Day 22: Detroit contractor fingers Kilpatrick pal as extorter

A minority businessman was the first contractor to tell jurors about extortion demands from ex-Mayor Kwame Kilpatrick’s close friend and co-defendant, Bobby Ferguson.

Tom Hardiman, an African-American who owned A&H Contractors, testified Friday about dealings with Ferguson over a Detroit water department contract.

Hardiman also has ties to Detroit-based Lakeshore Engineering Services.

Ferguson, helped by Kilpatrick, allegedly extorted both companies out of more than $12.9 million, according to the indictment.

Testimony resumes at 9 a.m. Monday

Updates have ended

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Bobby Ferguson, right, and his defense team outside federal court.

The Kwame Kilpatrick corruption trial ended on powerful and profane note Friday with testimony about an alleged threat by the mayor’s friend, contractor Bobby Ferguson.

“I will shut these jobs down,” Ferguson allegedly told Detroit water department contractor Tom Hardiman in summer 2007.

Ferguson threatened to cancel work unless Hardiman fired contractor Angelo D’Alessandro’s company and hired his firm.

Assistant U.S. Attorney Mark Chutkow asked Hardiman for Ferguson’s exact words.

“He was a little bit more colorful,” Hardiman said. “He said he would shut these f—— jobs down,” Hardiman said.

The project was for sewer and water line work on the east side of Detroit. Ferguson had paired with another contractor and lost the bid to Hardiman’s firm, Lakeshore Engineering Services.

Hardiman said Lakeshore had asked to work with Ferguson but that Ferguson had decided to work exclusively with contractor Inland Waters.

After Inland lost to Lakeshore, Ferguson approached Lakeshore and got a verbal agreement to join their team, Hardiman said.

Bobby Ferguson outside federal court.

Detroit water department contractor Tom Hardiman said he grudgingly paid $620,000 for no-show consulting work to a company linked with Bobby Ferguson.

At least one time, Hardiman got nasty.

Hardiman has described a series of payments to Ferguson and related companies that prosecutors say amounts to extortion by a close friend of former Mayor Kwame Kilpatrick.

Hardiman’s testimony zeroed in on the no-show consulting payments. The payments would be picked up by Xcel Construction Services executive Calvin Hall.

“Did Xcel provide $620,000 worth of services?” Assistant U.S. Attorney Mark Chutkow asked.

“Are you asking me my opinion?” Hardiman said. “No.”

“So why pay it?” the prosecutor asked.

Calvin Hall

“Xcel was brought to us by Bobby Ferguson and we were not going to do anything to upset Bobby Ferguson,” Hardiman said.

At least once, Hardiman handed Hall a check and an insult.

“You’re a parasite,” Hardiman testified he said to Hall.

“Why are you calling him that?” the prosecutor asked.

“Because he was coming in requesting payment for services that I didn’t feel he deserved.”

Hall stood trial alongside Ferguson this summer in a separate bid-rigging case that ended in a mistrial. He is facing a retrial in April and recently said in a court filing that he is broke, unemployed and needs a taxpayer-funded lawyer.

The prosecutor asked if Ferguson knew about the parasite comment.

“He would call me a bunch of names, I would call him some names,” Hardiman said. “At the end of the day, they still consulted for us.”

“Did Mr. Ferguson ever threaten to harm your contracts if you didn’t meet his demands?” Chutkow asked.

“We would have those conversations all the time,” Hardiman said. “He’d say, ‘I’ll get your contracts stopped.'”

Avinash Rachmale

Hardiman eventually told Ferguson to carry out the threat.

Ferguson threatened to call Hardiman’s boss, Lakeshore Engineering Services CEO Avinash Rachmale, according to testimony.

“Avinash would say ‘Tom, I’m not willing to piss Bobby off,'” Hardiman testified.

Bobby Ferguson, left, and lawyer Gerald Evelyn outside federal court.

Detroit businessman Tom Hardiman has a mantra he uses when explaining why he allegedly paid ex-Mayor Kwame Kilpatrick’s friend Bobby Ferguson money for no-show work.

“10 million. Five million.”

Those figures refer to $15 million worth of contracts canceled by the city in 2003 after Hardiman refused Ferguson’s demand for a 25-percent piece of the deal.

The most recent time Hardiman used the mantra Friday was when Assistant U.S. Attorney Mark Chutkow asked why his firm A&H Contractors paid a Ferguson firm $200,000 in January 2008.

“Why?” Chutkow asked.

“Because it was Bobby Ferguson,” Hardiman said. “My decisions were always based on the initial loss of two contracts.”

Business in Detroit, and with Bobby Ferguson, came down to a simple equation, Hardiman said.

“You can have zero in profit or some in profit,” he said. “That’s your choice.”

Bobby Ferguson outside federal court.

Bobby Ferguson allegedly wanted a piece of a businessman’s real-estate company that leased office space to the Detroit Police Department, according to testimony Friday.

Ferguson allegedly told businessman Tom Hardiman he wanted a stake in Sky Group Grand, an offshoot of Lakeshore Engineering Services.

“I said that’s insane,” Hardiman testified Friday during the City Hall corruption trial against Ferguson and close friend, former Detroit Mayor Kwame Kilpatrick.

The Detroit Police Department’s Central District offices on Woodward.

Hardiman’s firm owns a building on the corner of Woodward and E. Grand Boulevard that houses the police department’s Central District offices.

At the time, the department was overseen by Kilpatrick’s mistress and Chief of Staff, Christine Beatty.

Ferguson brought up Beatty when he asked for a piece of Sky Group Grand, Hardiman testified.

“Did you take that as a threat?” Assistant U.S. Attorney Mark Chutkow asked.

“I took that as he was not serious,” Hardiman said.

Earlier Friday, Hardiman said Ferguson was paid $1.4 million for no-show work on a sewer project in the city.

Bobby Ferguson and Kwame Kilpatrick outside federal court.

A Detroit businessman who partnered with Bobby Ferguson to win city contracts focused on keeping the mayor’s close friend happy.

In September 2005, Ferguson allegedly called contractor Tom Hardiman of Lakeshore Engineering Services with a unique demand.

Ferguson wanted $25,000, Hardiman said. That night.

This was according to Hardiman, who took the witness stand during a dramatic day of testimony about how Ferguson — a close friend of ex-Mayor Kwame Kilpatrick — allegedly carried out extortion demands.

After talking to Ferguson, Hardiman agreed to bring the money.

“Why?” Assistant U.S. Attorney Mark Chutkow asked.

“Because it was Bobby Ferguson,” Hardiman said. “I did not want to upset Bobby because he had relationships with key individuals in the city of Detroit.”

“What did you do?” Chutkow asked.

“I cashed checks. I had my employees cash checks. (Partner) Avinash (Rachmale) cashed checks. We got all the money and I went to meet with Ferguson,” at the contractor’s office in Detroit, Hardiman said.

“Were you nervous?” the prosecutor asked.

“Yes,” Hardiman said. “I had never had $25,000 cash on my person before.”

Kwame Kilpatrick outside federal court

A Detroit contractor enjoyed a reversal of fortune after partnering with Bobby Ferguson on a sewer contract proposal in late 2004.

After rebuffing Ferguson’s demand to share a $10 million contract, and then losing the contract in 2003, businessman Tom Hardiman partnered with Mayor Kwame Kilpatrick’s close friend the next year.

Bobby Ferguson

And in March 2005, Hardiman’s firm Lakeshore Engineering Services won a $20 million sewer contract issued by the Detroit Water and Sewerage Department.

There was almost immediate conflict among several partners.

Ferguson and one partner, Angelo D’Alessandro wanted to perform the same work.

To Hardiman, the choice was clear, especially after losing $15 million worth of city contract after refusing to share the deals with Ferguson.

“If it came down to it, Bobby was going to do the work,” Hardiman said.

“Why?” Assistant U.s. Attorney Mark Chutkow asked.

“You want me to go through this again?” Hardiman said, referencing the lost $15 million contracts.

D’Alessandro and another partner on the sewer deal came up with an idea, Hardiman said.

They would give Ferguson money to go away, Hardiman said.

“What was the arrangement?” Chutkow asked.

“$1 million dollars,” Hardiman said.

“For no work?” the prosecutor asked.

“That was the agreement,” Hardiman said.

Bobby Ferguson

A Detroit contractor who lost a $10 million contract after refusing to share the deal with Bobby Ferguson in mid-2003 eventually learned the contract went to a rival firm.

That firm, Inland Waters, won the deal after partnering with Ferguson, minority contractor Tom Hardiman testified Friday. Inland was headed by Grosse Pointe Farms businessman Tony Soave, a powerful businessman who allegedly provided free private flights and other perks to Mayor Kwame Kilpatrick.

In all, Hardiman lost $15 million of work for his firm, Lakeshore Engineering Services.

Mark Chutkow

Assistant U.S. Attorney Mark Chutkow asked Hardiman on Friday about his reaction to losing the contracts.

“My reaction? Stunned. Disappointed. Angry. Concerned,” Hardiman said.

By early 2004, Hardiman’s firm was preparing to bid on a sewer project in Detroit.

This time, Lakeshore partnered with Ferguson — a close friend of Mayor Kwame Kilpatrick.

“After losing the $10 million and a $5 million contract, and seeing the contracts Bobby Ferguson was on, and those were not getting canceled, I said maybe he’s the right person to have on the team,” Hardiman testified.

“Why?” Assistant U.S. Attorney Mark Chutkow asked.

“First, he could do the work and he had the ability to navigate in the city of Detroit based on all the contracts we saw that he was on,” Hardiman said.

Detroit businessman Tom Hardiman was desperate after balking at Bobby Ferguson’s demand for a 25 -percent share of a $10 million water department contract.

Kwame Kilpatrick

Hardiman’s $10 million water department contract had stalled. Same thing with another $5 million deal after the Lakeshore Engineering Services businessman rebuffed Ferguson’s demands.

Hardiman couldn’t reach Mayor Kwame Kilpatrick in 2003. The mayor’s mother, Congresswoman Carolyn Cheeks Kilpatrick didn’t help.

“No one was giving me an answer,” Hardiman testified Friday. I was upset. I couldn’t reach the mayor. I couldn’t reach anybody.”

His City Hall contacts weren’t helpful.

Hardiman and partner Avinash Rachmale got an idea.

They called the mayor’s dad, indicted consultant Bernard Kilpatrick.

Then, they hired his consulting firm, Maestro Associates. Lakeshore wrote the firm a $2,500 check in February 2003.

But three months later, Detroit Water boss Victor Mercado canceled the contracts.

“These were significant for us and there was no logical reason for us,” Hardiman testified.

Indicted contractor Bobby Ferguson paid a visit to the home of a minority Detroit businessman who won a $10 million water department contract in 2003.

“Mr. Ferguson came to my house, he was saying he needs to be part of the contract,” businessman Tom Hardiman testified Friday. “I said we’re full, we had our team together at that point. He said it still had to go across the mayor’s desk.”

Bobby Ferguson

Hardiman, president of A&H Contractors,  is testifying during the City Hall corruption trial about extortion-related allegations involving Ferguson and his friend, ex-Mayor Kwame Kilpatrick.

Hardiman testified Friday that Ferguson demanded a 25 percent piece of the deal, worth $2.5 million. Hardiman, who also had a business relationship with construction firm Lakeshore Engineering Services, offered 10 percent.

Ferguson had a response.

“We’ll see,” Hardiman testified.

The contract soon stalled.

Victor Mercado

Hardiman tried calling Detroit Water boss Victor Mercado. His calls went unanswered.

Hardiman was surprised because he had served on Kilpatrick’s transition team after the 2001 election, donated money to his campaign and held fundraisers.

“I didn’t see any reason why I couldn’t talk to him,” Hardiman said.

Hardiman tried calling Kilpatrick’s mom, U.S. Rep. Carolyn Cheeks Kilpatrick.

She relayed her son’s comments.

Former U.S. Rep. Carolyn Cheeks Kilpatrick

“My son said ‘mom, I love you, but I handle city business and you handle the government’s business,'” Hardiman recalled Friday. “‘Let me handle the city’s business.”

Ferguson, with help from Kilpatrick, extorted A&H and Lakeshore out of more than $12.9 million, according to prosecutors.

In one instance, Ferguson allegedly extorted $540,000 from A&H, pressuring the firm to pay the money for consulting work it did not need as part of a deal to keep a lucrative construction contract, according to prosecutors.

The Detroit News first reported in December 2010 that the upcoming City Hall corruption indictment would focus on water department deals involving Lakeshore and A&H.

Yet another multimillionaire businessman allegedly extorted by Kwame Kilpatrick and Bobby Ferguson has a public relations expert to handle fallout from the corruption trial.

In this case, Grosse Pointe Farms trash titan Tony Soave’s PR pro is unhappy.

Tony Soave

Kelly Rossman-McKinney doesn’t want to talk about Soave allegedly bribing Kilpatrick with private flights, as alleged in court filings. She is mum about her client allegedly giving Detroit’s former mayor $10,000 worth of courtside Detroit Pistons tickets and allegedly helping Kilpatrick’s mistress Christine Beatty lease a Land Rover.

She also refuses to discuss earlier testimony that Soave flew Kilpatrick and others to Bermuda on a private jet?

“Of course not – trial is still in progress and we won’t comment until the trial has concluded,” she write in an email. “But nice try!”

Write about Soave’s connections with known mob associates, however, and Rossman-McKinney has plenty to say:

“I was really disappointed in the attention you paid to alleged mob connections — a stereotype Tony has fought for years. To reference a 1999 story that refers to a 1991 report that mentions a 1971 arrest that was not just dismissed but then expunged seems like a deliberate effort to sensationalize Tony and paint him in a negative light. You could — and probably should — have also mentioned his tremendous support for important community assets, including the DIA and St. John’s Hospital.”

What does Soave say?

We could hear from him as early as next week. He’s a key government witness against Kilpatrick.

Robert Snell
Robert Snell is the Detroit News federal courts reporter. He can be reached at rsnell@detnews.com or (313) 222-2028.