Tuesday recap: Kilpatrick on trial

Contracts with Detroit water department are prosecution's focus

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DETROIT - Detroit Water and Sewerage Department (DWSD) employee Daniel Edwards took the stand again Tuesday in the Kilpatrick federal trial. Edwards, who manages construction grants for the DWSD, never got past cross-examination by defense lawyers as he testified in excruciating detail about the intricacies of water contracts.

Yesterday Edwards testified that contractor Bobby Ferguson's Ferguson Enterprises Inc (FEI) and contractors Xcel Construction and Lakeshore Engineering, which also have ties to Ferguson, were awarded multi-million dollar contracts authorized by former water boss Victor Mercado.

Mercado's lawyer John Minock gave a solid albeit lengthy performance in his cross-examination of the witness. Engaging jurors by looking them dead-on as he posed questions, Minock got Edwards to acknowledge that often there is no way of knowing exactly how much a job will cost until excavation has begun and contractors can see what they are facing. Minock was attempting to address the issue of why many change orders might be imposed to increase an original bid price. Yesterday, the government introduced evidence showing a series of change orders which were executed to take one of Ferguson's contracts from an original price of around $13 million to more than $55 million.

Minock also brought up how some contractors low-balled bids to get contracts and then relied on change orders to get the price back up. And in terms of the special administratorship which was used to circumvent City Council to award FEI contracts, Minock pointed out how it was done as an emergency measure to have the work completed in time for the anticipated Super Bowl and All Star Game activities in Detroit.

But foremost, Minock made sure to let the jurors know that Mercado was good at his job. He stressed Mercado's background as a water engineer where previous Detroit water heads had been lawyers and politicians and that it had been the recommendation of executive search firm Heidrick & Struggles that Mercado be paid at least $240,000. Minock got the witness to agree that under Mercado's tenure the engineering department saw it's power over water contracts decreased, policies were strictly enforced, staff was trimmed and the water department was reorganized in accordance with outside recommendations.

Was Mercado a good boss Minock, asked the witness.

"Absolutely. He was a good boss to work for. I never had a problem with Victor," replied Edwards.

Jim Thomas, Kwame Kilpatrick's defense lawyer, brought up the fact that the special administratorship, set up by the EPA to counter discharges into Detroit rivers, was dissolved during the Kilpatrick administration because Judge John Feikens determined that clean water was on its way back to the city. Thomas also reiterated that Kwame was right in bringing on Mercado because he was a good water boss. In 2006, Mercado managed to cut DWSD's operating budget by 10%, bond rates remained stable and the sewerage rates were amongst the lowest in the country.

Last on cross-examination was Ferguson's defense lawyer Mike Rataj.

Under Rataj's cross, it was revealed that one of the contracts awarded to Ferguson, WS 651 under umbrella contract CM 2012, was initially determined to have saved DWSD money. Rataj also pointed out that the contracts weren't done by a low bid contract process and so there was no requirement to take the lowest bidders. In testimony yesterday, the court heard how a recommendation was made to award the contracts in question to the the three lowest bidders- Fergsuon Enterprises ranked 8th in a list of 10 bidders.

And finally, Rataj demonstrated that numerous change orders on contract pricing was not unusual. He introduced evidence showing that contractors Lanzo Construction and L D'Agostini, who had ranked in the top three of lowest bidders, issued 12 and 8 change orders respectively to increase their original contract prices by several million dollars.

Court reconvenes at 9 a.m. Wednesday.

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