US files new charges against ex-Detroit mayor, dad

DETROIT – Imprisoned ex-Detroit Mayor Kwame Kilpatrick was indicted Wednesday on new corruption charges, and his father, Bernard Kilpatrick, also was implicated in what a federal prosecutor called a "pattern of extortion, bribery and fraud" among some of the city's most prominent officials.

U.S. Attorney Barbara McQuade announced the 38-count indictment during a news conference. The indictment also lists longtime Kwame Kilpatrick associate Bobby Ferguson, ex-city water director Victor Mercado, and ex-mayoral aide and Kwame Kilpatrick's close friend Derrick Miller.

"This indictment alleges an audacious and far-reaching abuse of the public trust by a group of high-level city officials and their close associates," McQuade said.

Federal officials refer to the defendants under the racketeering conspiracy count in the 89-page indictment as the "Kilpatrick Enterprise, whose objective was "financially enriching Enterprise members, associates and their families. They did that, the indictment alleges, by using the power and authority of Kwame Kilpatrick's position" as a member of the Michigan House of Representatives and Detroit mayor "to commit extortion, bribery and fraud."

No arraignments have been scheduled.

Kilpatrick served in the state House from 1996 to 2001. He was elected mayor that year and re-elected four years later.

He resigned as mayor in 2008 after pleading guilty to obstruction of justice in state court. He's now in prison for violating probation in that case and is awaiting trial in federal court on tax and fraud charges related to how he spent money from a nonprofit fund.

"Obviously, these are very serious charges. We're going to take them very seriously," said Kwame Kilpatrick lawyer Jim Thomas. "We're going to fight this."

According to the new indictment, the then-mayor and the others used his office to extort contractors.

Bernard Kilpatrick and Miller helped hold up a $50 million sewer lining contract until the winning bidder agreed to bring Ferguson's business into the deal, the indictment said. It said Ferguson ended up receiving $24.7 million in business.

The indictment lists 13 alleged fraudulent schemes in the awarding of contracts in the city's Department of Water and Sewerage.

"At the heart of the scheme ... was corruption in municipal contracting," McQuade said.

The indictment grows out of a six-year investigation into corruption in Detroit, McQuade said. She and Detroit FBI chief Andrew Arena said the investigation continues to gather evidence.

"It's not going to be done until we say it's done," Arena said.

For years federal prosecutors have been investigating corruption in Detroit government. Among those already convicted are former City Council President Monica Conyers, her aide Sam Riddle Jr., Kilpatrick's deputy mayor Kandia Milton, and Milton's brother, DeDan Milton.

McQuade said she hoped the latest charges would help bring closure for city residents.

Kwame Kilpatrick also is accused of defrauding the state of Michigan and private donors to his civic fund by using the fund for personal expenses and other improper purposes.

Ferguson kicked back at least $424,000 in cash and valuables to the then-mayor, the indictment said. It said Kwame Kilpatrick used at least $590,000 to make deposits to his bank accounts, pay credit cards, buy cashier's checks, repay loans and buy clothes.

McQuade said Ferguson's revenues were in the "tens of millions of dollars" but that his contracts with the city are largely finished. If there are outstanding contracts, the city will have to decide whether to honor them, McQuade said.

The government also will seek a money judgment in terms of forfeiture. The amount would be determined by a jury, she said.

While his son was mayor, Bernard Kilpatrick deposited $600,000 in cash into personal bank accounts, the indictment said. He is charged with making false tax filings for 2004, 2005 and 2007.

"I haven't seen the indictment," said John Shea, Bernard Kilpatrick's attorney. "It's a disappointment to Bernard to hear this news, but he himself has said it's now out in the open, and now we can prepare to fight it. There's a sense we now can roll up our sleeves and get to work.

"The investigators think their job is done. It's not over. This is the beginning."

Mercado left his post as director of the city's Water and Sewerage Department in the summer of 2008. He now serves as general manager of the Bexar Metropolitan Water District in San Antonio, but the San Antonio Express-News reports the district board will meet Thursday night to consider his termination.

Mercado's lawyer Martin Crandall said that based on paperwork the government has collected in the case "none of it suggests that Victor was complicit, involved with or conspired or worked with anybody involved in public corruption in the City of Detroit."

"Victor is a very hardworking, dedicated public servant, and always has been. I'm confident that Mr. Mercado's name will be cleared of these charges he will be acquitted," Crandall said.

An aggressive defense is planned in the case, he said.

The Associated Press also left a message seeking comment from an attorney believed to be representing Bobby Ferguson. It was not clear who was representing Miller in the case.