Most days, the Development Authority of Fulton County (DAFC) is a bureaucratic backwater, avoiding public attention as it doles out millions of dollars in tax breaks each month to developers and big companies.
On Wednesday, the authority’s top leader will be center stage, called before Fulton commissioners for what might be an uncomfortable round of questions following investigations by The Atlanta Journal-Constitution that exposed a secret salaried job of a former chairman and lavish per diems paid to the agency’s board of directors.
Commissioners also are set to debate modest guardrails for DAFC, which operated for years outside the norms of other Fulton departments and government policies. The proposals, including a new cap on per diem payments and the first-ever financial disclosure requirements on DAFC board members, are crucial first steps to rein in a rogue agency, critics say.
Michel “Marty” Turpeau IV, DAFC’s chairman and interim executive director, has touted new per diem policies and a plan to publish information about board fees on the authority’s website, among other reforms. But behind the scenes, Turpeau is trying to soften some of the county legislation that seeks to rein in the authority’s per diems, the AJC learned Tuesday.
“I’m anticipating that Mr. Turpeau will talk about the changes that they have made and sort of reforms they have made since this investigation has been underway and since their shenanigans have been so public,” said Fulton Chairman Robb Pitts.
Wednesday’s board of commissioners meeting might be just a preview of fights to come before the Georgia General Assembly next year. Loose state laws governing development authorities allowed financial abuses to fester in secret. Real reform, critics say, will require a state overhaul.
“From my perspective,” Pitts said, “it may be too little too late from the point of view of what I’m hearing from several key, prominent state legislators.”
Credit: Steve Schaefer
Credit: Steve Schaefer
In an email, Turpeau said the authority board understands commissioners’ concerns “and we are grateful for their patience and support during this difficult time.”
“We have adopted policies of our own that are already in agreement with some of the recommendations they will discuss,” he said. “DAFC is an essential economic development partner for Fulton County and the State, so we would like the opportunity to move forward with our new leadership and new board members to focus on ensuring economic opportunities are available to all of the communities we serve together.”
Questionable money, incentives
DAFC is a government agency empowered to grant tax breaks and other incentives to companies and developers, inducements authority officials say are necessary to create jobs and expand the tax base.
Critics say the authority often backs projects in hot neighborhoods such as Buckhead, Midtown and along the popular Atlanta Beltline that don’t need help. For years, DAFC ignored pleas from the city of Atlanta and Atlanta Public Schools to stay out of their jurisdictions.
The city has its own authority, known as Invest Atlanta, and critics said competition between the two agencies — both of which earn fees from granting incentive deals — hurts taxpayers. Commissioner Lee Morris has said the authorities are incentivized to do deals regardless of if they make sense to the taxpayer.
Though controversy over DAFC’s tax breaks has ebbed and flowed for years, nothing has quite captured the public’s attention like the per diem controversy.
The AJC uncovered DAFC paid its board members $1.1 million in per diems or board stipends since 2011. Three former members — former chairman Bob Shaw, Samuel Jolley Jr. and Walter Metze Jr. — collected more than $800,000 combined. Shaw alone received more than $500,000 each in per diem and salary from a secret job he held as director of external affairs while he served as board chairman.
Shaw and Jolley at times were paid $200 per diems by the number of items on meeting agendas or for signing official documents. None of the three men have responded to requests for comment.
State law requires the county commission to set per diem for certain development authorities, but Fulton officials can find no record they ever did, raising questions about the legality of the per diem payments.
‘Statute couldn’t be any more clear’
On Wednesday, commissioners will consider the board appointment of Johns Creek Mayor Mike Bodker to replace Steve Broadbent, whose term expired in May.
Broadbent, a former vice chairman, told the AJC in an interview he discovered Shaw was paid separate per diems for each document he signed when Broadbent filled in for Shaw as chairman last fall.
Broadbent said after one meeting in 2020, he signed four documents. Days later, DAFC made a direct deposit into his bank account totaling $1,000 — $200 for his attendance and $200 for each signature.
Broadbent said he informed a DAFC staffer he’d been overpaid.
“She explained the way the process worked under Bob (Shaw),” Broadbent said. “It was then that I did my research and found out what the state statute was and the state statute couldn’t be any more clear. It is a single per diem per day.”
Broadbent said he returned the overpayment and drafted a per diem policy. He spoke to the authority’s lawyers, who helped edit the proposal. Broadbent said his proposal hit a wall with Shaw.
Broadbent said Shaw, who was out on medical leave, relayed a message that the matter would not move forward until new board elections were held in November.
“I was the guy who was trying to do the right thing,” Broadbent said. “Identify the problem, research the problem, fix the problem, get it implemented and you move on and you do good stuff for Fulton County. That was my objective.”
Elena Fash, Shaw’s daughter, said neither she nor her father recalled the exchange Broadbent described.
When board elections were held in November, a new executive committee was named and Broadbent was no longer vice chairman. Asked if he felt there were repercussions for asking questions, Broadbent said: “I don’t want to … I don’t know. I will let somebody else try to figure that one out.”
Broadbent gave credit to Turpeau for shepherding through the per diem policy after the board elections.
In June, DAFC’s board enacted further restrictions as the AJC prepared to publish a story on Shaw simultaneously earning a salary and per diem, prohibiting board members from earning both a salary and board fees.
Turpeau, Broadbent and board Treasurer Sam Bacote also recently announced they would return duplicate per diems they received prior to installing the new board policy — totaling about $3,000 — uncovered by the AJC.
‘Clear the air’
Turpeau is sure to face a grilling Wednesday.
Commissioners want to know why authority board members didn’t report the per diem abuses to the county auditor, Chairman Pitts or the county attorney.
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Credit: BORN IMMACULATE
Credit: BORN IMMACULATE
Morris, earlier this month, said he was upset no one told him about Shaw’s per diems and secret job when Morris nominated Shaw for re-appointment to the DAFC board. Turpeau also has said he learned of Shaw’s job with the authority in November. Shaw’s job did not end until the end of January.
Morris’ legislation would cap board per diems at $105 per day, and only for official DAFC meetings. DAFC board members also would have to report their financial interests to the county, just as any elected official must.
Late Tuesday, the AJC learned Turpeau on Monday tried to lobby at least one commissioner to weaken Morris’ proposed reforms. In an email to Commissioner Bob Ellis obtained by the AJC, Turpeau proposed hand-written revisions of the legislation that would allow authority board members to earn daily per diems for more than just official board meetings.
”This seems to be another exercise to attempt to cripple the work performed to promote economic development,” Turpeau wrote in the email, which he also sent to state Sen. Brandon Beach, a powerful Republican under the Gold Dome and a DAFC vice chairman.
Credit: Rebecca Wright
Credit: Rebecca Wright
Morris has called it a conflict of interest for Turpeau to serve as interim executive director, earning a salary and managing the staff and projects the board will consider, while also serving as chairman.
Turpeau, who earns $15,000 per month as interim executive director, has said he forfeited his board per diems while serving as executive director.
Turpeau will remain board chair, but announced Monday he will step down as interim executive director at the end of August, calling his dual roles “a public distraction from moving the DAFC forward.”
Critics say the AJC’s reporting has raised questions about how DAFC’s spending habits could have avoided detection.
The AJC has found DAFC uses third-party accountants and an online bill payment platform to disburse its per diem payments, instead of using the county’s finance and human resources departments.
Independent annual audits of the authority also failed to catch the per diem abuses uncovered by the AJC and Channel 2 Action News.
To date, DAFC has yet to authorize a full forensic audit of its finances, a common step in the wake of a financial scandal.
Pitts said he would not be surprised if a commissioner on Wednesday suggested that the county, either through county auditor Anthony Nicks or some other entity, audit DAFC. Nicks, according to his biography, is certified in government auditing and fraud examination.
The chairman said he couldn’t imagine DAFC turning down an offer get rid of all these distractions.
“That would be very instructive if they were to refuse to do so,” Pitts said. “I would think that they would want to. I’m just trying to clear the air and trying to clean up their act.”
The AJC’s previous reporting revealed a culture of loose financial oversight at the Development Authority of Fulton County. Board members gave themselves per diems that elected county commissioners now believe may not have been legal. Using public tax filings and documents received through the state’s Open Records Act, the AJC has shown that one member, Bob Shaw, earned hundreds of thousands of dollars more than the authority had previously disclosed for a staff position that few members knew about. The AJC’s reporting led Shaw to step down, pledges of transparency by the authority and scrutiny from some state and local lawmakers.
