Live Blog: Kwame Kilpatrick Trial Day 30 - DC News FOX 5 DC WTTG

Live Blog: Kwame Kilpatrick Trial Day 30

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DETROIT (MyFox Detroit) -

And we're done for the day, the jury is filing out,  Jim Thomas is having a conversation with Bullotta and the Judge.  It sounds like the judge is directing the prosecution to turn over a missing document.  I'll have to ask M.L. ABout his when he comes out of the court room.  He will of course have a complete wrap up at 5 and 6 of Fox 2 News, and look for several new installments of his daily takeaway tonight on


Bullotta asking about appeal process, showing document outlining appeals process.  Harris read first paragraph.  Says within 14 days of denial request for discussion of denial may filed.  Basically they have two weeks to appeal.

Bullotta asks if DLZ was told they could appeal.  Harris says he didn't tell them.  Harris says he directed his computer department to take DLZ off the register.

And Bullotta says this would be a good place to stop.


Bullotta now hoeing letter from Phillips to Latimer, cc' d to MErcado.  Harris says he wrote the first draft and Phillips made some changes.

Harris reads letter: says DLZ is revoked pending further review... says investigation will be underway... says from this time on there would be no certification status.  Says contact office if there are any questions.  Phone number is Phillips desk.

Bullotta asks about dates.  REvokation retroactive to FEb. 2nd 2006.  Harris says Phillips came up with that date.  Harris says he doesn't know date was when DL sent in bid.


Harris says his boss was Gerard Grant Phillips and was appointed by the Mayor.  Says Phillips directed him to decertify DLZ.  Says he told PHilliips they couldn't.

SAys the guy who directed him to decertify DLZ was Gerard grant Phillips.  Harris says they couldn't do that because there was no change in the structure of the company and told Phillips the law department, as Bullotta put it, had already blessed it.

Says Philips told him the Mayor wants it to happen.

Harris says he also told Philips a bunch of other companies would also have to be decertified.

Bullotta asks if this caused him some concern.  Harris says he thought the contracting process was being tampered with.  Says bases on conversations with water department he figured DLz was in line to get a contract.

Harris says he drafted a letter for the director and the director decertified them.


Judge is asking Harris to slow down.  Tells Bullotta he has to start over.  Bullotta says good afternoon Mr. Harris, provoking laughter in court.  Judge says with the last question.

Harris says legal cleared DLZ.

Bullotta asks if he got advice from law department, backs up and asks how long certifications last.  2 years.

did he get advice on whether he could cancel a certification.  Harris says in previous conversations not related to DLZ, law department told them not to revoke a certification but to let the certification expire or they changed the definition.  Says it was prior to 2006.

Bullotta asks if Mercado called him about DLZ.  Harris says he got the call because the director of his department wasn't present.  Harris says he told MErcado DLZ was certified.  Says Latimer then called and asked if they were Certified Detroit Headquartered, says Latimer told him DLZ was in line for a big contract.


Harris says he investigated DLZ to see if they qualified for DHB.   SAys during the initial certification there were questions about headquarters in Columbus Ohio but legal department cleared them for certification.  Harris says Kathleen Leavey was the lawyer and she became the DWSD acting Director.

Harris says he conducted on site investigation in the city of Detroit.  Thomas is objecting and asking if he went himself.  Harris responds to rephrased question and says he reviewed work of staff analyst who went.

Judge is asking him to slow down.  He sounds nervous.

Bullotta asks if top officials worked out of the office and could provide the service from that location.  Harris says yes.

Bullotta asks if they restructured and created Detroit based subsidiary.  Harris says yes and he's aware that legal department cleared them.  Thomas is objecting and Bullotta asks for side bar, vehemently, because  he doesn't like toms arguing this objection in front of the jury.

This sidebar took 2 seconds.


Harris says he worked in purchasing and in Human rights as the chief compliance officer.  Harris says there was the construction work force program where 50% of the construction project workers had to be from Detroit.  SEcond part was DBB and DBH.  SAys fines could be imposed and payment could be withheld.

Harris says the minority executive order was struck down and replaced by the DBH and DBB Executive order.

SEcond part was DBB and DBH.  Says 30% of contracts were to go to DBB and DBh companies.

Says Detroit BAsed Business must have an office in city, pay taxes, and would get equalization credits.  SAys it's not a price reduction but you'd receive points.


Rataj showing a letter asking for negotiation approval.  RAtaj says it looks like this was when 2 engineers were trying to steer a contract to Rachmale's firm.  Latimer says correct.

Rataj says he has nothing further and Latimer is excused.

Mr. Kim Harris is being called to the witness stand now by Prosecutor Mike Bullotta.


Rataj shows Latimer the document.  Latimer says is reading it.  It's an email from Latimer to MErcado in FEb 2003.  Rataj asks if a number of individuals debated letting 1387.  Latimer says 1387 was already being done in house.

Latimer says the Director asked him about other contracts that could be cut.  Rataj 1361 and 1387, they were not Lakeshore's contracts.  Correct.

Rataj says we do no Lakeshore did protest after Kwame was no longer Mayor but not on 1361 and 1387.  Latimore says correct.


Sidebar is over, Jury is back and Mike Rataj is up.

Asks if he remembers how 1368 was aware by  council.  Latimer say yes.

Asks if I's dotted and T's crossed between water board award and City council signing off.  Yes.

Asks if Lakeshore never got to that point.  Correct.

Because the Director said it would save money.  Correct.

Rataj asks Chutkow if he wants to have a sidebar on this "because I'm going to show him the document.  Chutkow says yes and they all head up to the Judge's bench.


Court is back in session and Judge asks for another sidebar before the jury comes back.


We're back. Thomas gets one question started, the Judge sustains the objection, and tells Thomas we need to move it along.  Thomas says this is the last area he want to go into and the judge tells him to get to it.

Thomas asks Latimer is despite his objections, Mercado was had a basis for his decision.  Latimer says correct.

Thomas is done and we're taking a 5 minute break.


Judge says we need a sidebar on this.


Asks if he knew of a complaint about DLZ not being a DHB. Yes.

Asks if one allegation was the officers were not located in Detroit.  Yes.


Thomas asks he Latimer knows the president of DLZ was in Lansing.  No.

ASks if he know Vicrim Redshank. no.  asks if he knew they had offices in Ohio.  Yes.

Latimer says new knew that had other offices in Michigan outside Detroit.


Thomas asks if Mayor has any say over what council does.   No.

Thomas asks about  Latimer taking position on DLZ that it had issues about being DBB.  ASks if that was something Mercado or Kilpatrick told him to do.  No.

Latimer agrees he knew there was an issue before.  doesn't remember if he had conversations with legal about that.  Says he knew they identified other locations for company officers.

Thomas asks if Detroit Headquarter is different that Detroit BAsed.  Asks if you got advantage from Detroit headquarter and it wasn't true that would be a lie.  Latimer says if that's true.

Thomas asks if he knew the people, got letters from them.  ASks if DLZ ever lied to him.  No.


Thomas asking about text from Bobby to Kwame.  Latimer affirms it's okay to talk about water department stuff.  Asks if he has context for Kwame response of "cool."  No.

Thomas asks if he'd cancel a contract if work wasn't getting done, if lied on bid, etc.  Latimer says yes to all.

Thomas asks if Rachmale's ever called him.  Latimer can't remember.

Asks if RAchmale filed a lawsuit.  No.

Thomas says Latimer repeatedly said there was not contract.  Correct.


Thomas asks if the whole point of Judge Feikens overseeing the water department for costs to be reduced.  Yes.

Thomas asks about Mercado changing his mind.  Asks if Mercado was being decisive. Thomas says that was pretty decisive.  Latimer says in that respect yes.

ASks if Inland did the work promptly, efficiently, and on time.  Yes.

Thomas asks if Latimer knew that Lakeshore didn't have the same experience as Inland.  Yes.

Asks if there are times when 10 or 15 companies are bidding and all think they're the best.  Yes.

Thomas asks if losing is the cost of business.  Yes.

Thomas asks if it's the cost and efficiency of the project.  Correct.

Asks if Mercado had to go looking for money.  No.  Latimer affirms Mercado was an efficient manager.


Thomas asks if he denies there's a justification for doing that. Latimer says he can't say it saved money but there was a justification.


Thomas now showing contract 1361 letter from INland.  Thomas wants to talk about how it cost more to send this back to the department.  Asks if the employees were salaried and had to go to work everyday anyway.  Says it's trouble but not extra cost.  Latimer says right.

Thomas asks about increased cost as it relates to what happens out in the field. Latimer says they did have some additional costs.

Thomas says if you already have someone out in the field would they bill less time and money because they're familiar with project and don't have to transport gear.  Latimer says possible.

Thomas asks if Mercado was making an effort to save money.  Latimer says yes.


Chutkow asking about Human Rights Department pulling DLZ's DBB certification.  Chutkow asks if Superior had ability to do job.  Latimer says he didn't think they were low balling.  Latimer says this was borrowed money and would eventually be passed on to ratepayers.

Thomas is up now.  Joking about telling Latimer yesterday that he could see the light at the end  of the tunnel.

ASks if kwame ever told directed him to do anything about the contracts.  Latimer says he didn't.

Thomas asks if this all came down after his talk with the Mayor and Mercado.  Says yes.


Back to list of scoring for Standard, Average  Cost, and AVerage after DHB's.  Asks about DLZ handling super bowl related water work.  Latimer says they did a god job and came in at cost.

Latimer says he's an advocate for standard cost methods for these projects because wen you're talking about a lump sum cost it's the cleanest way to evaluate.

Latimer says it provides best value for money and also accommodates minority business initiatives.


Chutkow now showing a letter referring to contract 1387, Latimer reads Lakeshore is highest ranked bidder and they're ready to enter into negotiations.  This one is not signed.  Latimer says he doesn't know if it was ever sent to Lakeshore.  It's from April 8th of 2003.s

Chutkow asks if draft letters are written but not sent until after approvals are made.  Latimer says yes.

Chutkow showing Memo from April 17th, 2003.  To Mercado, says "I thought there was a hold on this."  Mercado wrote a note on is telling Latimer to see him.

This is a month after the Letter.

Chutkow asks if Mercado explained the reversal.  Mercado says he didn't think it was needed because other contractors were doing similar work and one of the engineers didn't think it was needed.

Chutkow now showing memo from Mercado saying he wouldn't authorize approval.  May 12th 2003. 

Back to agenda for Water board, Latimer say it shows that contract would be pulled.

Chutkow asks if Latimer testified that Mercado is a decisive person and seldom changes his mind.  Latimer says correct.


So Chutkow has just countered the defense arguments that Mercado was saving time and money by canceling Lakeshore's contract by rolling it into Inland's contract.  He got Latimer to say it basically didn't save any money and took at least as much time to negotiate the prices for the rollover.


Chutkow now showing bid for 1362 contract.  Asks if Latimer sees that Lakeshore was 100% minority owned and met 100% of DB and DBH.  Latimer says yes.

Asks if Inland was minority owned.  No.

Asks if prices were the same.  Yes.

Asked if this promoted minority businesses.  Answers not base of the cancellation of the contract and rolling it into the other.

Latimer now looking at a letter he sent to Mercado listing the top ranked firms for the contract.  Latimer says Lakeshores score was 3709 out of 4000.  ASks about Madison construction says next  was 1200 points less.

Chutkow now showing the tabulations from the department that shows Madison was partnered with Xcel which was affiliated with Ferguson.

Latimer says his letter recommended Lakeshore get the contract, the Director approved it. Mercado.

The evaluation team also signed off on it.


Chutkow on redirect, asking about the amendment to the contract  for the sinkhole.  Latimer says at the time the decision was made there wasn't an increase in cost but that was before adding in the $10 million.

Chutkow asks if rolling in the contracts saved the Department time.  Thomas objects, says it's not based on the evidence and Judge chastises him for testifying to what he thinks the Memo meant.  Chutkow rephrasing.  Latimer answers that initially it was considered a time save but it didn't turn out that way.

Latimer says he was uncomfortable writing an email about canceling the project because Mercado should have written the email since he was the one justifying its cancellation.

Chutkow asks if Latimer recalls that Lakeshore didn't get another contract until 2005.  Latimer says that sounds about right. 


"all rise"  We're back in session.


Chutkow says he has much more and this would be a good time for a break.  Judge agrees.  Jury is filing out.  Back in 20.


Chutkow asks if as interim director he was prevented from entering into a contract. No.

Could Mayor prevent him from entering into a contract. No.

Now looking at email from Rachmale to Mercado.  Asks if Rachmale ever told him they never got the meeting.  Thomas objects.  Chutkow rephrases... are you aware if that meeting ever occurred or not.  Latimer says he's not aware.

Chutkow asks about Mercado telling him canceling the contract would same money.  Chutkow showing defense exhibit from August 2004.  Chutkow asks if this was the amendment that rolled the contracts together and if Bobby was now on Inland's team.  Latimer says yes and it's the same price as Lakeshores.  Says if it's for the reap air work it came out of the operating budget, same budget that was allocated for Lakeshore.

Chutkow now asking if negotiating the amendment also takes time.  Yes. 

Latimer says they had all the signed documents to move forward with Lakeshore.


Latimer says Mercado told him changing the contract would save money.  SAys MErcado was not prone to changing course like this, was more conclusive and direct.

Chutkow asks if Ferguson became a contractor on Inland's 1368 contract.  Showing the sub contractor approval form.  Date is March 2003 and Ferguson would get %20.  Latimer says he doesn't think Ferguson was on the original bid.  Bobby got in a few weeks after the contract was awarded

Chutkow showing Bobby text to Kwame.  Chutkow makes point that it's from April, after award.  Latimer says he didn't know Bobby and Kwame were talking about the prices after the Water Commission approved it.

ASks if he knew if Mayor and Kwame were talking.  No.

Latimer says he doesn't see any reason they would be talking.


Latimer says if you separate the work like this more contractors with general experience can put in bids.  Chutkow asks if Latimer saw a need for this contract and told Mercado about the need.  Latimer says yes.

Latimer says if you don't separate the two the auditors will throw it all into the Capital budget and you run the risk of running out of money.  Accounting nightmare.

Chutkow asks if this was rolled into Inland's existing contract. Yes.

Latimer says you have separate out what was a repair and what was a replacement.

Latimer says he was concerned about what this would do to the resources of the department and what it would do to the bidding process if this happened often.

Chutkow asks if Latimer was the interim director at one time.  Latimer says he got the work but not the title.  Chuckles in the court room on this one.


Latimer says the bidding process is expensive for the companies making bids.

Chutkow now showing the date July 24, 2002, of the Lakeshore bid submission. 

Latimer say picking the team to evaluate bids is also an involved process.

Latimer says after the Director approves a project they have to go to the Water Board for approval.

ONce they get approval, Latimer says, they start negotiations.  Latimer reads from document: says negotiations were successful and they'd present it to the board.  Latimer says yes Mercado authorized it to go forward and that a contract with Lakeshore be entered into.

Latimer says they still have to do clearances with city departments.  Latimer says yes, Mercado has approved all the steps up to this month.  Latimer says there was a need for this contract.  Latimer says this contract was for emergencies like sewer collapses.

Chutkow asks if the "as needed" is separate from "Capital" projects so contractors don't have to stop work on Capital projects to deal with emergencies.  Latimer says yes.


Chutkow is now up and asking about the Inland invoices disallowed.  Asks if it was a large project.  Latimer says yes.  asks if it's common to see disallowance's.  Latimer says it's common.  Says it's usually resolved, there was no fraud that he was aware of, says usually it's a misunderstanding.  Says DWSD still works with Inland.

Chutkow now asking about how DWSD awards contracts and the Lakeshore bid.  He's showing the defense document from engineering to contracts and grants start the RFP process.  It asks for a separate contract for emergency repair work.  It's from Jan. 2001.

Chutkow switching now to a memo from Feb 2003 from Mercado requesting the Water Board approve a contract for Lakeshore.  Chutkow asks if 2 years is common.  Latimer says it's usually a 10 to 16 month process.

Chutkow asks if the price and scope is figured out before it's bid.  Latimer says yes, that an amount is set and then they have to verify that the money is available.


Rataj is now asking if under the Kilpatrick administration Ferguson lost a contract even though he had the lowest score.  Latimer says yes.  Rataj says these were 2 contracts that totaled $80 million.  Latimer says yes.

RAtaj now showing the contract proposal from Lakeshore for 2014.  Rataj is making the point that on the previously shown flow chart Ferguson's company is listed as what Latimer refers to as a partner but in the contract FEI is not listed.  RAtaj is done.  I have no clue what his last point was.  And  he left hanging that lost contract thing of Bobby's.  Maybe that's set up for a future witness.


Latimer is reading the document into the record.  To paraphrase, says they want to spread the work around and recommends Lakeshore get the contract.  (M.L. just whispered in my ear that yesterday it was cheaper to have one contractor do a job, now they're making a big deal about spreading the work around. 


Rataj is now showing another letter relating to an engineers estimate.  Latimer says this is from Inland trying to justify the requests for payment that DWSD disallowed.

RAtaj showing an invoice now.  Latimer says this is pretty much Latimer to Mercado and Fujita.  This is contract 2014, part of the East Side/West Side sewer project.

Rataj is asking if there are two contracts lower than Superior's bid. Asks if the proposed cost column is not the end of the story.  Latimer says correct, there's a negotiation that takes place.

Rataj says what he wants to establish is that the bid price is not the end of the story.  Asks if DBB and DBH are figured in and it's the score that's the determining factor.  Latimer says yes.


Another letter now from Ms. Dixon in DWSD grants department to Inland, sinkhole project again, and it's another disallowance.  Latimer says  the field engineers reviewed the invoice and noted that items were added that were previously disallowed. 

Rataj says they tried to sneak in amounts they weren't entitled to... prosecution objects...RAtaj rephrases says they were asking to money they were not entitled to... Latimer says yes.

Rataj is now showing several more similar examples.


Rataj is now showing him a letter from DWSD to Inland Waters Pollution Control regarding contract 1368.  Latimer says this relates to a particular task associated with the contract and contains a list of amounts,  so DWSD can audit.  Latimer says in this case DWSD disallowed payment.  Rataj asks if they were trying to get money they didn't earn.  Latimer says that's a fair statement.

Now he's showing another letter from Latimer to Inland. Also 1368, the sinkhole project. It deals with another overcharge and appears to be a notice of disallowance. Latimer says it's like the other invoice where they were using the mark ups improperly and they included an amount that was held in retainage.  Says they put in for receiving retainage but the milestones hadn't been met yet.


Latimer is taking the stand.  Judge Edmunds reminds him he's still under oath.  Mike Rataj asks if he remembers talking about amendments to contract 1368 and talking about the sinkhole.  Latimer says yes.

Rataj asks if he agrees if amendments 2,3, and 4, relate to the sinkhole.  Latimer says he's not sure on all of them but 3 and 4 definitely.

Rataj asks of work on the sinkhole continues even though not all the amendments had been approved.  Latimer says that sometimes happens.


Judge Edmunds is on the bench and the jury is filing in.


The conference is over and the attorneys are taking up their positions.  Mike Rataj is at the podium.


We're waiting for the conference in the Judge's chambers to conclude.  Kwame, Bobby, and Bernard are sitting together at the far end of the defense table quietly conferring.  Bobby is smiling and laughing softly as Kwame shares some story.  No sound, so I have no idea what they're talking about.  It's obvious though that they're relaxed, and they appear to have not a care in the world.


The attorneys are going into Judge Edmunds Chambers for a brief conference before the jury is brought in.   If yesterday's testimony sounded a little disjointed, that's because it was.   According to Ferguson's attorney Mike Rataj, through my friend and Colleague M.L. Elrick, the defense was only going to get one shot at questioning Water Department Deputy Director Darryl Latimer.  But his testimony will also play a role in the questioning of witnesses the prosecution will call in the future, Like Tony Soave.  That's why Soave's name came up even though Soave has yet to take the stand.

Latimer will be the first witness today.


Good morning from the Theodore Levin Federal Court House in partly cloudy downtown Detroit.  The sun made a brief appearance this morning as I was cruising down the Lodge.

Ken Martinek is Senior Producer-Investigations for Fox 2 News.  You can contact him at

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