Feds refocus Kilpatrick case on climate of fear

Avinash Rachmale

Prosecutors refocused testimony Tuesday from a businessman who was bruised by defense lawyers over his cozy ties with a City Hall insider.

The government asked businessman Avinash Rachmale how he feared losing city contracts unless he paid ex-Mayor Kwame Kilpatrick’s friend Bobby Ferguson $1.7 million for no-show work.

The so-called “climate of fear” is an essential part of the government’s racketeering case against Kilpatrick, Ferguson and the ex-mayor’s father, Bernard Kilpatrick.

“If you had not been worried about your contracts being canceled, would you have paid Bobby Ferguson $1.7 million?” Assistant U.S. Attorney Mark Chutkow asked.

“No,” Rachmale said.

“You testified that you didn’t want to upset Mr. Ferguson. Did you have that concern about any other subcontractors working with you?” Chutkow said.

“No,” Rachmale said.

The government also tried to dampen the impact of defense questioning, which revealed Rachmale’s company Lakeshore Engineering Services, often teaming with Ferguson, received city deals totaling $157.8 million during Kilpatrick’s tenure.

Rachmale said the large dollar amount is misleading.

Most of that money — 92 percent — goes to subcontractors and to pay for supplies.

Lakeshore is left with about eight percent.

“Did your company actually do the work for that $12 to $13 million?” Chutkow asked.

“Yes,” Rachmale said.

“You didn’t receive any no-show payments?” the prosecutor asked.

“No,” Rachmale said.

Rachmale’s company, which grew into a federal contractor with defense projects in Afghanistan and Iraq and deals worth about $500 million, has suffered, the businessman said.

“Have you ever felt that you had to pay a contractor because you were afraid the contracts would be canceled otherwise?” Chutkow asked.

“No,” Rachmale said.

Avinash Rachmale received the 2009 Champion Award for Entrepreneurial Success from President Obama.

The firm’s involvement in the corruption case yielded negative publicity and cost the company city deals, Rachmale said.

“This is bringing a hardship to our company,” Rachmale said. “We have had a hard time the last few years.”

Construction energy kudos and White House visits suggest otherwise.

In May, Lakeshore was named one of the Top 100 contractors by an engineering group.

The report ranked firms based on construction revenues in 2011.

Defense lawyers were not sympathetic.

“You’re a multimillionaire, aren’t you?” Ferguson lawyer Gerald Evelyn asked.

Prosecutors objected to the question. Sustained, U.S. District Judge Nancy Edmunds said.

“Through the hardship you’ve experienced, your company has exploded in growth, hasn’t it?” Evelyn said.

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