DETROIT – The federal government has recommended that former Detroit Mayor Kwame Kilpatrick's restitution order be reduced by nearly $3 million.
Officials have recommended that Kilpatrick's restitution order be reduced from $4,584,423 to $1,637,087.
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At his original sentencing, Kilpatrick was ordered to pay the Detroit Water and Sewerage Department over $4.5 million based on what he gained in an alleged fraud scheme that included kickbacks for Kilpatrick. During a federal appeal in August 2015, it was ordered that Kilpatrick's restitution to DWSD be recalculated.
"The Sixth Circuit held that the restitution calculation was erroneous and should have been based more specifically on DWSD's loss, rather than on Kilpatrick's gain," a court document said. "The consensus among our sister circuits compels us to conclude that a district court may not use the defendant’s gain to approximate the victim’s loss unless the government establishes such a correlation that the defendant’s gain can act as a measure of -- not substitute for -- the victim’s loss."
Since the former restitution order of $4.5 million can't be linked to the actual loss to DWSD in the case, the government recommended that the amount be recalculated.
The court document said a construction management contract for water main replacements in Detroit ordered that the top two bidders would receive the contract. A team of DLZ and Superior Engineering should have been one of the top two bidders, but the bid was thwarted when an official working under the director of the Human Rights Department decertified DLZ.
The worker, Kim Harris, testified that Gerard Grand Phillips, the director of the Human Rights Department, explained to her that Kilpatrick had given the order for decertification.
Dan Edwards and Darryl Latimer testified that the decertification dropped DLZ/Superior from winning a bid spot and outlined the impact of losing its human rights certification. Ferguson/Lakeshore moved up into the second spot and obtained the contract.
A memorandum from the Board of Water Commissioners showed the cost difference between Ferguson/Lakeshore and DLZ/Superior as being $1,637,087.50.
"Unlike for several other contracts, the evidence permits the court to calculate DWSD's loss with sufficient precision to order restitution on it," the court document said. "Given the Sixth Circuit's requirement on remand that restitution be based on actual loss proved by the government, the court should reduce Kwame Kilpatrick's restitution to DWSD to $1,637,087."
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