This week’s indictment against Detroit’s former mayor and others is likely to renew interest in changing the way the region’s massive water system is run. The federal government identified 13 scams in which water department contracts worth tens of millions of dollars were steered to a friend of former mayor Kwame Kilpatrick.
Detroit Mayor Dave Bing's office released this statement regarding the RICO indictments of former Detroit Mayor Kwame Kilpatrick, Victor Mercado, former director of the city Water and Sewerage Department, and 3 others:
We are disappointed by continued revelations of the mistakes of the past. Yet, we will not be deterred from our agenda. We will continue to work hard to restructure city government to a level of accountability, transparency and performance for our citizens. We have the utmost confidence in U.S Attorney Barbara McQuade and her team, and will cooperate and not interfere with their investigation.
While these indictments will make it more difficult as we seek a new director for the water department, and continue to make the tough but necessary decisions throughout the city, we will maintain our commitment to the highest ethical standards and those who uphold them for the benefit of our city and region.
Kwame Kilpatrick and the others associated in the case are facing charges under the federal RICO statute (Racketeer Influenced and Corrupt Organizations). You can check the FBI's glossary of terms to see what activities can be charged under RICO. The law was enacted by Congress 40 years ago to prosecute the leaders of organized crime. Before RICO it was difficult to prosecute organized crime leaders who rarely got involved in day-to-day dirty deeds.
Jim Schaefer of the Detroit Free Press has written up a nice little summary of RICO and how prosecutors have since used it to fight corruption in organized labor, drug gangs, and government officials. He writes:
Prosecutors must prove that there was a “criminal enterprise” at work; that the person being prosecuted conspired with others to commit a pattern of crimes, from violent acts to financial crimes such as bribery, money laundering, wire fraud or extortion.
Federal prosecutors will try to prove that Kilpatrick and those newly indicted today colluded in a pattern of crimes.
Here's some video of the release of the indictments from the Detroit News:
Update 4:28 p.m.:
Barbara McQuade, the U.S. Attorney in Detroit, had this to say of the new indictment:
“The indictment charges all of them with working together to abuse Kwame Kilpatrick’s public offices. Both his position as state representative, as well as his position of mayor of Detroit, to unjustly enrich themselves, through a pattern of extortion, bribery and fraud.”
Update 4:18 p.m.:
Here's an excerpt of the indictment (info in parens added):
"(Former Detroit Mayor) Kwame Kilpatrick, (Kilpatrick’s long-time friend) Bobby Ferguson, (Kilpatrick’s father) Bernard Kilpatrick, (former director of the Detroit Water and Sewerage Department) Victor Mercado and (Chief Administrative Officer then Chief Information Officer to Kilpatrick) Derrick Miller… extorted municipal contractors by coercing them to include Ferguson in public contracts, and/or by rigging the award of contracts to ensure Ferguson got a portion of the revenue from those contracts…. Ferguson got tens of millions of dollars in work and revenues from municipal contractors."
Update 3:39 p.m.:
Federal Prosecutors in Detroit are announcing more corruption charges against former Detroit Mayor Kwame Kilpatrick.
The indictments also include Kilpatrick’s father, Bernard Kilpatrick; former city contractor Bobby Ferguson; former Detroit Water Department head Victor Mercado; and former city official Derrick Miller.
Representatives from the FBI, IRS, U.S. Environmental Protection Agency, Department of Housing and Urban Development are also on hand for the announcement.
The new charges are a sign the years-long investigation into Detroit municipal corruption is approaching an apex.
Peter Henning is a Wayne State University law professor. He says this investigation has been typical of public corruption probes that slowly “work from the outside in.”
“The government’s committed a lot of resources. When that happens then it’s much more likely to see charges brought, simply because the government wants to see some return on its investment.”
Kwame Kilpatrick already faces federal tax evasion and other charges for allegedly using a non-profit civic fund as a personal slush fund.
Ferguson also already faces federal charges in an alleged city bid-rigging scheme.
The other shoe is finally dropping on former Detroit mayor Kwame Kilpatrick. The US Attorney in Detroit is holding a news conference at 4pm to announce indictments against Kilpatrick, his father Bernard, and others allegedly involved in city hall corruption in Detroit.
The U.S. Attorney's Office is considering prosecuting the mayor under the Racketeer Influenced and Corrupt Organizations statute, among other federal criminal laws, according to a source. The Department of Justice's Organized Crime and Racketeering Section reviews and approves each proposed federal prosecution under the RICO statute.
So far, 14 people have pleaded guilty to felonies and one person has pleaded guilty to a misdemeanor in connection with the Detroit investigation and a spinoff probe in the city of Southfield. Those convicted include former Detroit City Councilwoman Monica Conyers.
A suburban businessman has pleaded guilty to a felony as part of the federal government’s investigation into a bid-rigging scheme that involved a close friend of Detroit’s former mayor.
Brian Dodds is a subcontractor from Howell, west of Detroit. He told a federal judge he submitted an inflated bid for demolition work on a public housing project so that Bobby Ferguson’s company would appear to have the lowest bid.