AJC EXCLUSIVE: Kasim Reed’s attorneys say the former mayor is not under federal investigation

Personal attorneys for Kasim Reed say the former mayor has been cleared of wrongdoing in the Atlanta City Hall corruption investigation, and that federal prosecutors have told them he is not a target in the ongoing probe.

Attorneys Craig Gillen and Danny Griffin — who do not represent Reed’s campaign, which also came under federal scrutiny — say prosecutors at the U.S. Attorney’s Office in Atlanta arranged an August conference call with them to deliver the news.

“During that call, the federal prosecutors informed us that their inquiry regarding Kasim Reed was complete and that the inquiry regarding Mr. Reed is closed,” the attorneys wrote in a statement provided to The Atlanta Journal-Constitution. “There is no federal investigation of Kasim Reed.”

A spokesman for the U.S. Attorney’s Office declined to comment after being provided with the statement.

Caren Morrison, a law professor at Georgia State and former federal prosecutor, said that type of assurance coming from a U.S. Attorney’s Office is rare.

Morrison also said it is unlikely that two respected and long-time defense attorneys would be untruthful about such a conversation: “It would be a bridge-burning kind of thing to do — a severe blow to their reputations.”

“It’s highly unusual for a U.S. Attorney’s Office to take a position like that: `We are done and we’re not looking at this anymore,’” Morrison said. “It’s in the nature of the prosecutorial job that you usually leave avenues open, because you never know what kind of additional information you might get. Anything could happen.

“It’s pretty clear if Mr. Reed wasn’t running for mayor, this wouldn’t happen.”

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Reed is one of 14 candidates in the mayor’s race. A recent AJC poll found Reed and City Council President Felicia Moore in a statistical tie for the lead, with rest of the field lagging far behind.

Reed was mayor from 2010-18. His administration has been the subject of a years-long federal corruption investigation, which has netted bribery or fraud charges against five members of his team, including his chief financial officer, chief procurement officer and a deputy chief of staff. City contractors have also been charged.

The AJC reported in June that federal prosecutors had issued a subpoena to Reed’s former campaign attorney, Jeremy Berry, in an investigation of wire fraud involving the alleged use of campaign funds for personal purchases.

Those allegations include furniture delivered to his mother’s house, spending at Caribbean resorts, along with the purchase of lingerie and jewelry. All of those purchases allegedly occurred in 2017.

Reed has repeatedly said his campaign is not under investigation, and told the AJC Thursday that Berry was interviewed by federal authorities, who then closed the case without charges.

Reed campaign attorney Robert Highsmith said in a statement Thursday: “The inquiry into Kasim Reed’s ... mayoral campaign account spending has ended with the Government taking no action.”

A 25-page ruling handed down by the 11th U.S. Circuit Court of Appeals in Atlanta indicated Reed’s campaign spending was under investigation by a federal grand jury at the time.

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The ruling didn’t name Reed or Berry, but the AJC was able to determine their identities by matching a key detail in the appellate court’s decision to a line in a Reed campaign’s financial disclosure from 2017.

In an unanimous ruling upholding the legitimacy of the subpoena, the three-judge panel wrote that the campaign attorney had been interviewed by federal officials, who then issued a subpoena for his testimony before a grand jury.

The attorney allegedly told investigators that “he repeatedly saw expenditures from the campaign bank accounts that appeared to him to be obviously personal in nature, as opposed to being legitimate campaign expenditures,” the ruling says.

The lawyer also said “these were not isolated incidents,” according to the document.

The campaign fought the subpoena on the grounds that communication between the candidate and the attorney were protected under attorney-client privilege. But the judges wrote that attorney-client privilege does not protect statements between a client and his lawyer if those statements conceal or further a crime.

The campaign had the right to ask the full 12-member appeals court to reconsider the decision, or appeal to the U.S. Supreme Court, or have Berry comply with the subpoena and appear before the grand jury. It is unclear where the case currently stands because most of the records remain under seal.

“Where it stands is there is no federal investigation of my campaign,” Reed said Thursday. “Jeremy Berry was interviewed, and that was the conclusion of the process.”

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Scott Grubman, Berry’s attorney, declined to answer questions about whether his client ever testified to the grand jury, or if the case was dropped. He repeated Wednesday that Berry is not a target of the investigation.

“Mr. Berry was asked to provide information as a witness in the Kasim Reed investigation which ... I cannot comment on as I am not involved in,” Grubman wrote in a statement to the AJC.

Corruption isn’t a main issue in the mayor’s race, but it is an issue that seems to be impacting Reed’s candidacy. The AJC poll found 44% of respondents had an unfavorable view of Reed, compared to 34% who viewed him favorably. And 61% of respondents said the federal investigation made them less likely to vote for Reed, as opposed to 34% who said it has no effect.

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Reed and Moore got into a heated exchange over the issue of corruption during a recent debate, when Moore suggested his previous administration has left a cloud over City Hall and that his campaign is under investigation.

“I am not under investigation, so there’s no cloud over me because I’m not under investigation of any kind by anyone,” Reed said to Moore. “If you really believe I am, you should say Kasim Reed you are under investigation and you will be hearing from my counselor immediately.”

Moore didn’t back down.

“I said your campaign,” Moore replied. “I said Kasim Reed’s campaign is under investigation and Kasim Reed’s campaign has fought the attorney for the campaign from being able to talk to the grand jury. That’s why this issue has been delayed.”

Moore said Thursday that the current status of investigations into Reed are “immaterial.”

“The fact remains that his administration was rife with corruption, and several of his personal appointees have been jailed and are indicted,” Moore said. “Mr. Reed personally told me several times that nothing happened in City Hall that he didn’t know about.

“I believed him then. I still do.”

— Staff writers J.D. Capelouto and Wilborn P. Nobles III contributed to this story.

COMING SUNDAY: How does this revelation about Kasim Reed change the race for mayor?

COMING MONDAY: How the lesser-known mayoral candidates can break through with voters.

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