Detroit – Former Director of the Detroit Water and Sewerage Department (DWSD), Victor Mercado, 62, of Stuart, Florida, was sentenced to eight months in a halfway house on May 22, 2014, following a guilty plea related to a sprawling corruption case involving ex-Detroit Mayor Kwame Kilpatrick. The sentencing highlights a concerted effort by federal authorities to dismantle a network of illicit activity that permeated city contracts and undermined public trust.
According to court documents and statements from the U.S. Attorney’s Office, Eastern District of Michigan, Mercado conspired with Kilpatrick and contractor Bobby Ferguson to illegally steer over $2 billion in DWSD contracts to Ferguson’s businesses between 2002 and 2008. Mercado, reporting directly to Kilpatrick, abused his position to manipulate the procurement process, favoring Ferguson despite established rules and regulations. He reportedly pressured bidders to include Ferguson on contracts as a condition for receiving favorable consideration, effectively rigging the system to benefit a select few at the expense of fair competition.
The investigation, a collaborative effort between the FBI, IRS Criminal Investigation, and the Environmental Protection Agency’s Criminal Investigation Division (EPA-CID), revealed a pattern of systemic corruption. Kilpatrick, while both Mayor and Special Administrator over the DWSD (a position stemming from a federal consent decree addressing environmental violations), allegedly strong-armed contractors into awarding subcontracts or payments to Ferguson, threatening contract delays or cancellations for non-compliance. This abuse of power resulted in significant economic harm to the city and compromised the integrity of vital public services.
EPA’s Concerns
Randall K. Ashe, Special Agent in Charge of EPA-CID, emphasized the particularly egregious nature of Mercado’s actions. “Illegally influencing the bidding process for managing wastewater and sewage can significantly endanger public health and safety,” Ashe stated. The EPA’s involvement underscores the potential environmental consequences of such corruption, as compromised contracts could lead to inadequate maintenance and operation of critical infrastructure.
U.S. Attorney Barbara L. McQuade stressed that while Mercado acted under pressure from Kilpatrick, he remained accountable for his actions. “Although Mr. Mercado was acting under pressure from the mayor, he must be held accountable for abusing his position of trust and causing harm to the city,” she said. The sentencing serves as a warning to other public officials who might be tempted to compromise their integrity for personal or political gain.
Legal Ramifications
Mercado pleaded guilty to conspiracy to violate Title 18 U.S. Criminal Code, specifically 18 U.S.C. §371, which addresses conspiracy to defraud the United States. This charge carries a maximum penalty of five years in prison and a $250,000 fine. While Mercado received a lighter sentence of eight months in a halfway house, the case demonstrates the federal government’s commitment to prosecuting public corruption, particularly when it impacts essential services and environmental protection. The investigation into the broader Kilpatrick scandal continues to yield convictions and shed light on a dark chapter in Detroit’s history.
Key Facts:
- Defendant: Victor Mercado
- Location: Detroit, Michigan
- Year of Sentence: 2014
- Crime: Conspiracy to defraud the United States (18 U.S.C. §371)
- Victim: The City of Detroit and its residents
- Co-conspirators: Kwame Kilpatrick, Bobby Ferguson
- Amount Involved: Over $2 billion in DWSD contracts
- Penalty: Eight months in a halfway house
Source: EPA ECHO Enforcement Case Database
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