Live Blog: Kwame Kilpatrick Trial Day 25 - Fox 2 News Headlines

Live Blog: Kwame Kilpatrick Trial Day 25

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And that's it for the day.  The judge excuses the Jury and wishes them a pleasant evening.  M.L. Elrick will have the highlights tonight on Fox 2 news at 5 and 6.  He'll also have his daily take away on  Talk to you all again tomorrow.


Chutkow now showing a change order approval.  It's dated 5 days after the Johnson Consultants invoice. 

Chutkow is now showing the check RAchmale used to pay Ferguson.  RAchmale says it's from Lakeshore, date is 10/7/2005, for 173,000.  Rachmale says it's the first payment on the invoice.

Now Chutkow is showing Rachmale a check for another 15,700.  This is from Sky GRoup to Johnson and A and F environmental.  Signed by Rachmale.  Sky Group is the real estate arm of Lakeshore.

Rachmale says because they didn't get a signed contract from Bobby Basque of accounting procedures it was hard write a check from Lakeshore.

Says the first check came from Lakeshore but his company accountants were asking question about what it was for.  Rachmale says it was easier to pay from Sky Group because his employees would be asking fewer questions.  Says he moved it to Sky Group so word would not get back to Ferguson.  Didn't want Ferguson to get upset, says Ferguson would say why are they talking about my moony?


Let me back track a little here, Hardiman testified earlier that Bobby had demanded that he get paid right away when the change order money came in.  Hardiman said he thought Bobby was demanding cash.

Chutkow now showing and invoice from Johnson Consultants, owned by Bobby's wife.  RAchmale says Hardiman gave it to him, that it came from Ferguson.  RAchmale says he never asked Bobby why this invoice came from the wife's company.

Chutkow asking about services listed on the invoice.  RAchmale says neither Bobby's or his wife's company ever provided the services or equipment or materials listed on the invoice.  It's for 450,000.  RAchmale says it was a payment for the change order on the outfalls and the unrelated asbestos contract.

Chutkow asks if the description in the invoice is false.  RAchmale: Yes.


RAchmalle says Hardiman told him Bobby needed money "today" so they had several people cash checks to raise the cash to pay him.  RAchmale says Hardiman said he needed it so they got the money.


Chutkow now asking about change orders on this contract.  RAchmales says the city asked them for a proposal for some new work related to the project they were doing.  6 more outfalls.  RAchmalle says that would add $6 million to the contract.

RAchmalle says he didn't talk to Ferguson but Hardiman did.  RAchmalle says after that talk he agreed to give Bobby an additional 5%.  RAchmale says Bobby would also get a percentage of the asbestos contract that amounted to around $75,000.

Chutkow asks if Bobby had anything to do with the asbestos contract.  RAchmale says no, they gave him money on a completely unrelated contract that Bobby had nothing to do with so Bobby wouldn't prevent them from getting the sewer outfall change orders.


RAchmales says once the job was awarded they'd sit down with the team members and work out a contract.  That if a dispute could not be settled that team member would be kicked out.

Chutkow now asks why pay Ferguson anything, why not just get another contractor.  RAchmale says they already lost 2 contracts and didn't want to make Bobby mad.

Chutkow asks if they ever put Bobby's contract in writing.  RAchmale says no.


RAchmale says as Lanzo finished a task, a pay application was submitted to the city, and when the city paid that, they'd pay Bobby.

RAchmale says work was delayed.  That Bobby didn't take any risk on the project,d supplied no bonds, occurred no costs.  RAchmale says a million dollars was not a fair price but he didn't want to upset Bobby.  SAys he thought Bobby was going to at least do some work but after the dispute was settled Bobby did no work.


Chutkow now showing a letter from to Hardiman from Mercado dated March 2005.  SAys DWSD is ready to enter into a contract with Lakeshore and authorizes work to begin immediately.  RAchmale says they'd start work within 10 days.

Says they started negotiations with team members.  RAchmale says he didn't Talk to Bobby but Hardiman did.  Work didn't start right away because there was a dispute between Bobby and other team members about the line items in the contract.  Lanzo and Bobby.

Rachmale says from what he understood...  EVelyn objects.  Chutkow now asking if RAchmale was concerned about who was going to be doing the line items.  RAchmale says Bobby wanted to do some specialized lining work that was already assigned to the lining company.

RAchmale says the mediated the dispute, Hardiman briefed him on the meetings, and it was resolved that Lanzo was going to do the work and Bobby was going to get a million bucks.


Chutkow asks if RAchmale asked Bobby to contribute to the contract proposal.  RAchmale says he didn't ask him much, that he didn't want to upset him, that yes someone who was getting a 1/3rd share would usually do more but he didn't want Bobby to get upset.


Chutkow asks if Hayes went out of business.  Evelyn objects saying there's no foundation.  The Judge explains Chutkow is just asking if RAchmale knows the company went out of business, he's not asking why, and allows the question.  Rachmale says yes.


We're moving on to the contract where Lakeshore decided to accommodate Bobby and make him part of the team. Chutkow asking how they decided what percentage of the contract each team member would get.  Rachmale says they split it up based on what work each team member would do.  The team members were actually sub contractors and that the subcontractor contracts were not worked out until after the city gave it's award.

Rachmale says Lanzo was the lining contractor but Bobby wanted to split the contract into 3rds.

  Rachmale says it's the first proposal he teamed up on with Bobby and did it so they wouldn't lose the contract.


Chutkow now showing a letter from Lakeshore to Darryl Latimer of DWSD and RAchmale is explaining that the project manager puts the team together, hires the subcontractors, makes sure the bonds are in place, and that it would be Lakeshore, in this case, that would get the contract.

RAchmale says the most important team member would be the lining company because they have the technical expertise.  Remember that RAchmale testified earlier that Hayes, which did the outflows, was one of only two companies in Detroit that had this expertise.


We're back, the Judge is explaining to the jury that Rachmale's testifying that Hardiman told him that Bernard told him to meet with Bobby was not offered for the truth of it.  In other words, the jury is not supposed to consider if the hearsay statements are true, only that RAchmale believe it was true and goes to his state of mind which goes to what he did next.  I think she explained it better.

RAchmale is now explaining why he thought it was a mistake to include Bobby.  He says because he didn't include Bobby, and because Bobby was connected to the Mayor and the Director's office, Bobby could "save" the project.  Rachmale says it was Bobby's political connections that got the contracts canceled and Bobby would need to be put on the team if they wanted to do any more work for the city.


and we're on a 5 minute break.


Chutkow now showing letter saying project was canceled and work would be done under an already existing contract.  RAchmalle says this was devastating and had stomach aches and couldn't come to the office for a while.

RAchmalle is a neat and tidy, and elegant man originally from India.  But he doesn't look delicate.  Not as rough and tumble as Hardiman, but even though he sounds thoughtful and deliberative he's not hesitant.

RAchmale says he never got any answers.  When Chutkow asks if he considered leaving Detroit Rachmale answers that he landed here in Detroit, got his education in Detroit, and has a lot invested in Detroit, so he didn't leave Detroit.

RAchmale says they concluded they didn't have the right team members on their team, that they should have added Bobby to the team.


Now Chutkow is asking if Mercado's letter was dated Feb of 2003.  RAchmale says yes.  Now Chutkow is showing an email Rachmale sent to MErcado.  It's asking for an appointment request, they want to talk to MErcado about why the contracts were pulled. 

Rachmale says he met Mercado at some gathering somewhere, along with 2 other contractors, and asked Mercado at that time if they could meet.

We're now looking at another email from Rachmale asking for a meeting.  Dated June 30,2003.  It's than a month after the Bobby and Kwame texts.

RAchmale says he never got the requested meeting with Mercado.


Chutkow now showing text messages between Bobby and Kwame about this contract.  RAchmale says he didn't know Bobby and Kwame were talking.  text is from April 23, 203, the acceptance letter is from 2 months before, Chutkow points out.  Rachmale affirms.


RAchmalle says he was stunned, that Lakeshore was a small company and this was devastating.  And he adds that they couldn't get any answers.


Chutkow asks his reaction was to being forced to meet with Bobby about the contract.  Rachmale says he told Hardiman to meet with Bobby.  Also says he paid Bernard $2500.  SAys Bobby came late for the meeting, had a salad, was quiet, and when asked if he could help them Bobby said he didn't know anything.

RAchmales says it was a cut and dry discussion and Bobby had nothing to tell him.

This is all about that first $10 million contract that was awarded then pulled.  Now they're talking about the $5 million contract, Hardiman's now famous "10 million, 5 million."

Rachmale is now reading minutes from the Commission meeting, says the minutes say award the contract but it was pulled from the agenda.  SAys he was surprised.

Now looking at a letter from Mercado to Rachmale saying the project was canceled.


This is another hearsay challenge.  Judge Edmunds is now getting the attorneys views on whether this meets the RICO exceptions to hearsay.

ANd we're back.


Rachmale says it means, "We're ready to go to work."

Chutkow asks if Bobby came around asking to be part of the contract.  Rachmale says Bobby approached his partner Tom Hardiman, that Hardiman wasn't happy, and didn't want to do it.

Chutkow asks if giving 25% to Bobby meant kicking off Hayes.  Rachmale says they'd have taken pieces from all the partners.  Says the contract wasn't moving through the city, says they usually start within a month of signing a contract but it had been 2-3 months and they were concerned.  RAchmale says he asked Hardiman to talk to his city contacts to find out why they weren't getting authorization to start work.

Hardiman reported back that nobody knows anything and they finally went to meet with Bernard.

SAys Bernard told them he'd help.  RAchmale says Bernard was retained as a consultant.  Says Hardiman told him Bernard said to reach out to.... and we have an objection and a sidebar.


Chutkow now showing a letter from Derrick Latimer of the water department to Lakeshore.  It's a letter saying "Enclosed for your review and acceptance is the Detroit wAter and Sewerage Department proposed contract."

Rachmale says they signed the documents and sent them back.

Now he's showing a memo from Mercado to the water board of commissioners saying the contract should be given to Lakeshore.  It's from 2003.

Chutkow now showing the response from the commission accepting MErcado's recommendation and Mercado's signature.  Rachmale says that means, "we got the contract." 


Rachmale says in 1994 he was the sole employee of the company, wore the hazmat suit and did the digging and drilling.

Chutkow now asking him about a sewer contract proposal submitted during the Kilpatrick administration reign.  He's asking what 100% Detroit BAsed Business means.  RAchmale says all the workers and all the companies would be from Detroit.  SAys it was important for him to put Detroiters in jobs.

The partners are Lakeshore, Lanzo, Hayes, Detroit Constructing, and Cole Financial Services.

Rachmale says Hayes would do excavation and reconstruction.

Says he chose Lanzo because they'd worked together in the past and had the "in situ" technology.


During the break one of the defense attorneys was joking about the "exciting" testimony about sewer lining.  It is pretty dry information about stuff that's wet and yucky, but from my view point it's thrilling because it's not more of the same stuff we've been hearing for the last 5 days. 

And the Bailiff says, "All rise. Court is now in session."


Chutkow asking how many companies could do this back during the Archer Admin.  RAchmale says 2. Lanzo and Helen.

Judge Edmunds just called for a 20 minute break.


RAchmale is now talking about the engineering details and chemicals used to clean up and line the sewers.  He says they pull a "Sock" through the pipe, fill it with hot water, and the material melts on the side of the pipes.  Says they don't have to dig up sewers to fix 'em.  Sounds Pretty cool.  Says it's a great way to fix up sewers in a place with skyscrapers and lots of traffic.  It's called "Cured IN Place" technologies.


It's interesting that RAchmale is an expert in asbestos removal, and claims to have been saddled with Bobby on the sewer contracts, but it was Bobby who did the demolition and asbestos removal of the Motown Building and also had the asbestos removal contract at the Book-Cadillac renovation.  Bobby has no asbestos removal qualifications that I know of, yet instead of getting a piece of a contract, like we've seen come up in earlier testimony, he got the whole thing.  We had several complaints about dust and fibers floating around when the Book-CAdillac was being renovated. 


We're now looking at pictures of the inside of an outflow, it's gross,  filled with brown sludge and stuff dripping off the walls.  RAchmale says they have to check for poisonous gases before sending in workers.  He says in the smaller pipes they send in cameras.  Man if there was ever a job for a robot this is it.

Rachmale says that when they clean these up they have to build coffer dams so the sludge doesn't get into the river.

RAchmales says it's complicated and dangerous because of the toxic gases.


RAchmale says he supported the Mayor's first campaign and chaired a section of his transition team.  Mark Chutkow for the prosecution is now handing him a document.  THis is a letter check to the Kilpatrick Civic Fund for $25,000.  From Lakeshore and signed by RAchmale.  From 2008.

Chutkow now asking about Lakeshore's city work under the ARcher ADministration.  Rachmale says they did asbestos abatement work.

RAchmale says they also did some inspection work on sewer outfalls, worked with Lanzo and another company named Helen Construction.  Did lining work and reconstruction.

RAchmale says an outfall is where the sewer system empties into the river.  If there is too much water in the system the over flow goes out the outflow.  Says sludge builds up in the pipes and Lakeshore employees have special training to deal with PCB's and other toxic substances that build up in the sludge.  Says you can't just sweep it out into the river.


Rachmale is now talking about how he bought a building on Woodward that was on the state demolition list.  Says they fixed it up and put a bunch of local people to work fixing it up.

Says the Economic Coalition is a non-profit that helps train workers.  SAys there was a "second chance" program for troubled youth, who had been in jail.  Now some work for his company and some own their own businesses.


Rachmale is testifying about the early days and meeting Hardiman.  What's really interesting is his testimony about Hardiman's compensation package after Hardiman sold his shares in the company.  It appears that they haven't arrived at a figure yet because they are still financial ties between the companies.

Rachmale says he put Hardiman on staff for a small salary with the idea that he would mentor Hardiman and his company.  That eventually turned into a long term partnership and Rachmale says Hardiman is still on the advisory board, as chairman, and advises on going after new jobs.

RAchmale says the Lakeshore Group has between 200-300 employees in Detroit alone.

Lakeshore Toltest, Sky Group, Lakeshore Health, and Lakeshore EConomic Coalition and all the companies in the group.

Lakeshore Engineering and Toltest merged in 2010.


Chutkow is now asking about the specific document just entered by EVelyn.  Evelyn is objecting because it's a topic brought up in Direct.  The Judge says you just brought up this document.  Chutkow asks one question.  Did you ever tell Oden you were being extorted.  Hardiman says no.  And Hardiman is finally finished.

AVinash Rachmale is taking the stand, he's the top guy at Lakeshore.


The Judge just explained to the Jury that she sustained the prosecution's objection to one exhibit but will allow the second one Evelyn wants to introduce.  He's showing that document, a certificate of Liability insurance, to Hardiman now.  Hardiman says he remembers the bond part but not the liability insurance part.  Hardiman says the document shows the certificate holder was Lakeshore and it's from Bobby's company.

Now Evelyn is showing another document.  THis is an email from FEI says please confirm that this will be a direct contract with Lakeshore.  It's a request for work in 2010.

Okay, so the top part is from Colt Oden of Lakeshore asking about the direct contract and the bottom is a reply from Ferguson's company.

Evelyn is now moving on and asking him about coercion and extortion allegations.  Hardiman says he did not personally feel threatened by him.  Unless I missed something, EVelyn never really connected the liability insurance to a contract.  The whole point of bringing it up was to show that the governments allegations that Bobby horned in on work without contributing to the project was wrong, but it fell flat.

Chutkow objected again to the line of questioning about the extortion, then EVelyn said he's just terminate his cross.... and now we're in yet another sidebar.


This was a pretty long sidebar.  Evelyn is now showing Hardiman a document.  Chutkow just asked another question and we're going back into another sidebar.  All the attorneys except Rataj and Can Duesen went to the table but Bobby got up and whispered in Rataj's ear, now he's going up to the bench as well.


Evelyn now being admonished by the Judge for "re-plowing" what they did on regular cross examination.  He's standing in silent contemplation now at the podium, going over his notes.  He's handing Hardiman a document now.  Nope, we're going into a sidebar.

This issue is that Evelyn is basically re-doing his cross examination, which took about 3 hours.  Once he's done... he's done.  He can't go back now, he can only deal with the topics on redirect.  The process is one of constant refinement.  The broad outline is brought out in Direct examination.  The Defense gets to Cross examine on those topics and bring up counterpoints.  The prosecution then gets to refined further any questions brought up in Cross during RE-Direct, then the prosecution gets the last word but must deal only with what was brought up in Re-direct.


EVelyn now asking if Hardiman had his own legal concerns when agents showed up at his door.  Hardiman says yes he was concerned. 

Evelyn wants to know if Bobby called him an idiot.  Hardiman says the relationship developed that way over time. 

Evelyn asks if Hardiman remembers testifying that he didn't like paying people.  Hardiman says he doesn't remember saying it in that way.  THat he didn't have a problem paying people if it was fair.


Hardiman is testifying that he told the Mayor during his campaign that he would never ask for special consideration but wanted access if he ran into a problem.

The Judge is now telling Evelyn that his line of questioning is not in keeping with the prosecutions re-direct.  The rules are that Evelyn can now, only ask questions pertaining to what the prosecutors asked when they did re-direct, he had his chance to ask questions on cross examination and now must stick to the topics on re-direct.

Evelyn asks if Hardiman said he got no special consideration.  Hardiman says not personally.


The Jury is in and the Judge reminds Hardiman that he's still under oath.  Gerald Evelyn is doing the questioning.  He's asking Hardiman about what he told the government during his first interview by agents.


The video feed is up in the overflow room and we're just waiting for the Jury to come in and Hardiman to take the witness stand.  "All rise." Judge Nancy Edmunds is on the bench.


Tom Hardiman will take the stand again this morning.  He's  had a tough time remembering details when being questioned by the defense about his  company, employees, and how  much he got after selling his interest in Lakeshore engineering, but he sure remembers those two contracts that got pulled.  "10 million, 5 million." 

The big score by the defense yesterday was a letter written by a Lakeshore engineering employee praising Bobby Ferguson's work after the "climate of Fear" was over.  But it took so long to get there, and was buried under so much clutter that it really didn't come across as a big deal.

As my friend and colleague M.L. Elrick mentioned yesterday, "Justice may be blind and all that, but it's certainly not impatient."  I might add, blind and tedious.  We'll see if Ferguson's attorney Gerald Evelyn can get anything more out of Hardiman today besides, "I don't recall" or "I don't remember."  Those phrases seem to have replaced, "5 million, 10 million."


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

Ken Martinek is Senior Producer-Investigations for Fox 2 News.  You can contact him at

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