December 17, 2010 at 1:00 am

Competing with Ferguson impossible, contractor says

Indictment identifies firm told to pay $5M to ex-mayor's friend

One contractor says of the indicted Bobby Ferguson: If I bid $10, he would come in and bid $5 and ended up getting $20. (Clarence Tabb Jr. / The Detroit News)

Detroit — Minority contractor Billy Hayes says Bobby Ferguson made it impossible to get a fair shake with the Detroit Water and Sewerage Department.

"If I bid $10, he would come in and bid $5 and ended up getting $20," said Hayes, the owner of Hayes Excavating Co. in Detroit.

"How could you compete with something like that?"

In announcing indictments of Ferguson, former Mayor Kwame Kilpatrick and others on Wednesday, U.S. Attorney Barbara McQuade said Ferguson was steered tens of millions of dollars in work "to the detriment of other minority contractors."

Federal agents accuse Kilpatrick of receiving at least $424,000 in kickbacks from work he granted his longtime friend, Ferguson.

Hayes started his company in 1967, installing water pipes with one truck. He went out of business in 2007 in part because he claimed the city failed to pay him $1 million for work he did for the water department.

He said Kilpatrick and Ferguson "got what they needed."

Another company, Walbridge, is identified in the indictment as being instructed to pay more than $5 million to Ferguson-affiliated companies.

The indictment claims Ferguson instructed the contractor to give one of his companies, Ferguson Enterprises, $2.7 million for work on a sewer overflow facility and $2.4 million of construction work for one of his affiliates, Xcel Construction Services, at the Patton Park recreation facility.

"Ferguson obtained this work by exploiting Company W's (Walbridge's) fear that Ferguson would use his relationship with Kwame Kilpatrick and other members of the Mayor's Office to adversely impact (Walbridge's) chances of winning the contract," the indictment states.

Richard Zuckerman, Walbridge's attorney, said the company that does large-scale projects was a victim.

"Walbridge was part of the investigation," he said.

"Walbridge was approached quite some time ago and was advised by the government that it had significant information that Walbridge had been extorted, meaning they were victims.

"(Walbridge) was asked to provide documents and testimony to assist the government," Zuckerman said. "Walbridge was never under investigation. They were always approached as the victim."

Zuckerman said he could not provide any further details into the investigation other than what was in the 89-page indictment materials released by federal officials Wednesday when the indictments were announced.

Zuckerman said Walbridge officials "would hope to continue to do business with the city" in the future.

"If the city has contracts that fit their expertise, I'm sure they would bid," Zuckerman said. "I'm sure they have great faith in the current administration."

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