Questionable payments made to Fulton Development Authority board members

For years, DAFC paid per diems to its appointed board of directors, mostly business executives, without a written policy, handing out $200 daily fees in ways that make it difficult to determine if they were legal or appropriate.

Records show two businesses also received thousands in per diem fees, including a parking company owned by the board’s current chairman and interim executive director, Michel “Marty” Turpeau IV.

Joyce Kitchens, an employment lawyer who advises government and private entities, said most state statutes restrict payment to only one per diem payment per day and nothing in the law allows companies to receive the fees.

She said she has never seen a government agency pay per diems without a policy requiring rigorous documentation. Kitchens said public agencies have a higher standard to uphold to protect taxpayers.

“It appears to demonstrate an absence of care for the public trust,” she said.

State law allows authorities in Fulton and three other large metro Atlanta counties to pay per diems for board members’ time, but DAFC appears to be the only one that does.

From January 2019 through April of this year, DAFC paid its nine-member volunteer board nearly $300,000, an AJC analysis shows. Critics contend Fulton taxpayers pay a high cost for a public service that other communities get for free.

“These guys are fleecing the taxpayers,” said William Perry, who leads the citizen group Georgia Ethics Watchdogs. “Every one of them ought to apologize and return every cent of the money.”

DAFC defends pay

Turpeau defended the per diem pay as legal and appropriate for the time and effort board members put into attracting jobs and investment to the county. He said the authority estimates that deals the board approved over the past two-plus years will lead to tens of thousands of new jobs and hundreds of millions in new tax dollars.

“The benefits provided to the communities we serve, and the new tax dollars gained by the local taxing jurisdictions far outweigh the per diems earned by our hard-working board members,” Turpeau said in a statement.

Development authorities operate with broad autonomy and receive little scrutiny from the public, but the boards play an outsize role in corporate recruitment and real estate projects by granting property tax breaks. Board members are typically appointed by elected leaders and tend to be connected business or political figures.

DAFC is one of the state’s biggest providers of corporate incentives, and its board rarely votes against projects. In that 2019 meeting for which Shaw was paid multiple per diems, the agency gave initial or final approval to $30 million in tax breaks for apartment developers, a Midtown high-rise office complex and warehouse projects.

Under Georgia law, development authority board members cannot receive compensation for their services, but they can be reimbursed for actual expenses incurred such as travel and meals.

In jurisdictions of more than 550,000 people, such as Fulton, authorities can reimburse board members for their time by paying a per diem “for each day, or part thereof, spent in the performance of their duties.”

Authorities in the state’s other largest counties, Cobb, DeKalb and Gwinnett, said they do not pay per diems for board members’ time. Neither does Invest Atlanta, the city’s development authority.

DAFC records show Shaw, whose term expired on Monday, received $90,700 in total per diem payments since January 2019. Board Secretary Samuel Jolley Jr. was paid $51,504, while Turpeau, received more than $35,000 in that time. Turpeau also can make more than $15,000 per month during his stint as interim executive director.

DAFC’s $200 daily rate is nearly double that paid to members of the powerful Board of Regents of the University System of Georgia. DAFC typically employs about five people and has a $2 million budget, while the regents oversee 26 colleges and universities and a budget of $2.4 billion.

Turpeau said he doesn’t know when DAFC started paying board fees. Turpeau became chairman in November and the board instituted a written per diem policy that caps payments at $200 per day.

Before then, rather than logging their hours, some board officers were paid by the agenda item to reflect work they performed ahead of meetings to prepare matters for consideration by the full board, Turpeau said. That is no longer allowed.

“The prior practice was to use items listed on agendas as a tracking mechanism as nearly all agenda items require review of documents and execution,” Turpeau said. “Regardless of whether a specific project is approved, significant work is involved on the front end with vetting and reviewing documents.”

The per diem rate was approved by the county commission, Turpeau said.

Shaw, a former chairman of the Fulton and state Republican parties, has served on the DAFC board since the 1990s and was its chairman from 2002 until last year.

He has been nominated to re-join the board, replacing Tom Tidwell, who is resigning. Shaw’s nomination is expected to go before the county commission on Wednesday.

Fulton Commission Chairman Robb Pitts said commissioners appoint members, but the authority governs itself.

Pitts said some commissioners have questioned whether Fulton needs its own authority as many of the county’s municipalities have their own agencies.

“It’s very revealing and some would say even disturbing,” Pitts said of the per diems.

‘A very valuable signature’

Turpeau said when he became chairman last year, the board’s executive committee decided it would be “prudent” to have a written per diem policy.

Daily per diems are authorized for attendance at board and committee meetings, representation of the authority at outside events and work totaling at least two hours directly related to board business. Reviewing and completing documents counts, as does travel to meetings and waiting on couriers to deliver documents.

Before November, some members also charged per diems for each of multiple meetings held the same day, records show. Shaw, for instance, billed for multiple meetings held on the same day at least four times in 2019.

Kitchens, the employment lawyer, questioned the legality of payments made before the authority formed its per diem policy last November.

“When funds are disbursed without any statutory or policy authority there appears to be a breach of fiduciary duty,” she said.

Records show Shaw and other board officers also have received per diems for signing government documents.

Since January 2019, Shaw received at least $20,800 for signing bond agreements and other documents, DAFC records show. One line item in the authority’s financial records shows Shaw billed $1,400 on one occasion last year for “7 June signatures.”

“Oh my God, that’s a very valuable signature,” said Perry, with Georgia Ethics Watchdogs.

Credit: Greg Bluestein

Credit: Greg Bluestein

Turpeau said bond documents are often lengthy and require extensive time to review.

Nowhere in state law or the November policy are businesses allowed to collect board fees. The Aaron Group, a parking company where Turpeau serves as president, was paid a total of $5,600 in February and March, authority records show. A catering company was paid more than $7,000 in 2019.

“There is no legal authority for that at all,” Kitchens said.

Turpeau said the payments to the Aaron Group were for per diems he earned as chairman, and the authority’s accountants allowed the payments. He said the payments were transacted that way for tax purposes. He said he is the sole owner of the company, an S-corporation that enjoys certain tax advantages.

Turpeau said payments made to the caterer were a vendor expense, not per diem payments, and he brought the error to the attention of the authority’s accountants after the AJC inquired.

A conflict?

The AJC and Channel 2 obtained DAFC per diem records from Julian Bene, who obtained them via the Georgia Open Records Act. Bene is a former Invest Atlanta board member who is challenging the legality of four DAFC-approved property tax breaks.

The Georgia Court of Appeals is scheduled to hear arguments on the challenges on Wednesday.

Turpeau said the challenges put at risk projects involving 848 jobs and 83 affordable housing units. Turpeau accused Bene of attempting to discredit DAFC ahead of the hearing.

DAFC claims tax breaks granted since 2019 are responsible for billions in investment, which grows the tax base. But critics say they often are giveaways for projects that would have happened without them, foisting a heavier property tax burden on other businesses and homeowners.

Bene said DAFC’s per diem payments are incentives for board members to approve tax breaks when they should be looking out for the taxpayer.

“In my view, it’s a huge conflict of interest,” he said.

Our reporting

The Atlanta Journal-Constitution examined hundreds of pages of financial records from the Development Authority of Fulton County and found board members were paid tens of thousands of dollars in questionable per diem fees. These fees are paid to board members, who are not employees, to reimburse them for their time. The AJC also learned the authority did not have a per diem policy until November.