Former DWSD Director Testifies Before Grand Jury, Denies Being a Target of Federal Investigation

Former DWSD Director, Victor Mercado, was back in Detroit earlier this week reportedly to testify before a federal grand jury that is investigating corruption during the Kilpatrick Administration. Mr. Mercado denies being a target of the federal investigation. 

Mr. Mercado was Director of the Detroit Water and Sewerage Department between June, 2002 and July, 2008.  He currently serves as General Manager for the Bexar Metropolitan Water District in San Antonio, Texas.

Update: Despite his denials, it turns out that Victor Mercado was in fact a target of federal investigators. On December 15, 2010, Mr. Mercado, age 58,  was indicted along with disgraced, former-Mayor Kwame Kilpatrick, his father, Bernard Kilpatrick, and Contractor Bobby Ferguson, on four charges, including racketeering conspiracy, and obstruction of justice. U. S. Attorney Barbara McQuade acknowledged that there was no evidence that Mr. Mercado received any money other than his salary. Mr. Mercado was fired by the BexarMet Water District Board on December 16, 2010. He is appealing the Board's decision.

DWSD Proposes to Overhaul Operations at WWTP to Address Permit Violations

In response to Violation Notices issued by the State of Michigan DNRE on November 12, 2009 and again on April 14, 2010,  the Detroit Water and Sewerage Department has submitted a 28 page Corrective Action Plan (CAP). 

The CAP outlines DWSD's plan to bring its waste water treatment plant (WWTP) back into compliance with the City's NPDES discharge permit. The permit violations, discharging high concentrations of sludge (TSS),  are primarily the result of the City's inability to dewater and dispose of sufficient quantities of biosolids (sludge). 

Earlier reports have identified multiple causes of this problem, including equipment failures, inadequate preventive maintenance, lack of spare parts, and limitations on off-site disposal. The Synagro contract, canceled  in January, 2009 under the cloud of scandal, was designed to alleviate some of these problems.

DWSD Contractor Bobby Ferguson Facing Federal Charges

Bobby Ferguson (Ferguson Enterprises, Inc.), a major contractor on DWSD projects over the past decade, and three associates were named yesterday in an 8 count federal indictment that includes conspiracy to defraud the United States, mail fraud and money laundering. The indictment centers around a project with the Detroit Building Authority, Garden View Estates, and does not focus on any particular DWSD project. 

The Detroit News reports that since 2002, Ferguson Enterprises, Inc. was awarded about $170 million in contracts by the City of Detroit, and that about $109 million of that amount (64%) represented contracts awarded by DWSD.

The federal indictment unsealed yesterday does not come as a surprise.  To anyone.

In January, 2009, the FBI served a search warrant on Ferguson Enterprises, Inc., and Xcel Construction, a company reported to be connected with Ferguson.  Two months later, we reported (here) that the Detroit City Council had rejected a $2.2 million contract award to Ferguson on small DWSD project.