As Kwame Kilpatrick heads to prison, prosecutors say: show Detroit the money

With former Detroit Mayor Kwame Kilpatrick heading to federal prison for a 28-year term, the prosecutors who helped send him there are demanding: Show Detroit the money.

The US Attorney’s Office in Detroit wants Mr. Kilpatrick and boyhood friend Bobby Ferguson to pay $9.6 million in restitution directly to the City of Detroit. That is the sum they say the two men gained in an elaborate scheme to strong-arm city contractors working for the Water and Sewerage Department into funneling an estimated $74 million in city contracts to shell companies operated by Mr. Ferguson.

The criminal enterprise also included Kilpatrick’s father, Bernard Kilpatrick, and ex-water department director Victor Mercado.

“It is beyond question that the City of Detroit and its citizens were the clear cut victims of the defendants’ crimes,” prosecutors said in court documents filed earlier this week.

US District Judge Nancy Edmunds sentenced Kwame Kilpatrick Thursday, saying he “used his power as mayor ... to steer an astounding amount of business” to his cohorts. Ferguson received a 21-year sentence Friday. In that hearing, Judge Edmunds called Ferguson “the catalyst at the center of an historic and unprecedented criminal scheme.”

Edmunds has not yet determined exactly how much Kilpatrick or Ferguson will have to pay, but a hearing to establish that figure will take place within the next 90 days. As part of the sentencing phase, Edmunds trimmed the government’s estimate of how much the city lost to conspiracy from $9.6 million to $4.6 million.

Yet there are complications in Detroit seeing even a dime. Kilpatrick claims he is penniless, and he is barred from earning a living while in prison. Also, he still owes more than $800,000 of a remaining $1 million restitution order stemming from a 2008 obstruction of justice conviction that sent him to jail for four months.

However, prosecutors might be able to seize assets that come into play down the road, such as an inheritance. And in court documents, prosecutors said they already seized more than $400,000 in collective hidden assets from both men, plus an additional $2.2 million from Ferguson. Ferguson also forfeited his Detroit home, a condominium, and 15 pieces of heavy construction equipment.

But the city will have to compete with others who were wronged by the criminal enterprise, and that process could also be complicated. As prosecutors said in court documents, “In this case is the inherent difficulty in determining the identities of all of the other victims of this complex racketeering scheme, as well as quantifying the restitution amount they are due.”

Walbridge, a Detroit construction company, is one of several contractors that say they were forced to pay Ferguson to secure city contracts. Walbridge says in a victim impact letter to the court that it deserves restitution money.

According to testimony during the trial for Kilpatrick and others earlier this year, Walbridge paid up to $5 million in extortion money. In one instance, according to The Detroit News, the company rejected an overture by Ferguson to provide him a 35 percent cut on a $140 million project, instead proposing a cut of 15 percent. Kilpatrick then intervened to provide pressure to complete the deal.

The company has not been charged with wrongdoing.

After Kilpatrick’s sentencing Thursday, US Attorney Barbara McQuade said all parties were “culpable because they participated in a pay-to-play culture,” but added that “some are victims because they lost business after they failed to play along.”

Ms. McQuade said she hopes that the Kilpatrick and Ferguson verdicts will ultimately make Detroit a friendlier place to do business. “I hope it sends an important message we’re cleaning up city government ... so businesses will want to come to do business here,” she says.