Live Blog: Kwame Kilpatrick Trial Day 36 - My29 WFTC Minneapolis-St. Paul

Live Blog: Kwame Kilpatrick Trial Day 36

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DETROIT (MyFox Detroit) -

VAn Duesen now asking if Dennis Oszust was getting pressure from his bosses to find out where the contract was.  McCann says no he wasn't, they were just making inquires, they were curious why it was taking so long, says it wasn't the bosses who were worried about it taking so long, that the people at Inland were concerned. 

Van Duesen asks if curiosity and fact are two different things.  McCann says yes, Curiosity and fact are indeed two different things. 

Strong finish here by Van Duesen.  Another week under our belts, M.L. will have the wrap up on Fox 2 News at 5 and 6, and his take way from today should be a good one.  Have a great weekend and I'll be back on Monday.

12:52

van Duesen shows signature page of contract. McCann says she hasn't seen the  contract but she'll believe it's what Van Duesen says it is.

Van D asks if she sees there's now signature line for the Mayor.  McCann says it depends on if you're talking about written signatures and approval.

Court reporter is going to read back her answer.  CAn't hear her.

Van Duesen says Ms McCann, see if you agree with me the contract has to go through the budget office.  McCAnn says it sounds reasonable.  Law Department, sound reasonable.  McCAnn has said she isn't familiar with the process so it would be hard for her to agree or disagree.

VAn Duesen says she has no personal knowledge about her conclusion only what Soave told her.  Yes.

VAn Duesen asks who are the individuals in Inland that knew.  McCann says is Dennis Oszust who told her or Soave that the contract was being held up.  McCann says they didn't need to be told it was being held up, that was obvious.  They concluded it was in the Mayor's office.

VAn Duesen asks if it could be held up in the law office or purchasing.  McCann says they checked all those places and it wasn't held up there so they decided to check with the Mayor's office.

12:44

Van Duesen asks if McCann asks if she reviewed the files were turned over to Beeckman.  McCann says she reviewed the files with her own attorney.  McCann says she advised her attorneys of some changes that should be made, but says that those don't change the meaning of the documents.  they're talking about the report made by the agent during the interview of a witness.

Van Duesen asks if Dennis Oszust of Inland furnished documents in 2002 to  DWSD and is showing her a document asks if this is the one Dennis signed and it's possible it's in her record.

VAn Duesen is summarizing for the jury that this refers to the bond,  Yes.  Asks if the approval process is in place.  McCann says this is outside the scope of her understanding but she sees it was filed on this date.

Asks if she knows Inland filed an invoice.  McCann says it would be unusual for Oszust to tell her about filing an individual invoice.

12:37

Van Duesen asks if her memory then was better than today and did she rely on her notes.  McCann says she tried to remember to the best of her ability and to be honest.

Van Duesen asks her to read a document and is her memory refreshed that she told Agent Beeckman that the mayor had to approve the contract.  Chutkow objects, Van Duesen asks for a sidebar.

So we all know that the Mayor didn't put his signature on these contracts and wasn't part of the formal approval process, that it's up the DWSD, the WAter Board, and the Council, and so the defense is using this to show that the Mayor could not have held up the contract. 

12:29

Van Duesen asks if she just dropped in and out to solve problems.  McCann says that would not be a fair characterization, there was a lot more to it.

Van D asks about update from Dennis Oszust at Inland.  McCann says she got most of her updates from him.  Van D asks if the day to day information on progress and Ferguson would come from Erick and Oszust and Inland.  McCann says yes.

Van D says in Fall 2001 the contract was bid, low bid, high score.  Current .

ASks put together added up to $50 million. Yes.

VAn Duesen asks if she provided a large number of documents to Agent Beeckman.  She says she did supply a number of documents related to that contract.  This was 1368 again, the sewer lining contract.

Van Duesen puts up a Dec 19 2001 document and asks if what this shows us is that Kathy Leavey is reporting that the water board has authorized her to enter into a contract with Inland.  McCann says it's early in the prowess she's not familiar with every step.

Asks about start work date.  McCann says contingent upon city council approval.  Van D asks if she knew that actual stating work was on council approval.  McCann says yes.

Van Duesen says so when you told us earlier that it was only when inland put FErguson on the contract the Mayor approved the contract.  PRosecution objects and says that's not what she said, Judge sustains and tells Van D to rephrase.

12:19

McCann is chatting with the bailiff in the court room, He's smiling as she asks him questions and Nodding his head.  Now I know personally this guy is not easy to charm because he rousted me from the lobby this morning where I was setting up my computer and eating a bagel.  But she seems to have worked wonders on the guy.

Susan Van Duesen is on cross now.  ASks McCann if she began working for Soave 2 years ago.  McCann says 23.  She going over her background again, the same stuff Chutkow asked her when she started her testimony.

ASks if she eventually rose to become part of his executive team and oversaw industrial services group that included Inland.  McCann says Correct.

asks he to describe her role.  McCann says the individuals at the top worked together to support the various businesses.

asks if she worked for United Road Services now.  McCann says she started as President and is now CEO.  VAn Duesen congratulates her on her success.  McCann says she's been very fortunate. 

12 :14

and we're on break for 5 minutes.

12:00

McCann says near the election Bobby asked  for a meeting, says he came to deliver a message that he was dissatisfied with the relationship and wouldn't proceed until changes were made.  Says he thought he was disrespected and didn't get enough credit for getting work for Inland, says he was insulted at being asked to sign a note when he got an advance, says there were a number of things, essentially there were things to fix and your people know what they are and you should find out.

Says she felt like there was  sword dangling over the head of Inland and that Bobby thought he had power over Inland getting any further work.

SAys they tried to find more work that Bobby could do, even asked victor Mercado to help, but she says Mercado just told her don't worry about it, just do the work.  McCann says when they told Bobby what Mercado said Bobby replied "you act like Victor Mercado has made a single decision there ever."

11:54

BAck to the sinkhole now.  McCAnn says Ferguson wanted 20%.  SAys the pricing on emergency work is different.  SAys Bobby was disappointed about how much money he got out of this job but that was all they could do for the value he brought to that type of work.

I missed a great quote earlier where she said it was like breathing the air of veiled threats, I'll have to ask M.L. if he caught it.  McCann is eloquent and I'm not really doing her justice here.

Chutkow now showing a memo  she wrote about outstanding issues Bobby had about the sinkhole project.  She's asking what were the outstanding issues.  Says she found out later it was about how much money he'd earn on that job.

Next Memo talks about info from Bernard parker at Insituform that says sinkhole payment, or related work, was help up until FEI is satisfied.

11:48

McCann says they didn't want the company to be tainted by working with Bobby, don't pay no-show payments, make him work for everything he gets paid.

McCann says this situation rose above the usual level and she took good notes.  Says Soave met with the Mayor again and told her that Ferguson was still the sub contractor.

She says she's aware that Bernard Parker at Insituform and Paul Jorgensen told her about conversations with the mayor about Ferguson.  Says they told her that the mayor said Bobby was the guy.

11:44

McCann says eventually they did enter a contract with Ferguson.

Chutkow asks if she had to take any kind of action based on Ferguson's work performance.  McCann says they had to take action on a number of times.  At one point there was a stop work order saying don't give him any more work until he fixed work he'd already done.  says there were billing problems as well, like invoices that were too high.

Chutkow now showing that stop work order.  This is to Dennis Oszust VP Inland, says be advise that spot sewer repair work... be stopped.. until the issues of restoration for the attached job work is...   I think it says "Fixed." but Chutkow whipped it off the screen too fast for me.   This is from a DWSD inspector.

McCann says Bobby said he was unfairly blamed and being made a scapegoat.  Says Ferguson took credit for Inland getting the contract even though he wasn't on the bid.  McCann says he thought he wasn't getting the credit he deserved that he chose to do the work with them but could have done it with anyone else.

She also says Bobby claimed Inland was only on the sinkhole project because of him.

She says Inland employees were told to document there conversations with Bobby, that they felt at some day they'd be asked to "tell this story" and to take good notes.  (prescient, eh?)

11:34

Chutkow asks if they talked to Ferguson about actually working for the money.  McCann says they wondered how serious Bobby was about doing work on the contract because it took so long to reach an agreement.  SAys the had a very large concern that they wouldn't meet the minority percentage of the contract obligation to the city.

McCann says most of the work on the contract with Ferguson was done by the Inland folks and she'd come in occasional to turn up the heat to get them to the finish line.

She says the reached a labor lease with  Insituform so Bobby could provide crews to Insituform and also materials.

MCann says there was an expressed desire to do work but no desire to share assumption of risk, like come up with insurance, says it was very difficult.

Chutkow asks if someone shares in profits they should as lo share in risk.  MCCann says yes.  Says Bobby did not have experience with sewer lining, that they did offer to mentor him to get him that experience, but he wasn't interested.

11:27

McCann says at the Mackinaw Conference she ran into Mayoral staffers, like Derrick Miller, who at one point asked her how the negotiations were going with Bobby.  McCann says that made her uncomfortable, she didn't think it appropriate for someone from the Mayors administration to ask about negotiations with a subcontractor.

McCann says the results of the contract had been published and because there was change in the participants she was nervous that other contractors would have a reason to protest and force the city to re bid the contract.

McCann says she took notes about the conference after that meeting.  She says she called Soave and Levin about her concerns.

McCann says were the contract re bid they'd have been at a distinct advantage because competitors would know what they were charging. 

McCann says her concern was that because the contract wasn't dozen a member of the cabinet asking about negotiations meant they had to reach an agreement with Bobby before the contract would be let.

SAys the Mayor told her Bobby was a good guy.  She says they were working on it, and he said he knew that and said he knew they could work it out.

They're talking about how to give Bobby $10,000,000 worth of work on this contract.

11:19

The defense has argued that Charlie Williams was a front Company and Bobby's company could actually do the work, but it appears to me that the only quibbling here is whose pockets the money was going to line on this sewer lining contract.

Chutkow is back and asks about Mackinaw Island Policy Conference.  McCann says he met with Bobby at the 2002 conference to talk about work he'd do on that conference and the dollar amounts.

Asks if they came to a rough understanding about the work he'd do.  McCann says they identified a percentage of the dig-up work and would figure out how to meet the remaining target.

Chutkow now showing a new document, this is a memo from Dennis Oszust the VP at Inland to DWSD from Dec. 4th, 2001.  IT shows a list of the contractors and subs.  Inland is on it, Insituform, and Williams.  Williams was the minority contractor and was going to get 20% of the contract.   It also lists a bunch of companies that did excavating.  McCann says he isn't sure what work they were supposed to do, the folks at Inland could answer that.

11:11

McCann says it took a long time to get to the finish line with Bobby on what work he'd do and how the 20% minority target on the contract was going to be met.

McCann says he was difficult.  She says the focus on the 3% was a little non-sensual to her, she may have been a little slow on the uptake. 

This is a smart, sharp, precise woman.  Blonde, conservatively dressed but stylish, a young looking 50's-ish business woman.

Chutkow asks if Bobby was being difficult why not tell him they'd find someone else.  She says it was a forced marriage, that Mr. Ferguson had been chosen by the Mayor as the sub-contractor.

Sidebar.

11:06

McCann says the essential message was Williams was out and Ferguson was in.  SAys she didn't know Ferguson at that time.  SAys she doesn't remember doing a deep investigation but the folks at Inland knew him.

Chutkow asks her to describe Williams reaction.  She says he was very disappointed.  Says she had a meeting with FErguson, says Soave told her and Yale Levin another Soave VP to go meet with Bobby at his office.

McCAnn says it was an initial introduction, they swapped business experience and history.  She says Bobby clearly had a company and had done contracts and had contracting expertise.  She says she doesn't recall if he said anything about what work he'd do but he did tell them how much profit he expected.

McCann says the focus on profit was unusual because most contractors focus on the revenue he was going to make and take profit out of that.  Says he wanted 3% or $1.5 million.

11:00

Chutkow is asking Kathleen McCann when she started to be concerned about contract 1368 being held up.  She says Spring of 2002.   She says to her knowledge no other contracts had been held up like this, says her understanding was the Mayor was holding up the contract.

Chutkow asks what Soave told her after his meeting with the Mayor.  Susan Van Duesen, Bobby's attorney, objects, and they go into a sidebar.

10:56

"all rise" court is back in session.

10:55

10:33

McCann says she thinks Soave Enterprises.  owned the other 48% and the Judge calls for a 20 minute break. 

10:32

Chutkow asking if Inland had sewer lining experience.  McCann says the major part of the contract was given to Insituform.  They bought a small sewer lining company so they could start doing that themselves.  SAys they wanted to evolve the company and the expectation was that Williams would  build his company and that over time they'd establish a company that could do it all.  SAys they never got that opportunity.

SAys after the contract got stuck, Mr. Soave met with the Mayor and was told to hire Ferguson.

McCAnn says Williams was going to establish his business in Detroit.  Says the opportunity was significant, Williams lead the largest water department in the company, had a great resume, and that to have a company in that space with a good reputation would have had the ability to do work  for water departments all across the country.

She says Williams was disappointed, the paid him to ease the hurt, but did business with him in the future.  SAys Soave invested in MPS Group.  Says GM asked them to invest and help mentor MPS. MPS was an industrial services (cleaning) company.  She ways Williams is owner and CEO.

10:26

McCann says they had a contract that was running out and would have had to lay off employees without getting the new contract, 1368.

McCann says the employees at Inland were making regular inquiries about the contract and reporting back to her.

She says clearly Charlie Williams didn't have a big company doing this work but there was a tremendous opportunity to teach him about the game from the other side of the ball.  They were excited about building what could have been a large national company.

10:22

Kathleen is on the stand now, says he served on the board of directors, was responsibility a number of different Soave Enterprises portfolios, beer distribution, auto group, and industrial.

Says she worked for Soave for 21 years.  Worked for a top CPA firm before that.

Mark Chutkow now asking about contact 1368, the sewer contract for Inland Waters. She says Inland had it's own president for day today operations, but she interacted with him from the corporate prospective.

McCann says 1368 was a sewer lining contract.  Says she's not typically involved with putting together bids.  Says she would have known the bid was going in, says Dennis Obst was Sr. VP and would have put bid together.

McaCAnn says InsituForm would have been the main Subcontractors, CJ Williams, and a number of other contractors.

McCann says once the bids were opened they further receive notice from DWSD and that after the approval it became stuck.

10:15

Gurewitz up again, asks if everybody think the mayor is the boss.  Soave says yes.

ASks if he knows council has a role in making decisions. asks if there's a place for the mayor to sign (he's showing the contract signature page again.)

Gurewitz says you thought he was the guy who could shake it up if it has to be.  Sauce says yes.

Gurewitz asks, just to be clear it may have been the case he didn't have any control over the purchasing department.  Soave says maybe he did, maybe he didn't have control over anything, all I know is he was the boss.

Judge excuses him, says he's done.  Thanks Him.  Soave says thank you, nods tot the attorneys and says and thank you folks.  Judge says your done and he asks are you sure.  Judge laughs and says yes.  And Mr. Soave exits the court room after more than two full days of great court room testimony.

10"06

Rataj asks if it was normal in various cities where he does business that the leaders had certain favorite contractors.  Soave says yes.

Rataj asks if the mayor ever told him he wouldn't get the contract if he didn't use Ferguson.  Soave says I answered that yesterday, I've answered that for the last two days.

Rataj asking if Williams didn't have any experience or the ability to put boots on the ground.  Soave says I disagree, he ran DWSD, I don't know how you can says he didn't have any experience.

Rataj says is he right or wrong.  Soave says you can phrase it any way you want, Williams had experience at DWSD and they were going to help him with the parts  he did' have.

Rataj asks if Williams didn't have the capabilities Ferguson had,  Bobby had the real experience to do the work.  Soave says he doesn't know if he did lining work before.

Rataj asks several times if he's right or wrong about that.  Soave says no he didn't have people.

10:00

Rataj up now, says he wouldn't ask him anymore questions if Bullotta hadn't gotten up and asked more questions.  Soave chuckles and says he didn't have any control over Bullotta.

Rataj asks if he testified if it was purchasing or the Mayor that was holding up the contract.  Soave says if that's what he answered then yes.

Rataj showing Memo again. This is the one where the Inland layer is saying the contract was held up. Rataj asks if he sees where it says the water department approved it.  asks if he know if the law department had signed off on it at that time.  Soave says he wouldn't know that.

Rataj asks if  when the lawyer said the law department signed off on it that was wrong information.  Soave says you'd  have to ask her, he doesn't know.

Rataj asks if he doesn't remember the exact word that were used when he met with Kwame to find out why the contract was held up.  asks if he ever asked Kwame directly if he was holding up the contract and if you are why.  Soave says he never used those words, no.

9:53

Bullotta asks if any other  mayor ever held up a contract, does he recall?  No I do not.

soave says he was very concerned about the job, it was a $50 million dollar job, did have anything that big going at the time.

Bullotta asks if he was concerned about his employees.  Very  much so.

asks if he was asked if Charlie Williams was a minatory front.  Soave says that's absolutely not true.

Asks if when doing a mentoring relationship does that person already have an established business.  Soave says sometimes they do and  sometimes they don't.  Soave says Williams had managerial  experience.  Soave says he thought he had a lot on the ball.  Says Williams is his partner right now in charge of MPS.  Soave says they have over a hundred people, it's a nice company.

Bullotta ask if at some point he asked the Mayor if Ferguson was still his guy?  Soave says the mayor said  yes, he's still my guy.  Soave says if he wasn't the would have probably would have lessoned his workload and if there were still problems they probably wouldn't work with him.

9:46

Gurewitz asks if it was more than just friendship.  Soave says he wanted to keep the Mayor happy, Kwame was a likable guy, but he was the Mayor and he wanted to keep the Mayor happy.

Gurewitz asks if Kwame like him.  Soave says  I think so, you'll have to ask him.

And Bullotta takes over on redirect.  Says I think this will be over soon.  Soave says I home so. But not with his usual good humor.

Bullotta asking about the memo  from his in-house attorney.  Soave reads the conclusion, it says they need to know the conclusions and get them to send the contracts to the city council.

Bullotta  asks if the information  he was getting at the time was that the contract was stopped.  Asks where he thinks it was stopped.  Soave says he doesn't know exactly but his in house council probably knew he was going to see the mayor at that time.

Bullotta asks if he asked the mayor what the hold up was.  Did he say he didn't know what the hold up was.  Soave says he asked the  mayor, the mayor said he  had the wrong sub, he asked who he should get, mayor said Ferguson.

Soave says he assumed it was in his hand because he's the Mayor, he's the boss.

9:39

Gurewitz asking about a 1099 for the plane use.  Soave says his  financial people thought it was the best way to handle it, they handled it.  Gurewitz asks if handling it this way would mean the company could get a deduction, would it be a political contribution.  Soave says they did think it could be viewed as a political contribution, says they got an outside opinion and handled it.

Gurewitz says the opinion they got back was that it would not be treated as a political contribution.  Soave says they got the opinion and handled it accordingly.

Gurewitz is now asking if Soave knows that at some point they stopped keeping track of the names of the people on the flights.  Soave says he didn't know then. but he found out later and knows now.

Gurewitz asks if he went shopping in New York more than once, did he discuss it with Kwame, and invite him.  Soave says he did it often and certainly invited others and could have invited Kwame.

Gurewitz asks about the basketball tickets.  Soave says he didn't know they were going to be that expensive.  Says he doesn't remember exactly how it went.  Says it was a big game, doesn't even know who was playing.

Gurewitz asks if he considered Kwame a friend.  Soave says he liked Mayor Kilpatrick.  Gurewitz asks if it was friendship was the reason he did these things.  Soave says it was a dual purpose, Kwame had a lot to say about the things Soave was doing in Detroit.

 

9:30

Gurewitz asking Soave about his properties in Florida.  Soave says he owns a home there.  Bullotta objects says we've gone over this.  Gurewitz says he appreciates Mr. Bullotta's inpatients but this is leading up to his next question.  He's so calm and placid, quite a difference from Rataj and Thomas.

Gurewitz asking about a flight to Naples.  Soave says he doesn't remember specifics but he does remember inviting him.

Gurewitz asks  if  Kwame was working on water front development in Detroit.  Soave says he  thinks Kwame was looking for a place for himself but did go down to look at example of water front development in Detroit.

Soave says it was dual purpose, Detroit needed waterfront housing  downtown and Kwame thought some like the ones in Naples would work downtown.

9:24

Gurewitz show another flight request from July 2004.  This one is from Detroit to Long Island/Hampton.  At the bottom of the page had a note that says Mayor was gong to the Democratic convention.  Soave says he must have agreed to it but doesn't have a specific memory.  Gurewitz asks if he remembers that Kwame was on the Democratic National Committee at that time. (reminds you just how promising his future seemed at that time and how far he's fallen)

Gurewitz says passengers were Dedan Milton, Kwame, and Sargent DeWayne.  Soave says those are his initials and agrees he thought it was proper.

Showing a flight from Detroit To Cleveland now.  ASks if he knows Dan Gilbert.  Soave says he owns Quicken loans and the Cleveland Cavaliers.

Gurewitz asks if they talked about moving Quicken workers back to Detroit.  Soave says he thinks they went to a game too.

Gurewitz asks he if new kwame was going to talk to Gilbert about the move, if this had a impact on the eventual move.  Soave says he wouldn't know if that happened because he wasn't on the trip.

Soave says he was happy to help.

Gurewitz says you were happy to provide planes to  help the city carry out civic purposes.  Soave says yes.

9:16

Gurewitz now showing a document, it's a request for a company plane. Asks if Soave is familiar with it.  Soave says he doesn't usually see these things.  I guess when you run a multi billion dollar company you have people to fill out the paperwork.  Gurewitz asks if this was a flight with Kwame.  Soave says yes. He's asking about flights after the black out now, like the Mackinaw Conference.  Soave says he doesn't know why he  used to go but he knows why he doesn't go now.  Gurewitz bites.  soave says there's too many politicians there now.

soave says yes he took  Brooks Patterson there.  Says when he was going he'd ask people if they'd like to go.

Gurewitz asks if other people from his company would go as well. 

9:11

Gurewitz looking at a specific flight, asks if he knows if this was so Kwame  could testify in D.C. about the black out.  Soave says the airport is 35 or 40 minutes from D.C.

Now looking at Soave web site page for Brambleton, a high end condo complex in Virginia.  Soave says it's a community of homes and a town center.  Gurewitz says it's describe as being 32 miles from D.C. asks if he flew there with Derrick Miller to show him about the development possibilities in Detroit.  Soave says yes.

9:07

"all rise" Court is in session.  Judge Nancy Edmunds has taken the bench.  Everyone is standing as the jury comes in.  Judge Edmunds says be seated.  Harold Gurewitz dives right in with his first question but the Judge interrupts and reminds Tony Soave he is still under oath.  Soave says "thank you."

Gurewitz asks about the airplanes and if Mr. Rickman of MPS would have access to the planes.  Soave says he thinks there would be an inter company charge.  Gurewitz asks if Rickman asked Kwame to fly with him once.  Soave says he doesn't recall that happening.

Gurewitz now showing the list of flights introduced by Bullotta.  Soave agrees  he doesn't have personal knowledge of each flight.  Gurewitz says you don't  know personally which flights used for personal reasons.  Soave says yes.

9:01

The feed from the court room is up, the defense attorney's are standing at the table sorting documents.  Kwame and Bobby are in their seats, talking to Bernard who is standing behind them.  Bullotta and Chutkow are seated at the prosecution's table.  Agents Sauer and Beeckman are standing to the side.

7:50

Good morning (way too early) from the Theodore Levin Federal Court House in downtown Detroit. 

Ken Martinek is Senior Producer-Investigations for Fox 2 News.  You can contact him at ken.martinek@foxtv.com

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