Atlanta bribery probe reaches deep into city procurement

As Atlanta’s procurement chief, he was supposed to safeguard contracting and protect taxpayers. Instead, Adam Smith took bribes.

Smith's stunning admission in federal court this month revealed that corruption at City Hall was far more pervasive than initially believed a year ago when the federal probe of pay-to-play contracting first exploded in public.

New documents obtained by The Atlanta Journal-Constitution, including the latest subpoena for city records by the U.S. Attorney's Office, show the investigation has grown beyond two construction executives paying $1 million for sidewalk and emergency snow removal contracts.

While federal officials continue to comb through evidence related to that part of the investigation, testimony and secret recordings provided by Smith have led the government down a separate and potentially more significant track. It involves tens of millions of dollars in contracts awarded to six related companies that have performed work at the airport and for the city’s watershed department.

Smith admitted to accepting at least $44,000 in exchange for contracting information from an unnamed vendor, and received a reduced sentence of 27 months on Jan. 16 because of his help with the investigation. It was a 40-percent reduction to the sentence Smith would have otherwise received.

Byung “BJay” Pak, U.S. Attorney for the Northern District of Georgia, confirmed in an interview with the AJC that information provided by Smith has expanded the probe beyond contractors Elvin “E.R.” Mitchell Jr. and Charles P. Richards Jr., the first two people who were charged and subsequently pleaded guilty to paying bribes in the case.

Pak also said his office is willing to make other deals, similar to the one made with Smith.

“We reward people who come in, accept responsibility, admit to what they’ve done to the full extent of their conduct, and that they could help themselves by coming in early before we take specific actions,” Pak said. “I’m willing to give up more than 40 percent (of a jail sentence) if people will come in and hang the moon, so to speak.

“I encourage them to do that now, because … we’re going to track down every lead and follow up on it.”

» RELATED: Read the AJC’s exclusive interview with U.S. Attorney Pak

The secret recordings that Smith made and has provided to prosecutors could be the biggest break in the case so far, according to Ross Albert, a former lawyer with the U.S. Securities and Exchange Commission and former special assistant U.S. Attorney in Atlanta.

“That is one of the most fertile areas for potential future charges,” Albert said of Smith’s recordings. “They’ve got a (new) cooperating witness. It’s not he said, she said. In lots of these types of cases, tapes are your best friend. Anyone who talked to him about illegal activities should feel uneasy right now.”

Adam Smith, the city’s former purchasing chief, was sentenced in federal court Jan. 16, 2018. RICHARD MILLER

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Subpoena names major contractor

The man at the center of the latest subpoena is Jeff Jafari, a political supporter of former Mayor Kasim Reed, his successor Keisha Lance Bottoms and several City Council members. Six companies connected to Jafari, his wife and his former business partner, George Reynolds, have performed about $100 million in taxpayer-funded work in the time frame of the investigation.

Each of those companies is named in the Jafari subpoena, which asks for contracts, contract extensions and bids for city work by each. The subpoena, dated Sept. 19 and turned over to the AJC this month, also requires the city to release information about Jafari dating back to 2012, and asks for communications and documents related to the city’s deliberative process in awarding contracts.

Pak declined to say if Jafari is a target of the federal probe, and declined to discuss the subpoena or anything to do with any potential evidence gathered by federal authorities.

Documents from the Jafari subpoena have not yet been made public, although the city says they will be available soon. Jafari and Reynolds were executives in an engineering firm called The PRAD Group, which contributed heavily to Bottoms’ mayoral campaign.

The government’s latest subpoena to the city of Atlanta asks for information about six companies connected to Jeff Jafari, his wife and his former business partner, George Reynolds. Jafari is a former executive with The Prad Group, which has done millions of dollars worth of business for the city.

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Bottoms returned more than $25,000 in campaign contributions after the FBI raided PRAD's Sandy Springs office in September, and after the contributions were later made public by the AJC. A city spokeswoman said then-candidate Bottoms learned of Jafari's connection to the investigation in September through media reports of an FBI raid of PRAD's offices.

Reynolds did not return a message from the AJC seeking comment. But Steve Sadow, Jafari’s defense attorney, said he welcomes disclosure of the records.

“A complete and thorough review of those records will reflect that all of the city of Atlanta’s business dealings with Mr. Jafari were lawful and in the best interest of the city,” Sadow said.

Pak would not comment on whether there are additional targets of the investigation, or if the investigation has zeroed in on specific public officials.

“There’s only one path, and that’s Atlanta contracting and procurement,” Pak said. “There’s an overarching investigation and then there’s different components of it.”

Who took the bribes?

While Mitchell and Richards have both reported to prison, the AJC has learned that the city is still turning over documents related to them. In October, a month after both Mitchell and Richards had been sentenced, the city produced 1.9 million new documents in response to a 2016 subpoena naming the two men, the AJC has learned.

“It’s still an ongoing investigation,” Pak said. “It’s not just about Mitchell’s case. (Those documents) could be related to all kinds of things, other than just Mitchell” and Richards.

Perhaps the biggest unanswered question relating to Mitchell and Richards is who they conspired to bribe. Prosecutors have only said that they gave more than $1 million to an unnamed person under the belief that the funds would be paid to one or more city officials with influence over the contracting process.

The Rev. Mitzi Bickers, who helped Reed win his first race for mayor in 2009 with a substantial get-out-the-vote effort, has been the subject of two federal subpoenas — one to the city of Atlanta, where she worked as Reed's human relations chief; and one to Clayton County, where she currently works as a chaplain for Sheriff Victor Hill.

Bickers also had deep personal and financial ties to Mitchell, whose companies paid Bickers and companies connected to her $1.6 million from 2013 to 2015, the AJC reported last year.

It’s unclear what work Bickers did for Mitchell, but the payment occurred within the 2010 to 2015 time frame Mitchell admitted to paying bribes for city work. The AJC also reported that Bickers’ attorney had asked her to document all deposits into her bank accounts “to prove taxable income.” She has not been charged.

But prosecutors have at least one card they have not yet played.

Last November, Shandarrick Barnes, a former city employee who worked on the side for Bickers, pleaded guilty to attempting to intimidate Mitchell and is cooperating with the government's investigation.

In September 2015, Barnes threw a brick through Mitchell’s living room window with a threatening note telling the contractor to keep his mouth shut. Dead rats also were littered about Mitchell’s property.

All of that happened about two months after officials from the FBI and the IRS first confronted Mitchell. But in recent weeks, Pak’s office has asked the court to delay Barnes’ sentencing for two months so that he can continue helping with the investigation.

“There is important investigative work that still needs to be accomplished in the months ahead,” Pak’s request of the court says.

Barnes is now scheduled to be sentenced in April. In an interview, Pak said the request is not unusual and is intended to provide the judge with more information about Barnes’ cooperation before sentencing.

Brian Steel, attorney for former Atlanta Purchasing Director Adam Smith, speaks to photographers and journalist just outside the Richard B. Russell Federal Building and just after the sentencing of Smith Jan. 16, 2018. CHRIS HUNT / SPECIAL

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Major issue for new mayor

Pak was an assistant U.S. attorney from 2002-08, during the prosecution of former mayor Bill Campbell. It was the last major public corruption case against city of Atlanta government officials.

Pak said the scope of this investigation is different, but “the types of things we are seeing in this case, I think there are similar tones and similar types of behavior … as we’ve seen in the previous cases.”

Former Mayor Shirley Franklin entered office in 2004 and was forced to confront and manage the fallout of the federal bribery investigation of the Campbell administration. That scandal led to a number of convictions including Campbell, who went to prison for tax evasion.

“The key is not what you put on paper, it’s not what you talk about, but what you do, how you demonstrate your commitment to an open and transparent process,” Franklin said. “Every mayor has to figure that out on their own.”

Franklin, who endorsed Mary Norwood during the mayoral campaign, said she would advise Bottoms to conduct the city’s business with transparency, and fix the problems that allowed corruption to taint the city’s purchasing system. Franklin said Bottoms is clear-eyed about the problems.

Bottoms has promised big changes to the city’s procurement process, and she has assembled a team of business leaders to advise her. The mayor said she would like more scrutiny on the personal finances of people in key purchasing positions, but said the city won’t know exactly what to address until the federal investigation is complete.

“I’m taking a fresh look at everything,” Bottoms said.

For his part, Pak said he has a simple desire for the outcome.

“We hope to bring those who committed crimes to justice and, through prosecution in open court, to present evidence of the deficiencies and defects in the system that they have,” Pak said. “And I hope once we finish our investigation that we won’t have to come back.”

AJC City Hall reporter Stephen Deere and newsroom specialist Jennifer Peebles contributed to this story.