‘Not surprising’: Mayoral candidates react to Kasim Reed allegedly misusing campaign funds

Former Atlanta Mayor Kasim Reed talks about running for his third term as mayor during an interview at Colony Square in Atlanta, Wednesday, June 16, 2021. (Alyssa Pointer / Alyssa.Pointer@ajc.com)

Credit: Alyssa Pointer/Alyssa.Pointer@ajc.com

Credit: Alyssa Pointer/Alyssa.Pointer@ajc.com

Former Atlanta Mayor Kasim Reed talks about running for his third term as mayor during an interview at Colony Square in Atlanta, Wednesday, June 16, 2021. (Alyssa Pointer / Alyssa.Pointer@ajc.com)

For the first weeks of Kasim Reed’s third mayoral candidacy, the former mayor said repeatedly that he has fully cooperated with the ongoing federal corruption investigation of Atlanta City Hall and that he has been cleared of any wrongdoing.

“What I have done is what I said I would do since it started: cooperate in every way,” Reed told The Atlanta Journal-Constitution last month. “And after three years of it, more than three years of it, of a review of every aspect of my life, the Trump administration’s justice department did not take an action against me.”

And yet, his opponents and some residents say they were not shocked at all to read an AJC story last week revealing that Reed is the target of a federal wire fraud investigation, and that his campaign is fighting a subpoena that would require the grand jury testimony of his campaign attorney.

“It’s not surprising,” said Atlanta City Council President Felicia Moore, one of Reed’s opponents in the mayor’s race. “This case emphasizes that his assertion that somehow he is not a part of any investigation is not true and that there is an active investigation.”

Reed allegedly used campaign funds to make personal purchases of jewelry, resort travel, lingerie and furniture for his mother, the AJC found after comparing details disclosed in a recent court ruling with Reed’s campaign disclosure reports.

The ruling shows prosecutors are trying to compel grand jury testimony from an attorney for a local politician’s campaign who helped produce the campaign’s financial disclosures. Attorney Scott Grubman confirmed last week that Jeremy Berry, a former Dentons attorney who worked on Reed’s campaign before taking the job as Atlanta’s city attorney in 2017, was questioned by federal authorities as a witness.

Councilman Andre Dickens, who is also running for mayor, said the wire fraud investigation illustrates “why we can’t go backwards today.”

Atlanta needs trustworthy, transparent leadership, Dickens said, and not “distractions from the real things that are going on in our city.”

“Who would give money to someone who constantly misused funds and abused his power? It should make it hard for people to want to support him with a vote or with money,” Dickens said.

It remains to be seen how the grand jury investigation could affect the Nov. 2 election.

A Reed campaign spokesperson said in a statement Thursday that Reed will focus his energy in the campaign “on the issues that matter: addressing violent crime and restoring our sense of community.”

Reed is running a campaign focused on reducing crime in the city. AJC file photo

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Reed is clearly the most recognizable candidate in the race, having served in the Georgia Legislature and two terms as Atlanta mayor from 2010-17. But the appellate court ruling highlights the challenge Reed may have in rebuilding trust and confidence with some voters.

Michael Koblentz, who lives in Loring Heights and supports Moore’s campaign, said the revelations in the AJC’s report “just sort of illustrated that it’s the same Kasim Reed.”

“These are extraordinary expenses that I don’t think are going to sit very well with the public,” said Koblentz, who also chairs the Northwest Community Alliance, a coalition of northwest Atlanta neighborhoods and developers focused on smart growth.

The federal investigation of City Hall has been ongoing for several years, and has ensnared several members of Reed’s team. There have been bribery convictions against his chief procurement officer and a deputy chief of staff. Reed’s chief financial officer is currently under indictment for fraud and weapons charges, and his former director of human services is facing a 12-count fraud indictment.

Reed has repeatedly told the AJC and Channel 2 Action News that authorities never accused him of corruption and he apologized for the ongoing federal investigation.

But Andra Gillespie, a political science professor at Emory University, said it’s unclear what impact the newly surfaced allegations could be a reminder to voters of all the negativity the investigation has brought to the city.

“It reminds voters that there have been allegations of corruption that have been tied to Kasim Reed,” Gillespie said. And while name recognition and fundraising may give the former mayor an early boost, “whether or not that’s sustainable remains to be seen,” she said.

Qri Montague, a southwest Atlanta resident, said she is currently undecided in the race. Montague, 24, said she admires much of the work Reed did as mayor, but the new report raises questions about his leadership style.

“I appreciate Kasim for what he did for the city, but right now the city is in a completely different mess,” she said.

Other contenders in the race include Councilman Antonio Brown and Dentons attorney Sharon Gay.

Gay said in a statement Friday that “the previous federal indictments speak louder than anything I can say.”

Brown, who is currently under indictment on federal fraud charges for allegedly lying about his income on applications to obtain loans and credit cards years before he ran for office, declined to comment on the investigation into Reed. Brown has repeatedly said he is innocent of the charges against him.

Michael Sterling, a former federal prosecutor in Chicago who served as Reed’s senior advisor in City Hall for over two years, said the allegations remind him of the case involving former Congressman Jesse L. Jackson Jr.

Jackson was convicted of spending $750,000 in campaign funds on personal items.

“It’s something that I think the former mayor is going to have to explain to constituents,” said Sterling, who also ran for mayor in 2017 and now works as an attorney in Atlanta.

Sterling said the impact of the allegations depends partly on how the other candidates treat them.

“I’ve represented clients who were under indictment who were reelected. I represented a mayor who was under indictment and re-elected mayor,” Sterling said. “So you never know how voters will react.”

The Atlanta Journal-Constitution published a story June 30 that showed former Atlanta Mayor Kasim Reed may be the subject of a federal grand jury investigation for alleged wire fraud.

Why this story is important

Reed has launched a historic campaign for a third term as mayor and has said in multiple interviews that he has been cleared in the years long federal corruption investigation of City Hall. The recent court ruling is evidence that the federal government is still scrutinizing him.

Seeking Reed’s side of the story

In preparing to publish the newspaper’s findings, AJC reporters reached out to Reed and his spokeswoman multiple times; requested an interview; and submitted written questions.

Reed’s campaign did not respond to those requests for comment. After the June 30 story published, the AJC continued to reach out to Reed’s campaign to get his side of the story.

On Thursday, a Reed spokeswoman broke the campaign’s silence with the following statement to the AJC, which read:

“Today our campaign raised more than $1 million in twenty days. Despite this extraordinary show of support from voters across our city, the AJC continues to repeatedly report false, inaccurate, incomplete and speculative information about Mayor Reed. It has become evident that the AJC is not interested in the truth, but rather committed to baseless “gotcha” reporting. In this campaign, Mayor Reed will focus on the issues that matter: addressing violent crime and restoring our sense of community,”

The AJC asked the Reed campaign to provide specifics about any inaccuracies in our published reporting and pledged to correct them. Reed’s campaign spokeswoman offered no specifics. Instead, she replied: “The statement speaks for itself.”

What next?

The AJC will continue reporting this story. The newspaper will also continue to reach out to Reed and his campaign to provide you with answers to the questions raised by the federal investigation.