Detroit ex-water boss Victor Mercado pleads guilty to corruption

Published On: Nov 05 2012 08:35:16 AM EST   Updated On: Nov 05 2012 12:33:07 PM EST

The former head of Detroit's water department has pleaded guilty, six weeks into a corruption trial that also involves ex-Mayor Kwame Kilpatrick.


The former head of Detroit's water department has pleaded guilty, six weeks into a corruption trial that also involves ex-Mayor Kwame Kilpatrick.

Victor Mercado's surprise guilty plea to conspiracy occurred Monday.

Mercado was accused of conspiring to rig contracts that benefited Kilpatrick and the former mayor's pal, Bobby Ferguson, whose construction company got millions of dollars of work from the water department.

Prosecutor Mark Chutkow says Mercado never took a bribe or kickback but caved to pressure from Kilpatrick.

Watch: Local 4 Experts talk about Mercardo's plea

The trial, which started Sept. 21, has been dominated by testimony about payoffs and fraud involving Kilpatrick and Ferguson as far back as 2000.
Kilpatrick's father, Bernard, is also a defendant. Kilpatrick resigned as Detroit mayor in 2008 before he was sent to jail in another scandal.

The trial is in recess until next week while Ferguson attorney Gerald Evelyn recovers from an illness.

About Mercado:

According to the superseding information filed this morning, from June 2002 to June 2008, Mercado served as Director of the Detroit Water & Sewerage Department (DWSD). In this capacity, Mercado was responsible for administering over $2 billion in contracts with private companies and reported directly to the Mayor of Detroit, Kwame M. Kilpatrick. From January 2002 to January 2006, Kilpatrick served as Special Administrator over the DWSD. That designation, arising from a federal consent decree resolving a lawsuit alleging federal environmental violations, gave Kilpatrick authority to award DWSD contracts directly with outside parties, bypassing city procurement procedures, and also gave Kilpatrick responsibility over the operation of DWSD's wastewater treatment plant to ensure compliance with environmental standards.

As stated in the plea documents, Kilpatrick used his position as mayor of Detroit and Special Administrator of DWSD to pressure city contractors-who submitted proposals to or were awarded contracts by DWSD-to give subcontracts or payments obtained under those contracts to Bobby W. Ferguson, or risk having the contracts delayed, awarded to competitors, or canceled, resulting in economic harm. Invoking and otherwise exploiting his well-known affiliation with former Kilpatrick, Ferguson pressured city contractors to hire or pay him for DWSD contracts.

As the plea documents further stated, Mercado-at the direction of Kilpatrick and his associates-took steps to help Ferguson receive a large portion of contracts, subcontracts or payments for DWSD business. These steps included influencing the procurement process to Ferguson's advantage, as well as directing a bidder to include Ferguson on a DWSD contract in order to receive favorable consideration on the bid.

Mercado took these steps as a result of regular and consistent pressure from former Kilpatrick and his staff to help Ferguson obtain DWSD business regardless of procurement policies, rules and regulations. Mercado tried to avoid this pressure, but from time to time he influenced the process to Ferguson's benefit in order to pacify and placate the former mayor.


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