to call him and he wants to meet regarding project."

12:28PM Witness talking about order for certain percentage of Detroit based business.

March 17th 2004 between Bobby and Kwame. William Hayes runs Hayes Excavating says witness. Based in Detroit and is minority-owned.

B: "You want to hear something funny Hayes excavating cussed out victor and said stuff his job. 5 minutes later calls me to find out when, how fast we can do the job"


B: "I will tell you more tonight. victor told me he don't want to hear why the problem exists just to fix it...."

K: "Cool."

Rataj objects. Overruled.

Document is from Jay Mehta DLZ on March 18th 2004 to Mr. Moss from Posen Construction. Says that Posen being awarded contract and asks them to pick up documents.

Text message between Bobby and Kwame and Miller on March 30th 2004.

B: "Victor is full of shit, He told me the oridence didn't let him throw Posen out. that is a damn lie. we will talk tonight"

K: "Cool."

M: "That's BS. I am in DC so I will holla tomorrow."

Posen was the number 1 ranked lowest bidder.

Sidebar is called

12:38PM Text message April 1st 2004 from Mercado to Kwame.

M: "Just thought of somethinmg. trying to locate evaluations on contracts from city depts to see for grounds. also looking at delaying work. hopefully we'll have more info tomorrow.

Text from Bobby to own email account July 20th 2004

"Washington blvd FEI instead of Posen." FEI got work on Washington Blvd and Posen did not. Posen got work outside downtown core.

Witness looked at records for FEI and Xcel. Looked at city-issued checks to Ferguson and his companies. Obtained accounting ledgers.

Witness looked at CM 2012, FEI received: WS 650 $3.4 million, WS 651 $3.5 million. Those are approximations.

Chutkow asks about 2014 and 2015. they were construction management contracts, sibling contracts one for east side and the other for west side of Detroit. DLZ was partnered with Superior Engineering. Before DLZ had certification revoked, Superior Engineering was #1.

Lakeshore Engineering paid Ferguson Enterprises and Xcel Construction. Under 2014, they were paid approximately $2 million combined.

A&H was a subcontractor on 2014. Paid Ferguson-related companies approximately $2million. So Ferguson companies got approximately $4million on contract 2014.

Detroit Contracting Inc and Xcel construction had a joint venture. Xcel Construction got $3.5 million on 2015 contract and Ferguson Enterprises got $13.4 million dollars on 2015, so Ferguson got a total of $17.9 million on contract 2015.


The government introduced a series of incriminating text messages today that strongly suggest a behind-the-scenes conspiracy to ensure that Detroit water contracts were steered contractor Bobby Ferguson's way.

EPA agent Carol Paszkiewicz was one of only two witnesses to take the stand today. Agent Paszkiewicz is a federal witness who will testify in different chapters of the Kilpatrick trial. She is one of principal agents investigating allegations of extortion during the Kilpatrick administration in conjunction with Detroit Water and Sewerage Department (DWSD) contracts.

Under questioning by US Attorney Mark Chutkow, the EPA agent talked about a flurry of text messages sent between August 2003 and April 2004 regarding downtown water main contracts awarded under the umbrella contract CM 2012. DWSD awarded company DLZ the construction management contract over other sub-contractors for the project.

In the period the text messages in question were sent, an initial recommendation had been made by DLZ to DWSD to award the CM 2012 umbrella contracts to the three lowest bidders and reject all other contractors. The three lowest bidding contractors were Posen Construction, L D'Agostini & Sons and Lanzo Construction.

And this caused a whole lot of behind the scenes scrambling.

On February 18th 2004, Ferguson texted Kwame Kilpatrick: "Hate to bother you but you need to hear this. Pratap people stopped talking to my people and trying to give the job to one of the other contractors." "Pratap" refers to Pratap Rajadhyaksha, COO at the time of project managers DLZ. Kwame replies: "What?" To which Bobby responds: "Just what you said before we are not part of the decision making, we get fu#$ed no matter how the process started. You still in the office?" 

On March 16th 2004, a day after DLZ sent DWSD its recommendation to grant the three lowest bidders the contracts, former water boss sent Kilpatrick a message saying "Mr Mayor I need to speak with you it is urgent." Later that very same day, the former mayor texted Ferguson telling him to come to his office to talk about "downtown projects." 

Two days later, on March 18th 2004, Mercado approved the recommendation to take the lowest bidders. 

That did not sit well with Ferguson and Kilpatrick. That very day, March 18th 2004, Ferguson texted Kilpatrick:"Your welcome boss. Just left Victor. Date has been changed to my benefit but we still have a problem on the big one. He thinks he is slick man with this white folks." Agent Paszkiewicz explained that the "big one" referred to contract CM 2012, "boss" was a nickname for Kilpatrick and the "slick man" designated was Mercado. 

To which Kilpatrick replied: "His slick sh%$ is running out. I got his ass on something. I ain't happy." 

Five days later, on March 23rd 2004, Ferguson texted Kilpatrick: "Victor just outsmarted us. He made me come to his office. Thought it was about job we have but it was about 3 lowest bidders. White folks." 

And finally, in a three-way exchange between Ferguson, Kilpatrick and aide Derrick Miller on March 30th 2004, Ferguson texted "Victor is ful of sh$%. He told me the ordinance didn't let him throw Posen out. That is a damn lie. We will talk tonight." Posen Construction was the lowest bidder on the CM 2012 contracts. 

Ultimately Ferguson got his way and Ferguson Enterprises was awarded contracts WS 650 and WS 651 under CM 2012. The two contracts garnered Ferguson a total of $6.9 million. 

Earlier on the day, former DLZ Chief Operating Officer Pratap Rajadhyaksha testified that Mercado indicated to the witness early on that he wanted Ferguson to get some of the work on CM 2012. He also testified that Mercado did not make this recommendation for any other contractors. 

Rajadhyaksha told the court that Ferguson's company requested an unusually high amount of change orders and was the most difficult of all the contractors to work with on the downtown project, requiring a full 50% of DLZ's time to manage them. After DLZ reported their problems with Ferguson Enterprises to Mercado, the witness received a call from a furious Ferguson. When Rajadhyaksha told him he had a responsibility to keep Mercado informed, Ferguson yelled "Don't worry about the director. You need to worry about me." 

The witness said he ended the conversation by hanging up on Ferguson and they never spoke again. 

Court reconvenes tomorrow at 9AM.

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.

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