Day 44: Kilpatrick "held up" major contracts until friend Ferguson was happy, witness says

DETROIT (WXYZ) -  

Follow along with day 44 of the Kwame Kilpatrick corruption trial as 7 Action News Investigator Ross Jones blogs all the news to come out of federal court:

12:56--The end: That's all for today, folks.  We're back in the morning.

12:50--Just rumors: Okay, he's got me now. Thomas is showing an e-mail that the prosecution showed earlier from an Insituform employee, saying he understood that Kilpatrick was holding up their contract because of a dispute with Ferguson.

Thomas asks whether or not this employee is acting on a rumor he heard, instead of something he knows as fact.

12:38--In the weeds: I'll be blunt with you, readers.  I'm not really sure where Jim Thomas is going here.  He started with questions about certifying Detroit-based companies, then veered off into the fact that Kwame Kilpatrick lost the 2005 mayoral primary by 11 points, and is now talking about how the contract approval process works.

Thomas is a much smarter man than I'll ever be, so perhaps he'll pull a rabbit out of his hat and this will all make sense soon. But right now, I'm not seeing any rabbits.  Heck, I'm not even seeing any hats. 

12:24--Falsely certified: Relying on Parker's knowledge as a former employee of the City of Detroit's Human Rights Department (which was in charge of making sure companies were Detroit-based), Thomas is asking him about the decertification process used when the City learns a company is illegitimately claiming to be based within the city.

12:21--Bid process: Thomas is asking Parker about the city's bidding process.

12:13--Defense up: Jim Thomas, a lawyer for Kilpatrick, is up now.  Thomas introduced himself to Parker, saying he hasn't met him before.

"We've met three or four times," Parker said, including when he ran into him at a bar "smoking a cigar after the Hutaree case."

Thomas represented the Hutaree in their lengthy battle with the government.  All charges were dropped, hence why Thomas was celebrating.

Thomas blamed his memory loss on drinks being served that night. That's good, because otherwise someone might ask if he has dementia.

12:07--Short break: Stay with us.

Sorry for the delay in blog posts.  I had to run outside to update our 7 Action News at Noon viewers with a quick live shot. 

11:40--Not enough: When the Lakeshore Engineering officials were confronted with news that Ferguson was unhappy, they cut him a check for $12,000.

Ferguson was furious.

"You scary (expletive), he owes me $80,000, not $12,000!" Ferguson allegedly told Parker.

11:37--More threats: When Lakeshore Engineering to pay Ferguson money he felt he was owed, Parker says he was told to tell company officials they wouldn't get "(expletive) else from the city or DWSD."

Ferguson said to tell the company that Ferguson was owed $80,000.

"I though it was illegal, I thought it was wrong," Parker said.

11:23--Delay the bid: Parker said Ferguson was trying to delay the major Oakwood project, trying to get a Walbridge employee to cut him in on the deal.

11:15--Moving forward: Now Parker is talking about another project (this is the third he's been asked to testify about). It's a $150 million project at the Oakwood pump station. Ferguson wanted 30-35% of the project, going to his company Xcel Construction.

At a meeting held at the posh Mosaic restaurant, Walbridge officials told Ferguson he needed to put up a performance bond for the project, a form of insurance, given the size of the work he wanted.

Parker says that Bobby Ferguson told Walbridge officials that Victor Mercado, the head of DWSD, would be calling to suggest the two partner up.  The contract had not yet been awarded. 

11:08--Ink to paper: A mini-crisis ensued over the letter, Parker said, and Walbridge officials feared that the letter could anger the Kilpatrick and Ferguson, and jeopardize future city work.

"Once you put ink to paper, it takes on a life of its own," Parker said.

So the letter's author was told to write a letter apologizing and saying he was mistaken when he wrote his first letter, Parker said.

"Bobby had influence," he said.

"He was the mayor's friend."

11:05--Ferguson furious: A Walbridge employee wrote a letter in 2003, after it received the contract, upset over the performance of Ferguson's work.  He wrote a letter to Bobby Ferguson.

"Walbridge Aldinger was strongly persuaded by highly placed city officials to award a substantial portion of the excavation work to Ferguson Enterprises," said the letter.

When Ferguson received the letter, he called Parker in a rage.

"He was hollering and screaming, you (expletive) are crazy," Parker recalled.

He said that Ferguson was concerned that the letter could get out to the media.

10:54--Walbridge makes a deal: Ultimately, Walbridge Aldinger decided they would hire Ferguson if they got the job.

"Why?" asked Asst. U.S. Attorney Mark Chutkow.

"They were afraid they wouldn't get the job," Parker said.

Ultimately, Walbridge took the unusual step of writing a proposal, saying how much Ferguson would be paid if they were selected as the contractor.

Ferguson was set to receive $12,730,000 in work. 

10:27--Short break: Stay with us.

10:20--Upset: Walbridge officials were apparently upset when Parker relayed the message. 

10:15--Back up: Let's go back for a second. Apparently, those equalized prices didn't come out initially.  Walsh Construction was initially the #1 bidder, so Walbridge Aldinger put together a formal protest and argued that they should receive more consideration because they're in Detroit, and Walsh was in Chicago. Parker arranged a meeting with Derrick Miller, Kilpatrick's close aide, and made his case.  He said Miller had a question for him.

"Is Bobby in on the deal?" Parker says he asked.

Parker responded that he was not.

"Why?" Miller asked.

"He's not qualified to do it," Parker says he responded.

Miller urged him to find a place for the mayor's friend, allegedly telling Parker: "See if you can put him in on the deal, BP."

Parker (BP) said he believed Miller wanted Ferguson to be hired as a subcontractor.

10:10--Bids opened: Walsh Construction was the lowest bidder, but after a process was done to take into account where the companies are located, Walbridge Aldinger was deemed the lowest bidder (after starting out as the third lowest).  The "equalized" bid price takes into account a company's geographic location and, Parker said, can lower the cost of the bid if a company is in Detroit.

10:06--Bid opening: Six bids were submitted for this job, valued at about $75 million, and it's standard for them to be opened and read out loud at the same time.  The bids are supposed to be a secret to everyone else except the company submitting it; that's done so that the other competitors can't lower their bids at the last minute.

9:54--Previous job: Now we're going a little further back in time to 2002, when Parker was director of business development for Walbridge Aldinger.  He's talking about a project to rebuild sewers in a part of Detroit called Baby Creek.  A $10 million allowance was put in place for the job.

9:54--Contract signed: The amendment was ultimately approved in December of 2005 after Insituform and Ferguson came to an agreement on prices.

9:50--No progress: A meeting between Parker and Ferguson at Ferguson's offices didn't go anywhere, Parker says.  He says that Ferguson wanted an increase in prices.

"He felt like I was siding against him and the boss," Parker said.

"He thought I was taking the side of the white folks," he said.

Parker said "the boss" was Kilpatrick.  Other nicknames he said Ferguson had for the mayor: "Black" and "Black Man."

Parker said he was concerned that a lot Detroiters would lose their jobs if this amendment was continually held-up.  Many of them, he points out, were African-American.

9:48--Another e-mail: The feds are doing their best to build a paper trail from the time that this contract was allegedly being held-up.  We're now being shown an e-mail (that the defense didn't want to be introduced) from an Insituform employee to others about the status of the amendment.

"Final ratification of the additional funds requires the mayor's signature," he wrote. 

Although approved by city's water and sewer board, "the mayor has refused to sign it because there has not been a resolution between Inland Waters and FEI," he wrote.

9:42--E-mail from Parker: We've seen this e-mail before, but it's just been re-introduced.  In it, Parker is writing to his bosses at Insituform, saying that he spoke with the mayor and that the "Amendment is held up until FEI is satisfied."

9:38--Kilpatrick's response: Parker said he caught up with Kwame Kilpatrick to ask about the seemingly held-up amendment. 

"He said, 'I need to talk to Bobby about it,' " Parker recalls.

9:32--Hold up: When a sinkhole collapsed in 2005, amendments were added to the Inland Waters sewer contract.  The amendments added money to the contract, but after many months, Parker says it seemed like it was being held up. This led to a meeting where Ferguson and Parker were both present.  Remember, Parker worked for Insituform at the time, and they were involved on this contract.

Parker said Ferguson "wanted more money on the amendment."

"He said the amendment wouldn't move," Parker added.

Another person in the meeting said to parker: "This is extortion."

9:24--No work from Bobby: Bobby Ferguson leased some of his employees to Insituform for its work on the project, but apparently was paid for work his company never did. 

"Was Ferguson Enterprises being paid for no work?" asked Asst. U.S. Attorney Mark Chutkow.

"Yes," Parker said.

Defense lawyers objected to the question, and the objection was abstained (meaning the jury should disregard both the question and the answer).  But you fine folks reading here at WXYZ.com are all-too-informed.

9:21--Insituform: At issue now is Parker's time at Insituform, a subcontractor of Tony Soave's company Inland Waters, which was chosen to do a $50 million sewer repair job in the city. 

9:17--Lots of jobs: He also spent time helping to run a failed-campaign for mayor, had two stints with the major construction firm Walbridge Aldinger, Insituform,  Xcel Construction and Ferguson Enterprises (the last two are Bobby Ferguson companies).  

He worked for Ferguson from September 2007 to August 2009.

9:06--Next witness: The next witness is Bernard Parker, the son of a Wayne County Commissioner. He's president of BP3 & Associates, a strategic business development firm based in Detroit.

He formerly worked in the City of Detroit's Human Rights Department, which certified whether or not companies were considered Detroit-based and therefore could receive extra points in the bid process.

8:55--New gig: While I was out, I did put together a story related to a possible witness in this trial.  The mayor's old friend Kandia Milton hasn't testified, but his name's come up several times.  He was once Kilpatrick's friend and chief of staff, but he went to prison for taking a $20,000 bribe to push through the sale of city property.  He got out last November, and was just hired by Congressman Gary Peters

8:45--Welcome back: Remember me? Sorry for my absence the last two days; I was doing some reports on school safety in wake of the tragedy in Newtown, Connecticut.

Have a question or comment for Ross?  E-mail him at rjones@wxyz.com.  You can also follow him on Twitter @RossJones7 or like him on Facebook.

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