Live Blog: Kwame Kilpatrick Trial Day 17 - Fox 2 News Headlines

Live Blog: Kwame Kilpatrick Trial Day 17

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  • Latest Development in the Kilpatrick Corruption TrialMore>>

  • Bobby Ferguson sentenced to 21 years in prison

    Bobby Ferguson sentenced to 21 years in prison

    Friday, October 11 2013 3:20 PM EDT2013-10-11 19:20:27 GMT
    Bobby Ferguson, a former city contractor and longtime friend of ex-Detroit Mayor Kwame Kilpatrick, has been sentenced to 21 years in federal prison for his role in a public corruption case.
    Bobby Ferguson, a former city contractor and longtime friend of ex-Detroit Mayor Kwame Kilpatrick, has been sentenced to 21 years in federal prison for his role in a public corruption case.
  • Kwame Kilpatrick sentenced to 28 years in prison

    Kwame Kilpatrick sentenced to 28 years in prison

    Thursday, October 10 2013 9:33 PM EDT2013-10-11 01:33:28 GMT
    A federal judge sentenced former Detroit Mayor Kwame Kilpatrick Thursday to 28 years in prison for his role in a public corruption scandal that cost the city millions and ended a career for the once promising politician.
    A federal judge sentenced former Detroit Mayor Kwame Kilpatrick Thursday to 28 years in prison for his role in a public corruption scandal that cost the city millions and ended a career for the once promising politician.
  • Judge: Ex-Mayor Kilpatrick must pay $4.7 million

    Judge: Ex-Mayor Kilpatrick must pay $4.7 million

    Tuesday, December 10 2013 8:04 PM EST2013-12-11 01:04:30 GMT
    A federal judge has granted prosecutors' request and has ordered imprisoned ex-Detroit Mayor Kwame Kilpatrick to pay $4.7 million in restitution.
    A federal judge has granted prosecutors' request and has ordered imprisoned ex-Detroit Mayor Kwame Kilpatrick to pay $4.7 million in restitution.
DETROIT (MyFox Detroit) -

12:59

...and with that I'll bid you all a good day as well.  Be sure to watch Fox 2 tonight at 5 and 6 for M.L. Elrick's wrap up of today's testimony and catch his "Takeaway" on MyFoxDetroit.com.

12:58

and the judge calls for a halt, says maybe this would be a good place to break for the day.  Wishes the jurors a good night, tells the ailing jurors she hopes they feel better, watch the third debate tonight and she'll see everyone tomorrow.

12:57

Minnock asks if other departments are involved in vetting contracts.  Edwards says yes, they make sure bonds are in place, proper documents are included.

Minnock asks if City council is the last word.  Edwards says yes.

12:55

Asks if Audrey Jackson from Purchasing Department got involved with Water Dept and if they did scoring.  Edwards says no but they did listen to what they had to say and modified procedure.

12:53

Minnock asks about purpose of "weighting" contracts. Is it to keep dollars in Detroit.  Edwards say absolutely.

12:51

Asks Edwards to explain difference between RFP and lowest bid contracts.  Edwards says RFP's are scored.  Minnock asks if Director is involved in that process.  Edwards says not that he knows of.

12:50

Minnock asks Edwards to define prefixes on files, ws water services, cs consulting services, dws Detroit water system (for constriction to rebuild pumping stations)

12:43

Minnock asks if there are several type of contracts, design build, operate and maintain, and asks what kinds of work consultants are hired to do.  Edward says mostly design.

12:45

Minnock asking about divisions within DSWD, asks if Edwards is number two in his department, he was yes.  ASks if he's several levels below Mercado, says yes.

Minnock asks if he administers the contract but someone else inspects the sites.  Edwards says yes, the engineering folks look at the job sites.

12:43

Minnock asks about number of contracts in any given year.  Edwards say he has no clue how many contracts but there were a lot of pre-existing contracts, maybe a hundred at that time.

12:41

Minnock asks if contractors don't always know what they're getting into when they estimate a project.  Edwards says yes.  Edwards say it's very true that department is not big enough to handle big construction projects that it does not have enough people to fix water mains.

12:39

Minnock asking about history of water system dating back to 18th century.  asks if it was built by City being able to float bonds.  Edwards says that's very true.  Minnock asks if the department has a billion dollar budget. Edwards says yes.  Says 800 million goes to replace infrastructure and that sometimes when a water main is dug up they  find the original wooden water main.  Edwards says yes.

12:37

Minnock asks if there were times he didn't know the answers to questions and if the Feds told him about evidence.  Edwards says they showed him documents.  Edwards Says they didn't ask him to draw conclusions. Minnock is shifting gears now. Kinda racked by Edwards last answer.

12:34

Court is back in session. Edwards is on the stand, John Minnock, one of Mercado's attorney's is doing cross.  ASks about Edwards educational back ground, says went to U of M for business administration.

12:26

Blackwell asks if Edwards thinks this is unusual.  He says yes, even if there's nothing wrong it give the appearance of impropriety.  And we're on a break.  BAck in 5.

12:24

Next change order is for 15 million, upping the cost to nearly $40 million.  And now change order number 4 for $15 mil.  Upping the contract to $55 million. Blackwell asks if he remembers the original price.  Edwards says yes, $13 million.

12:21

Now they're looking at change orders.  Mercado signed the document in May 2007.  This is for $6 million.  New total is $19 million. and there are more change orders.

12:17

Edwards says the department has some flexibility, in that if one company wins one contract, the department can either award it the second contract or give the sister contract to another company.

This first contract is for $16 mil, the sister contract is for $13 million.  Ferguson got the first, Lakeshore engineering was recommended for this contract and approved by Water board.  Lakeshore was ranked 5th.

12:13

Now looking at a memo from 2006 about a contract negotiation recommended from contract manager Daryl latimore to deputy director Gary Fujita for review my Mercado.  This one shows the new list of rankings.

Edwards says the 2 contracts they're talking about are sister contracts. 2 related projects occurring at the same time.

12:11

Edwards says this method cost the Department more money, by about $2 mil.

12:08

Memo also states that average cost method was used instead of the usual process.  SAys this method was chosen because of the wide range of prices in the proposals.  Edwards says this rational was told to him by his supervisor. 

12:05

Edwards says there was an issue with Lakeshores HQ cert but there was no cert document in the proposal.  So A&H for a zero score, but then Human Rights found the cert so they had to revise the score again.

Edward says he also wrote notes on the recommendation memo where Ferguson's company was given the top score.  SAys he did this to memorialize what was going on with the bidding process.

12:01

Now looking at same type of documents for a second contract associated with the project.  Blackwell now asking if there was a question about HQ certification for Lakeshore Engineering subcontractor A & H. 

11:58

Edwards say his manager told him to use this method, he's never used it before or since, that it was not a good way to do it, that original bids were good and would have been good for the Dept. and given it good value for the money spent.

11:55

Now looking at a list using the "average cost" scoring method.  Edwards says using this method changed the whole ranking of the proposals.  Visions , E.D.I. 5, superior 3, Jenkins 4, Lakeshore 2, inland waters 6, Ferguson's company now number one (Detroit PRogram Management, the joint venture with Woodhouse.)

11:52

Here's what we've got.  Edwards gets asked to send a letter requesting an investigation into the Headquarters certification of DLZ, which was partnering with Superior Construction, which was the  number one bidder on the list.  The resulting investigation revoked their HQ certification, which meant they were knocked out of the top spot.

Edwards says he was also asked to used an average cost method of scoring which was also out of the ordinary for this type of bidding process.

11:47

Now looking at letter from Human Rights Dept. says DLZ/Superior certification was revoked.  This is to the contracts and grants manager to DSWD.  Mercado was copied but Edwards doesn't know if DLZ got a copy.  Says this came out right before the bid awarding process.  Edwards say this was post dated to before the proposals were due and is unusual because it meant he would have to change DLZ's score.

SAys he was asked to draft the letter by his supervisor but doesn't know why he was asked.

11:43

Edwards say DLZ companies Detroit Headquartered Business designation was pulled after they submitted their bid.  Remember DLZ was managing this group of contracts.  Edwards says he drafted the letter himself.  Says certifications were supposed to be in bid proposals and this was unusual because he was asking for an investigation.

SAys he sent an email to Kim Harris in Human Rights Dept. requesting status report of investigation into DLZ.

Says they needed it quickly because they were in bid process.

11:39

Moving on to evaluation sheet for another contract.  Vision Consultants at top, Lakeshore is 5th or 6th, Ferguson's is last.  Now the weighted rankings kick in.

11:35

Edwards says proposals were sent to evaluators than data was in-putted to this form.  Each evaluator score was calculated, added up, the multiplied by the "weighted percentage"  Then companies were ranked.

Superior Engineering was ranked top,  Lakeshore engineering was 5th,  Ferguson's was at the bottom.

11:32

Now looking at Edward's scoring sheet.  Names are across the top, numbers below, Lakeshore engineering shows up.  Edwards says the columns are divided into section for the 4 evaluators.  Left hand Column hold criteria, like ability to perform work, local econ development, cost, and others.

11:27

Now looking at a letter from Detroit Program Management Team to DSWD.  This was a joint venture between Excel Construction services, which was owned by Michael Woodhouse and Bobby Ferguson for management services.  Team members listed are prime contractors and sub-contractors. Ferguson would  get a 33.2% of total contract.  this is for scoring the proposal based on Detroit bases business and Detroit HQ business.

11:25

Now moving on to a couple more contracts under Request for PRoposals.  So these are "scored" contracts unlike the "lowest bid" contracts.  Edwards recalling companies that put in bids, including Lakeshore Engineering and several others.  Edwards says his role was to see to scoring and making sure the city rules were followed.

11:23

Next contract for #720,195 and 1,729,240.83.  so 2 contracts that ended up costing twice the original amount.

11:20

Now looking at a document prepared by DSWD accounting showing payments made to FErguson under the contract in question.  original CPO (contract purchase order) $821,75, current amount (this includes cost over-runs, $3,115,007.

11:15

ASsistant Prosecutor Blackwell now asking Edwards to take another look at memo recommending that contracts be awarded to 3 lowest bidders.  Edwards is reading off the list, Ferguson is 9.  Edwards says other contractors on the list also got contracts.  Hayes excavating, Ferguson, Eagle, Posen, L. D'Agostini, Lonzo, William McCormick and Associates.

There were also contractors that didn't get contracts.  Glo Wrecking, a minority company.  Some companies did not get awards under the contract.

11:14

Court is back in session.  The Jury is filing back in.

11:02

Okay, so here's what we've got, a lot of tedious detail about contracts, how they're awarded, and who got them.  The gist of the testimony so far is that emergency orders have been used, award recommendations have been ignored, and Ferguson got 2 contracts, one for more than $800,00 and one for $700,000.  Also that change orders requesting more money have bee requested, more money than is unusual in cases like these according to Daniel Edwards.

10:59

Now looking at an emergency request from Kwame to City Council to approve these change order requests.  THere are several other change orders on the list besides Ferguson's.  THe Judge has just asked the prosecutors to slow down a little so she can take notes.  Having a side bar now.  Taking a break for the jurors.

10:57

Now looking at another change order asking for $300,000 more.

10:54

Now looking at a letter requesting a change order for the FErguson Contract of $1.2 million.  THis ups the amount by $4000,000.  Edwards says its not unusual for a change order request but this one is unusual because of the higher than normal dollar amount. 

10:50

Now looking at a letter from Aug 10 2004 from the Dept responding to questions from City Council.  Council asked for list of emergency contracts awarded by DSWD, Detroit Econ Dev Authority... Mercado responded that no contracts were awarded through DEDA .

Lists The emergency contracts awarded including a 2 contracts to Ferguson more than$1.5 million.

10:47

Now looking at a letter of intent to award contract march 22 2004 from Mercado that gives contractors the go-ahead to start work.  This shows that even though Ferguson was number nine on the list he  got a contract anyway.

10:45

Now looking at a Memo from March 18th from Qakish to Mercado recommending that out of ten bids received to award contracts to lowest three bidders.  say Mercado accepted the recommendation.  Letter also recommends re bidding the contract.

10:42

Now they're looking at a fax from the project manager discussing a meeting he had with Hayes and Ferguson representatives.  Edwards says it talks about the  negotiations with  Hayes and Ferguson and when they'd start work.  Indicates that Ferguson hadn't signed a document and wanted to have completion date extended.  March 17, 2004.

10:40

Now they're looking at a list from after the  bid opening that shows the percentage over the low bid.  FErguson was 45% above the low bid.

10:38

Looking now at a list of bidders ranked by price.  Ferguson and another contractor named Hayes are ranked 8th and 9th. Hayes is 8, Ferguson is 9.  Estimated prices range from about $600,000 to $1,000,000.

10:36

Now looking at a list of contracts for Water Systems.  These are for emergency services contracts that allow the Dept to circumvent the usual contract bidding process.  THis group of contracts is worth $3.8 Million.  The emergency request is signed by Mercado.

10:35

Edwards says Ferguson had done work for the DSWD before under the ARcher Admin.

10:31

Edwards says there were 8 construction contracts under this management agreement.  Looking at a letter from DLZ now that discusses 4 of the contracts.  Letter is from MR. Qakish the head of the engineering dept at the time requesting that Ferguson get a contract.

10:29

Edwards say hiring a construction manager is unusual.  the Contract is a with a Company named DLZ for construction management services.  THey over saw the water main reconstruction in the downtown area.

10:26

Now they're talking about a contact to find a company that would over see construction projects as a manager.  THey're now introducing evidence, an Administrative order from 2003 from Mercado to Kilpatrick about water main replacement.  Mercado is requesting the Mayor's signature on a special order to fix mains in the central part of the city. 

10:25

Edwards says a Special Administrator ORder could be used to avoid City Council.  The Special ADministrator is appointed by the Court under the Over Sight Order.  And the Sp. Ad. is whoever is Mayor at the time.

10:22

Edwards says the Human Rights Department had at one time requested that the LED be up to 50% but he says that was a problem because it might give an undue advantage to a contractor who may not actually be able to perform the work.  So if I understand this correctly the Human Department can award up to a 35% score to a contractor's bid.  Then the DSWD adds in all the other factors to weight the  bid.

10:19

Edwards says the 35% gives the contractor points.  The Judge just asked him to explain this further, and he says 35% is a given and then other factors are weighed.  I'm glad the Judge asked him to explain this further but I'm still lost.

10:16

Edwards now describing how Local Economic Development is factored into bid process.  For example, how many subcontractors will be participating in project.  This is certified through the Detroit Human Rights Department.  Says an executive order establishes the  number as 35%.

10:12

Edwards says the RFP process is differs from lowest bid in that certain criteria have to be met and the candidates are scored on whether they are capable of doing the work, 1-10 scale with 10 being the best.  Says there's always a 10 no matter how bad the bids are.  Says say you get a bunch of proposals that are all a pile of crap, you have to find the best of the worst and award that bidder a 10.

10:10

DbD is defined as Detroit Based Business, DHD is Detroit Headquartered Business.  Headquartered business, like GM which is a world wide company but has it's headquarters in the City.

10:13

Edwards now describing "equalization" of bids.  This is aimed at benefiting Detroit based or headquartered businesses.  Says they apply the Detroit based business percentage to bid which lowers the total bid amount.

10:07

Edwards says the RFP would entail a detailed response for a specific project, all prices from excavation to completion.

10:02

We're back underway,  Daniel Edwards is back on the stand.  He's describing the process of how a contract is awarded, including the review and adoption by the City Council.  That's how the "lowest bid" contract works.  There's also the RFP, or Request for Proposal, a separate way to award a contract.

9:42

We're still in recess waiting for the ailing juror and the video feed from the court has been shut down. 

9:29

STill waiting for Juror Number 2.

9:24

Kwame and Jim Thomas have left the court room.  Bobby Ferguson is having an animated discussion with his attorney Gerald Evelyn and the back of the room.  Bobby talks with his hands and puts his whole body into his conversations.  Victor Mercado and his attorney are leaning back in the chairs talking quietly.  That's what it looks like from the overflow room.  We can't hear anything but the general drone of conversations since there are no microphones at the defense table.

9:20

The accusation is that Mercado lied about meetings with Bobby Ferguson and Derrick Miller, and also lied about cost over runs and the completion schedule of a Security Contract awarded to Ferguson.  The Fed's say Ferguson got the contract despite being the high bidder.  They also say Mercado played with the books and took money out of another project to make it look like the SEcurity project was on budget.  STill waiting for the Juror to come back.

9:17

Juror number two just ducked out of the room.

9:15

AP Blackwell asking about contract awarding process under the Consent Decree overseen by the Judge.  Edwards says there are ways to get around Council and the Judge.  Edwards says the Mayor can make awards in certain cases.

9:12

Edwards says Victor Mercado was the head of the DWSD from 2003 through 2008.  It looks like this is going to be about the Fed's charge that "...Mercado committed perjury in an investigation of the awarding of a DWSD security contract authorized by a federal Judge."

9:08

Edwards says there are 3400 miles of water lines, 3500 miles of sewer and rainwater pipes and the DWSD processes 7-hundred-million gallons of sewage a year.

Right now he's explaining that there are permits and compliance rules for releasing treated water and that Detroit has been under a Judge's over site, under court order, and that they have to comply with certain conditions or face fines.

9:06

The Judge is greeting the jury.  And the first witness is being called.  This is Daniel Edwards from the Detroit water and Sewerage Department.  He's a contract manager.

9:03

"All rise"  court is now is session.  The Judge is telling the court that there are two jurors "who are not feeling so great."  Looks like we may be having a few unscheduled breaks during testimony today.  The Jury is filing in now.

8:55

The picture is up, the defendants are in the court room, Kwame Kilpatrick is looking sharp in a dark greenish-brown suit with a pumpkin colored tie.  Don't know if the suit was purchased in Dubai.  It will be hard no to speculate on the wardrobe after hearing last week's testimony.  Check out Elrick's takeaway from Friday if you want more details on the suit buying trip!

8:44

We're set up and ready to go in the overflow room, just waiting for the video feed.  We're in the middle of Extortion phase of the trial.  At the end of last week we heard testimony from three sisters who signed cashiers checks that were eventually turned into cash donations to the Kilpatrick for Mayor Fund.  Today we'll start with new witnesses.

8:24 

Good Morning from the Theodore Levin Federal Court House in downtown Detroit.

-Ken Martinek is Senior Producer -Investigations for Fox 2 News

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