Development authority per diem scandal enters Atlanta city council race

Sam Bacote was already facing scrutiny, as treasurer of the Fulton County development authority that has been rocked by a scandal in which he and other members received tens of thousands of dollars in questionable per diem payments.

Now the Atlanta City Council candidate is the target of additional ethics concerns, after attempting to award $25,000 in development authority grants to two nonprofits located in the same district he wants to represent as councilman.

The latest controversy is happening just ahead of the Aug. 20 qualifying deadline for the November elections.

Last November, the Development Authority of Fulton County approved a $225,000 fund in which each of its nine board members could propose grants of up to $25,000 for “one or two” local organizations.

During a May 25 board meeting, Bacote became the first — and so far, only — member to take that newly-created opportunity, proposing his funds go to the Cabbagetown Neighborhood Improvement Association and the Reynoldstown Civic Improvement League.

As an at-large member of the board, Bacote could have directed the grants to any nonprofit in Atlanta. But he chose to send both to groups in District 5, after he had announced his candidacy just a few weeks earlier.

“Whether or not I was running for council, I would have thought of that area first … it’s what I see, it’s what I feel,” said Bacote, who lives in Glenwood Park. “And, I mean, who doesn’t look out for their own?

“If I didn’t, I felt like I would have been criticized: ‘Wait a minute, we had a shot at something, and you didn’t tell us about it?’”

Ethics experts say the board member grants are the same type of non-competitive, sole source contracts that former attorney general Michael Bowers once described as illegal and unethical as part of a 2015 corruption investigation that declared Dekalb County government “rotten to the core.”

While Bacote can argue politicians have a responsibility to serve their constituents, ethics expert Edward Queen says the appearance of a conflict of interest — and of “potential vote buying” — is a problem.

“Even though the idea behind this grant-making may make sense, may even have been reasonable, the overall structure of the process is designed to create outcomes that would create suspicion,” said Queen, director of the Emory Center for Ethics.

The board’s leadership has argued that the new policy — drafted in a private November meeting by the DAFC executive committee that Bacote had recently joined as treasurer — was an attempt to formalize grant-giving policies and spread funds more evenly across the city.

“It was all about fairness and equity,” Bacote said.

In May, the board decided to table Bacote’s proposal until the organizations could refine their bids, with members saying they lacked specificity around key details such as how the money would be used, how many jobs would be created and what would happen if those goals weren’t met.

Bacote says there are no plans to re-introduce the proposals before the election.

The controversial grant process came up again during a July 14 meeting in which Fulton County Commissioner Lee Morris grilled the DAFC members for its per diem process, which Bacote has also been tied to after receiving $54,000 in per diem payments since 2011 — third-most of any board member.

“It doesn’t look good for Mr. Bacote, who is running for office, to use this (money),” said Morris, a Sandy Springs Republican.

The District 5 race is one of a handful of competitive races that could reshape the city council.

Bacote responded, in that meeting and elsewhere, that he would recuse himself from a vote on the grants, as he has in past cases where “the perception of a conflict of interest” has arisen. However, Bacote stopped short of saying such concern was warranted.

“I think it’s politics,” Bacote said.

Bacote is currently third in fundraising with $128,817 — including $30,000 he personally loaned to his campaign — despite entering the race late after two-decade incumbent Natalyn Archibong announced she was running for council president.