Atlanta bribery probe costs taxpayers $1.4 million — and counting

Atlanta Mayor Kasim Reed, standing in front of boxes of documents related to the City Hall bribery investigation during a February press conference. The city has used an outside law firm for the past year to help it identify and prepare documents for the public, and the U.S. Attorney’s Office. (HENRY TAYLOR / HENRY.TAYLOR@AJC.COM)

Atlanta Mayor Kasim Reed, standing in front of boxes of documents related to the City Hall bribery investigation during a February press conference. The city has used an outside law firm for the past year to help it identify and prepare documents for the public, and the U.S. Attorney’s Office. (HENRY TAYLOR / HENRY.TAYLOR@AJC.COM)

The federal bribery investigation into city of Atlanta contracting has done more than shake officials at City Hall — it has clobbered taxpayers in the pocketbook.

The city spent more than $1.4 million on outside legal counsel from November 2016 to September 2017, for help providing documents subpoenaed by federal investigators and then releasing them to the public, according to invoices submitted by the Baker Donelson law firm.

Baker Donelson also redacted personal information from those documents before they were made public, according to the invoices, which were obtained by The Atlanta Journal-Constitution and Channel 2 Action News through the Georgia Open Records Act.

The invoices quantify the public cost of the scandal that has unfolded under Mayor Kasim Reed’s watch, and raise new questions about the city’s commitment to transparency.

After initially fighting the media over release of the subpoenaed documents, Reed staged a news conference in February surrounded by 1.4 million pages of records and declared the public release "the most transparent production of records in the city's history."

But the invoices provided to the AJC and Channel 2 contain significant redactions.

Invoices for outside legal work associated with the federal bribery investigation at Atlanta City Hall included numerous redactions, such as those pictured here.

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The AJC requested the invoices in July, and received them through the mail Nov. 8. More than 681 billable hours on the documents had all or portions of the work description blacked out. The redacted portions represent 14 percent of the 4,931 hours Baker Donelson spent on the project.

In total, 31 people associated with the firm billed city taxpayers an average rate of $294 per hour, according to the invoices.

City Attorney Jeremy Berry said the invoices "reflect hundreds of hours of legal review time and document production to ensure complete transparency — transparency both in responding to the federal government to assist in their current inquiry and also to the citizens of Atlanta."

Redactions on the invoices were allowable for attorney-client privilege or attorney “work product materials,” Berry said

But Cartersville attorney Lester Tate, who reviewed the invoices for the AJC, said he's not so sure.

“The redactions in the invoices are extensive and a number of them seem to relate to conversations with the issuer of the subpoenas,” Tate said, referring to the U.S. Attorney’s Office in Atlanta. “What the city’s lawyer discusses with lawyers representing others is not covered by the attorney-client privilege for the simple reason that its not a communication between lawyer and client.

“The work product privilege prevents disclosure in civil lawsuits where attorneys have obtained information in anticipation of litigation. I’m not aware of any existing or contemplated civil action here.”

In addition to Baker Donelson, the city paid $27,000 to the data analysis firm Sullivan Strickler for help in responding to the subpoenas. And the firms racked up another $3,000 in expenses, documents show.

A spokeswoman for the city said the seven-figure cost of the legal bills were in line with the city’s expectations, and would be spread over two budget cycles.

Elvin “E.R.” Mitchell Jr. walks to the federal court before his sentencing on federal bribery charges. Mitchell was the first of two contractors to plead guilty in the investigation of City Hall pay-to-play contracting. HYOSUB SHIN / HSHIN@AJC.COM

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Law firm started work for the city in September 2016

Baker Donelson started working on the document production Sept. 28, 2016 — about one month after the U.S. Attorney's Office delivered the first of three known subpoenas to City Hall.

By Jan. 17, when the U.S. Attorney's Office issued a press release announcing the first bribery charge against contractor Elvin "E.R." Mitchell Jr., the law firm had accumulated 311 billable hours for about $100,000.

Descriptions for the vast majority of the work were blacked out on those early invoices, but the legible portions include document review, calls with prosecutors and the production of 950,000 pages of materials to federal agents.

By the end of January, when the city had produced an additional 297,000 pages of materials to prosecutors, the AJC and Channel 2 made several requests for the documents related to the investigation.

After initially being told that the subpoenaed documents would be provided for a payment of $1,135, the city reversed itself and denied each request, saying the documents were exempt because of the federal investigation.

The AJC and Channel 2 then retained lawyers to argue the documents were not exempt, and the Reed administration reversed itself again by saying federal prosecutors assured it that releasing the records would not hamper the investigation.

At his Feb. 9 press conference, Reed stood in front of a wall of banker's boxes seven high and 21 across, with hundreds more stacked on banquet tables inside City Hall's old council chambers. The mayor said his administration was cooperating fully with the investigation and was being transparent with the public.

But reporters from across the city soon found a majority of the 1.4 million pages were blank; or contained spreadsheets shrunk to microscopic size to fit on letter-sized pieces of paper; or featured information about school lunch menus or crime reports that had no relation to the investigation.

It would take the city weeks before it provided the records in a searchable, electronic format, and then only after threat of legal action by the AJC and stern communication from Georgia’s Attorney General.

City officials told the AJC that the 1.4 million pages of documents produced for the public in February have since been recycled. (HENRY TAYLOR / HENRY.TAYLOR@AJC.COM)

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Lawyers still reviewing documents in August

Most of the work descriptions on the invoices involve review and analysis of documents. The AJC was unable to distinguish work performed to produce documents for the U.S. Attorney’s Office from redaction of documents for the public.

But a majority of the billable hours was performed by Baker Donelson in April, May and June, for which the city paid a combined $906,000. The city made public 225,500 pages of redacted documents April 11.

Some of the other work claimed on the invoices includes review of news articles; maintenance of logs to track documents and redactions; along with email exchanges and meetings with attorneys and paralegals at the firm.

The invoices also show that lawyers for Baker Donelson were still reviewing documents and performing other work related to the investigation as of August, when the firm billed the city $77,000 for 263 hours work.

The city made public the latest batch of documents Sept. 1.

Assistant U.S. Attorney Kurt Erskine told the AJC last week that the investigation is still active, and there are several FBI agents and one from the IRS working the case.

It’s unclear how much work Baker Donelson has performed for the city since the last invoice on Sept. 13 — the city says it has yet to receive the firm’s October invoice. The firm’s employees working on the project billed the city hourly rates that range from $125 to $450 per hour.

Since the AJC’s initial insistence for public release of documents turned over to federal prosecutors, more than 2 million pages have been made available electronically.

The AJC asked the city what became of the 1.4 million pages of paper documents that were trucked to City Hall in February. A city spokeswoman told the AJC this week that they were all recycled.

How we got the story

The Atlanta Journal-Constitution and Channel 2 Action News were among the first news organizations to press the city of Atlanta for the release of public records related to the investigation of bribery allegations at City Hall. The news organizations retained lawyers to obtain the records after the city initially declined to make them public. Even after the city released paper copies of the documents, the AJC and Channel 2 continued to press the city to provide the records electronically, which it ultimately did. In July, the AJC requested copies of invoices submitted to the city by the outside law firm engaged to provide the records to the federal government, along with the city's contract with the outside law firm. The city mailed heavily redacted copies of the invoices Nov. 3 and provided a letter of engagement with the law firm Nov. 15, waiving a $744 fee. AJC investigative reporter Dan Klepal read and analyzed the 81 pages of invoices turned over by the city.