Victor Mercado Pleads Guilty in Kilpatrick Corruption Trial

The former Director of the City of Detroit Water and Sewerage Department has pleaded guilty to a superseding information charging him with one count of conspiracy related to the ongoing public corruption trial of former Mayor Kwame Kilpatrick, his father Bernard Kilpatrick, and longtime friend Bobby Ferguson, announced United States Attorney Barbara L. McQuade.

United States Attorney Barbara L. McQuade was joined in this announcement by Robert D. Foley, III, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation; Special Agent in Charge Erick Martinez, Internal Revenue Service-Criminal Investigation Division; and Randall K. Ashe, Special Agent in Charge, Environmental Protection Agency, Criminal Enforcement (EPA-CE).

Entering the plea this morning before United States District Judge Nancy G.Edmunds was Victor Mercado, 61, of Stuart, Florida.

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 Mayor 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 Mayor 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.

According to the terms of the plea agreement, the sentence will not exceed 18 months, due to mitigating circumstances. In particular, Mercado took the actions set forth above because of duress, under circumstances not amounting to a complete defense.

The trial, which began on September 21, will resume on November 13, 2012, against Kwame Kilpatrick, Bobby Ferguson, and Bernard Kilpatrick.