Day 39: Kilpatrick met with Mercado in suburbs, new allegations ahead

A day short on drama included a scoop that was never addressed.

With federal prosecutors set to add new allegations to their claims against former Mayor Kwame Kilpatrick, they said they’d be talking about a recreation center in Detroit.

However, after adding new text messages to their list of evidence, they never got around to talking about Heilmann Recreation Center, whose $8.5 million renovations were done in part by contractor Bobby Ferguson’s Xcel Construction.

U.S. EPA special agent Carol Paszkiewicz detailed text messages, however that showed additional contact between Ferguson, Kilpatrick and former water boss Victor Mercado.

For instance, as crews scrambled to fix a massive sink hold caused by the collapse of a huge sewer line in Sterling Heights, Ferguson and Kilpatrick were apparently schemed to get work for Ferguson on the project.

At one point, Ferguson texted Kilpatrick about a plan: “We need to (meet) on how I move in, I got a great idea sir.”

Prosecutors allege that Inland and D’Agostini ultimately agreed to pay Ferguson $350,000, even though his company did no work.

Although the indictment against Kilpatrick and Ferguson contained a few of the text messages, others shown in court Wednesday reveal that Kilpatrick was asking about the plan and meeting with Victor Mercado, then director of the sewer department.

Other evidence showed that Ferguson and Mercado were also in contact and other evidence showed that Ferguson and Kilpatrick met privately with Mercado at his West Bloomfield home.

Before he pleaded guilty to a single count of conspiracy in November and was removed from the defense, Mercado’s attorneys had argued he was “outside the circle of trust” that included Kilpatrick. But the texts, as well as phone logs, show he had frequent contact with Kilpatrick and Ferguson.

Later in the day, Assistant U.S. Attorney Mark Chutkow took Paszkiewicz through the maze of City Hall, going department by department to determine where the ulitmate power existed in the city.

Her answer, over and over: “The Mayor.”

Who could hire the law director? “The Mayor.”

Who was the boss of the head of the human rights department? “The Mayor.”

Who appointed the water and sewer boss? “The Mayor.”

Defense attorneys have repeatedly shown a document that lists all the people who signed off on a contract for sewer repairs. Kilpatrick’s name is nowhere on the document and attorneys have gone over it — and over it, and over it — to point out that finance, city couincil, the board of water commissioners all had to sign off. But not Kilpatrcik.

Paszkiewicz did mention him, though. After going over former water boss Victor Mercado’s employment agreement, which said he worked at the discretion of the mayor, Chutkow had one more question: “And who was the mayor at the time?”

“Kwame Kilpatrick,” the agent replied.

Live Updates Ended

Please read below for an archived view of this event.

Contractor Bobby Ferguson had a chunk of the $8.5 million renovation of an east-side recreation center that is expected to be at the center of new corruption allegations.

Assistant U.S. Attorney Mark Chutkow has said today the next “chapter” in the government’s case against Kwame Kilpatrick and Ferguson will be about a recreation center. Prosecutors are skipping ahead because of injuries sustained by defense attorney Susan Van Dusen.

City records show that Xcel Construction, a Ferguson firm, was a contractor on the project to revamp the Heilmann Recreation Center, south of State Fair and east of Hayes.

The old center was demolished and a new building constructed, complete with a gym, a pool and work out rooms. The work was highlighted in a 2006 list of recreation department accomplishments. The project was done jointly by the city recreation department and the Detroit Building Authority.

It’s unclear what the allegations will be; they were not leveled in the 100-page indictment.

New evidence shown Wednesday indicates former Detroit water boss Victor Mercado met privately at his West Bloomfield Township home with contractor Bobby Ferguson and former Mayor Kwame Kilpatrick at the same time the former mayor was considering whether to extend Mercado’s contract with the city.

Text messages indicate Kilpatrick twice went to Mercado’s house to talk, once on a night in which he planned to watch a Beyonce concert with his former chief of staff, Christine Beatty.

He later also went to Mercado’s house, according to text messages and an item in his daily calendar, with Ferguson.

Prosecutors have alleged that Mercado was an integral member of the conspiracy that steered millions of dollars in water and sewer work to Ferguson’s companies.

Before he pleaded guilty to a single count of conspiracy in November and was removed from the defense, Mercado’s attorneys had argued he was “outside the circle of trust” that included Kilpatrick. But the texts, as well as phone logs, show he had frequent contact with Kilpatrick and Ferguson.

Prosecutors are expected to introduce new allegations today in the Kwame Kilpatrick public corruption trial relating to a recreation center on the east side of Detroit.

The allegations are not identified in the indictment of Kilpatrick, his father, Bernard, and contractor Bobby Ferguson.

But defense attorneys said prosecutors are allowed to add evidence to the case as the trial develops. It’s unclear what the allegations will be or who they will focus on. However, Bernard Kilpatrick’s attorney, John Shea, said they do not involve his client.

Attacking the claim that Kwame Kilpatrick hadn’t approved a controversial sewer contract — and therefore couldn’t have held it up — a federal prosecutor on Wednesday turned a federal agent into a automaton.

Assistant U.S. Attorney Mark Chutkow took U.S. EPA special ageny Carol Paszkiewicz through the maze of City Hall, going department by department to determine where the ulitmate power existed in the city.

Her answer, over and over: “The Mayor.”

Who could hire the law director? “The Mayor.”

Who was the boss of the head of the human rights department? “The Mayor.”

Who appointed the water and sewer boss? “The Mayor.”

Defense attorneys have repeatedly shown a document that lists all the people who signed off on a contract for sewer repairs. Kilpatrick’s name is nowhere on the document and attorneys have gone over it — and over it, and over it — to point out that finance, city council, the board of water commissioners all had to sign off. But not Kilpatrick.

Prosecutors, however, have said Kilpatrick conspired to hold up contracts in order to steer work to his friend, contractor Bobby Ferguson.

Paszkiewicz did mention him, though. After going over former water boss Victor Mercado’s employment agreement, which said he worked at the discretion of the mayor, Chutkow had one more question: “And who was the mayor at the time?”

“Kwame Kilpatrick,” the agent replied.

As crews scrambled to fix a massive sink hold caused by the collapse of a huge sewer line in Sterling Heights, Bobby Ferguson and former Mayor Kwame Kilpatrick were apparently scheming to get work for Ferguson on the project.

Text messages and phone records indicate the pair were talking about how Ferguson’s company could get a cut of the work, which was overseen by Inland Waters Pollution Control.

At one point, Ferguson texted Kilpatrick about a plan: “We need to (meet) on how I move in, I got a great idea sir.”

Prosecutors allege that Inland and a subcontractor ultimately agreed to pay Ferguson $350,000, even though his company did no work. His company was paid $3.1 million for other work on the project, U.S. EPA special agent Carol Paszkiewicz said.

Although the indictment against Kilpatrick and Ferguson contained a few of the text messages, others shown in court Wednesday reveal that Kilpatrick was asking about the plan and meeting with Victor Mercado, then director of the sewer department.

Other evidence showed that Ferguson and Mercado were also in contact.

Inland officials, including former executive Kathleen McCann, were apparently nervous that payment on the repairs was being delayed. In September 2004, a source for Inland, Bernard Parker III, told them he had met with Kilpatrick “during the weekend and amendment is held up until FEI is satisfied.”

It wasn’t until the next March that Inland and a subcontractor agreed to pay Ferguson, prosecutors allege.

As Bobby Ferguson was sparring with Inland Waters of Ferguson’s roll in a $50 million sewer repair contract, he was in contact with former mayor Kwame Kilpatrick, and he had his eye on how both would be affected.

Text messages revealed this morning show Ferguson and Kilpatrick talking about the negotiations between Inland and Ferguson Enterprises — negotiations that a former Inland executive said were contentious and unusual. McCann and her former boss, Tony Soave, have said Kilpatrick held up the contract until Inland hired Ferguson.

On Nov. 11, 2002, Ferguson sent a text message to Kilpatrick, updating them on a meeting with Inland officials.

“I meet with them cool, you know i don’t cry for s*** that don’t help both of us I didn’t push the % issue I turn in budget (numbers), for site work, what we need to do is talk about that f*** soave,” Ferguson wrote.

Inland and Ferguson were trying to figure out how to get Ferguson at least $10 million in work and McCann said she was worried that the contractor was stalling negotiations on purpoose.

Two years later, Ferguson was still meeting with McCann and Inland and he wasn’t happy. After meeting with her on Sept. 2, 2004, Ferguson sent a short message to Kilpatrick.

“I had a meeting with kathlien (sic), b*** had the nerve to try to punk me out,” he wrote.

Kilpatrick’s reply: “Lol.”

Hold that thought.

The injuries suffered by Bobby Ferguson defense attorney Susan Van Dusen have prompted an abrupt shift in the Kwame Kilpatrick public corruption trial today.

Van Dusen had been questioning Kathleen McCann on Monday when, during  a break, Van Dusen fell and suffered facial injuries.  She will not be in court today as she continues her recovery, said fellow defense attorney James C. Thomas, who represents Kwame Kilpatrick.

Instead, federal prosecutors are expected to begin a new chapter in the case, raising questions about a city recreation contract.

McCann, a former executive of Soave Enterprises, an alleged extortion victim of Ferguson and Kilpatrick, will return later to finish questions, Thomas said.

When Kwame Kilpatrick’s corruption trial resumes this morning, you can be assured that 16 people will be paying close attention: The jurors.

With every day, more and more jurors have felt comfortable asking questions, either of U.S. District Judge Nancy Edmunds or prosecutors and defense attorneys. More than half of the jurors have at one point interrupted the proceedings.

The first time occurred weeks ago as an FBI agent and defense attorney John Shea disagreed over a pronoun in a recording played in court. As they mildly argued (Shea was ultimately right), a young female juror blurted out the obvious:  “Can we hear it again?”

We did.

I’ve spent most of the trial in the courtroom and have become familiar with the jurors and their questions: Could a document be shown again? Could a witness repeat an answer? What exhibit number was that? The attorneys always oblige.

But last week, the attorneys and Edmunds appeared surprised when one question went directly to witnesses Karl Kado, a former Cobo Center contractor.

There was an awkward silence. But Kado answered. Later, a question went directly to  Tony Soave, a wealthy Grosse Pointe Farms businessman. He looked back and said he wasn’t sure but he could get his people to get the answer.

If you would have thought the jury would be bored by now, you’d be wrong: Almost every day, they take detailed notes and their questions, which are promptly answered, make clear that they are listening intently to a case that could send Kilpatrick, his father Bernard and contractor Bobby Ferguson to prison for 20 years.

Mike Wilkinson
Mike has been a reporter at The Detroit News since 2006.

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