Kilpatrick Corruption trial now focusing on Detroit Water and Sewerage Department bids

DETROIT (WXYZ) - The Kilpatrick Corruption case shifted into a whole new area Monday – it's a part of the case that's key to the government proving the racketeering charges against Detroit's former mayor.

Federal prosecutors are still in the "extortion" chapter – but now we're moving into the water department contracts.

Financially, those contracts are the biggest part of the RICO allegations – and on Monday the feds kicked off the testimony with someone who knows all the "ins" and "outs" of the third largest water system in the country.

Federal prosecutors say the members of the Kilpatrick Enterprise used the lucrative Detroit Water and Sewerage System to enrich themselves – and Monday they showed how former city contractor Bobby Ferguson got millions in water department deals, even when he wasn't the lowest bidder.

Former Detroit Mayor Kwame Kilpatrick, his father Bernard Kilpatrick, Ferguson, and ex-water department chief Victor Mercado are all on trial, facing federal racketeering and conspiracy charges.

DWSD construction contracts manager Daniel Edwards was the only witness called Monday. Edwards spent hours telling the jury about how the water department gets bids from contractors – and how projects in the aging system can cost far more than expected.

It's the first time the jury has heard much about Mercado – who's been trying to fly under the radar inside the federal courthouse.

Assistant U. S. Attorney Jennifer Blackwell showed the jury memos that Mercado wrote to Kilpatrick – asking for "special administrative orders" to rebuild water mains in downtown Detroit. The special orders allowed them to avoid oversight from the city council or the water board. And Ferguson got some of the contracts to work on the water mains.

Mercado's attorney John Minock still needs to finish cross-examining Edwards, but he's hinting that there's much more to the story.

"The key will be what the government chose to emphasize from these documents and this witness, and what we choose to emphasize," said Minock.

Edwards testified that for one contract, Ferguson's company was 45% higher than the lowest bidder, but still ended up with the job.

He also showed the jury that the change orders on one project alone increased Ferguson's price from more than $821,000 to more than $3.1 Million.

But Minock cautioned reporters to wait until those change orders are fully explained.

"I don't want to go into that now. It's going to be the subject of testimony tomorrow, and you'll be able to see it live," said Minock.

Edwards also testified that for one deal, his supervisor told him re-calculate all the bids in a way the department had never done before – that way Ferguson ended up in first place for a contract.

Dan Edwards will be back on the stand tomorrow for more cross examination. And a lot of big name Detroit contractors who are expected to start testifying soon.

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