New Details Emerge on DWSD Efforts to Recover Kick-Backs and Illegal Profits

New details have emerged about DWSD's nvestigation into contractors linked to the corruption probe and federal indictments of disgraced former Mayor Kwame Kilpatrick, former Director Victor Mercado and contractor Bobby Ferguson (Ferguson Enterprises, Inc. and Xcel Construction Services).  

As we reported last month (here), the Board of Water Commissioners on May 25, 2011 approved a $250,000 contract  to retain the Miller Canfield law firm to investigate both contracts and contractors identified in the 38-count federal indictment handed down last December.  

When this agreement went to City Council for approval earlier this week, head of the City of Detroit Law Department, Krystal Crittendon reportedly told Council Members that Miller Canfield would be paid $250,000 to research possible claims, but that any lawsuits to recover kick-backs or illegal profits would be handled on a contingency fee basis.

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Update (9/28): Acting Director Chris Brown indicated at today's Water Board Meeting, in response to a question from Chairperson Mary Blackmon, that Miller Canfield will be submitting their report to the Board by the October 26, 2011 Board Meeting.  

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.