Day 30: Contracts were killed to save money, not out of cronyism, says defense

DETROIT (WXYZ) - Earlier today, 7 Action News Investigator Ross Jones ( blogged all the details to come out of day 30 of the Kwame Kilpatrick corruption trial.  Follow along below:

12:50--The end...for now: We'll be back tomorrow.  Thanks for joining us.  Back tomorrow at 9AM!

12:44--Emergency: Now the jury is being shown an executive order signed by Kwame Kilpatrick authorizing that water chief Victor Mercado be allowed to enter into an emergency contract with Inland Waters to help fix a major sinkhole in Detroit.  It basically gave Mercado free reign to get the mess fixed.

We've heard a lot about Inland Waters, but so far not from anyone associated with the company. That will change soon, when the company's owner Tony Soave takes the stand in the coming weeks. Stay tuned.

12:30--Long process:  Rataj spent a lot of time going through the step-by-step process that takes place between the time a company is awarded a contract, to the time they formally can begin work. His point: there are a lot of hoops to jump through, and it's not uncommon for deals to be nixed somewhere along the way.

12:10--Already started: Turns out that Inland Waters already started to perform work and bill the city month before their contract was officially signed and approved in June, 2002.  Why this was done isn't clear. 

11:40--Before Kilpatrick: That contract that absorbed the work of one of the Lakeshore contracts that was killed at the last minute?  Rataj says it was awarded before Kwame Kilpatrick was mayor. 

11:20--Cross-exam continuing: Latimer is still being questioned by Rataj, but so far no big developments. 

10:59--Note from Victor: The jury is being shown a handwritten note from Water Department Chief Victor Mercado to Latimer, where he questions the necessity of one of the contracts that was supposed to go to Lakeshore, but was pulled.

"Please see me.  I thought we already have similar contracts," he wrote.

10:47--Still got it: We mentioned earlier that many in the courtroom, including Kwame Kilpatrick, seem to be battling symptoms of a cold.  Well Kilpatrick, after using a tissue, balled it up and shot it fade-away style into a garbage can a few feet away.  He got nothing but, well, can...and nodded his head as it went in.

Yeah, he's still got game.

10:30--Break time: Time for the morning break.  So far today, I think it's fair to say the defense has put up...well, a nice defense.  Essentially, it appears there was some legitimate concern from at least some water department employees as to the need for the two contracts that Lakeshore had canceled.

Remember, Lakeshore's management said they were fearful that those contracts were pulled because they refused to do business with Bobby Ferguson.  After that, they said, they started to include him on projects, and that's when the alleged extortion began. 

But if defense lawyers can convince a jury that maybe these contracts were pulled for legitimate reasons, perhaps they can argue that Lakeshore was simply paranoid here.  Explaining Ferguson's alleged threats to "shut down your jobs," however, might be a different story.

Stay with us.

10:24--Lakeshore concerns: There appears to have been some controversy back when these contracts were awarded about whether Lakeshore Engineering should have been ranked as highly as it was.  Specifically, it received high marks for "Work Completed Timely and at Cost," but its work with the city usually was neither, wrote one city employee. 

There was also a suspicion that Lakeshore had a friend on the scoring committee who helped give the company perfect marks.

10:13--No need: So far, defense lawyers have just been addressing a $10 million contract that Lakeshore Engineering had killed at the last minute.  Now, they're looking at the $5 million contract that was nixed, too.  We're being shown a letter from a water department employee who says he "was not a proponent" of the contract and "did not see much use" for it. 

So the point here is that at least some water department employees saw a need to kill one of Lakeshore's contracts.

10:07--No threats: Latimer acknowledges that he was never threatened by Bobby Ferguson about contracts or receiving work.

10:00--Too cozy: Rataj is asking Latimer whether some water department engineers were too cozy with contractors when Mercado first got to the department.  He agreed that they were, and that Mercado worked to clean up that culture.

9:55--Hold on: I hope your socks are firmly on your feet. Otherwise, Bobby Ferguson's lawyer Mike Rataj might blow them off.  He's up for cross-examination now, and he's known for some of the more memorable back-and-forths with the witnesses, as well as a reliably short temper. 

9:51--Didn't get both: The contract in question--CM 2014--ended up going to Lakeshore Engineering, even though they were the second best bidder after the tabulation process.  Ferguson's bid was actually #1, but because it was receiving work on a sister contract, Mercado said he didn't want the same company doing both jobs.  He gave Lakeshore one job, and Ferguson's team another.

A defense point: if the process was so rigged to favor the mayors' pal, why didn't Ferguson get both jobs?

9:42--Questionable contractor: Now Thomas is asking Latimer about another company, EBI, that bid for another job that Ferguson was competing for.  EBI submitted a much lower bid than Ferguson and others, but they also had some baggage: after one of its better executives left, Thomas says the company ran into some turmoil and was sued.  That suit was ongoing during this bid process. 

Another contractor, DLZ, was thrown out because it was apparently not a Detroit-based business.  This was discussed yesterday, but bears repeating.

9:37--Saving money: When Lakeshore's contract was pulled and the work was given to Inland Waters (already performing similar work), Thomas says that Inland agreed to make concessions to their contract, and lowered their "unit pricing" on the contract.  Latimer agrees that that saved the city money. 

9:33--Complicated process: Showing a chart on a projection screen to jurors, Thomas is going through the long, complicated chain of events that takes place after a contract is awarded.  It's not as simple as awarding a contracting and beginning work; there's still a chain of command that the contracts need to go through, and they can still be nixed during that process. 

Latimer agrees that that's allowable.

9:24--Smart manager: Thomas has spent several minutes praising the old Water Department Chief Victor Mercado, talking about awards the department won while he was in charge and talking about his effectiveness. 

Why is he doing this?  Remember that yesterday, Latimer said he was instructed by Mercado to recommend killing a contract that went to one bidder, and instead say that the work should be added to another contract that'd already been awarded to Inland Waters.  Inland Waters would later hire Ferguson Enterprises.  Latimer said he didn't agree it was the best way to go.  Thomas is trying to argue that Mercado made the best call for the department, and that Latimer was essentially wrong.

9:15--Contract procedures: Under cross-examination by Kilpatrick's lawyer Jim Thomas, Latimer is being asked about contract procedures, the cost of submitting bids and water department management.  So far, no fireworks.

9:00--Happy anniversary: It's day 30 of the Kwame Kilpatrick corruption trial and, once again, I forgot to buy a gift.  Still on the stand is Darryl Latimer, a City of Detroit water department manager. 

Yesterday, he testified that he was instructed to recommend that a contract awarded to Lakeshore Engineering--who had previously shot down Bobby Ferguson's request to work together--be killed in favor of another contractor who would later hire Ferguson.  Latimer said he didn't think it was necessary to cancel the contract, but did anyway.

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