Atlanta City Hall bribery probe: Feds eye mayor’s deputy chief of staff

The latest subpoenas in the City Hall bribery investigation seek records of charges former Mayor Kasim Reed made in his city-issued credit card and those involving a company that sought a city contract in 2012. BOB ANDRES /BANDRES@AJC.COM

The latest subpoenas in the City Hall bribery investigation seek records of charges former Mayor Kasim Reed made in his city-issued credit card and those involving a company that sought a city contract in 2012. BOB ANDRES /BANDRES@AJC.COM

Nearly six years ago a man who had defrauded elderly investors out of more than $1 million convinced the City of Atlanta that he could turn restaurant grease into fuel and prevent it from being illegally dumped.

Now federal investigators want to know how his scheme slid past the City Council and the nature of his relationship to the mayor’s deputy chief of staff: Katrina Taylor Parks.

Two subpoenas obtained by the Atlanta Journal-Constitution on Tuesday reveal that the Department of Justice probe into corruption at City Hall has an expanded focus that includes former Mayor Kasim Reed's use of a city-issued credit card; Parks' personnel records, financial disclosure and ethics statements; and any communication between Parks and the man behind the grease venture: Marietta resident Paul Marshall.

Atlanta Mayor Keisha Lance Bottoms said Wednesday she did not believe the two new subpoenas would be the last.

“The unfortunate part for us as a city is that we don’t know what direction this investigation is going,” Bottoms told Channel 2 Action News Wednesday.

Katrina Taylor Parks served as deputy chief of staff under former Mayor Kasim Reed and holds that position for Mayor Keisha Lance Bottoms.

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Parks, who earns $200,000 as deputy chief of staff, went on medical leave April 17, the day the subpoenas were obtained by The Atlanta Journal-Constitution . She issued a statement through her attorney Wednesday.

"Katrina Taylor Parks is aware that the federal prosecutors are looking into a broad array of issues involving the City during the last eight years," said Parks' lawyer Jay L. Strongwater. "We are not privy to any particular concerns the government may have with respect to its investigation. Nevertheless, we continue to be available to work through any questions the government may have regarding outside vendors and contractors with the City."

Marshall, an investment advisor who was indicted last year on 14 counts of wire fraud, is scheduled to be sentenced next month after pleading guilty to a single count.

Jerome J. Froelich, Jr., Marshall’s attorney, declined to say if his client is cooperating with the City Hall investigation.

“I can’t answer that,” Froelich said. “Anything is possible.”

‘Inquiry is moving quickly’

In an April 3 subpoena, obtained by The Atlanta Journal-Constitution Tuesday, the Justice Department demanded any communication between Parks and four companies owned by Marshall.

In 2011, Marshall launched FOGFUELS, which proposed recycling restaurant grease into biodiesel fuel, and convinced the City Council to back the idea in 2012.

On Sept. 4, 2012, the Atlanta City Council authorized Reed’s administration to negotiate a sole-sourced contract with the company by a vote of eight to four, according to a record of the vote.

Paul Marshall pleaded guilty to wire fraud in connection with a scheme to bilk investors out of more than $1.5 million and was behind a biofuels recycling project endorsed by the Atlanta City Council in 2012.

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Then-city council member Lamar Willis championed the resolution and later faced an ethics allegation that he had a stake in the company. The city’s ethics office confirmed that Willis and Marshall had met with one another but dismissed the charge, saying it could find no proof Willis had a contractual relationship with the company.

At the time Marshall pitched his idea to the council, FOGFUELS hadn’t been successful anywhere else, and Marshall had a history of sanctions from financial regulators in his role as an investment advisor.

It’s unclear what role, if any, Parks played in negotiations either before or after the contract authorization cleared City Council. Parks wielded significant influence in Reed’s administration. She often was responsible for whipping up support on the council to advance Reed’s agenda. She has continued serving as deputy chief of staff under Bottoms.

“We don’t know if this is something specific or if this is looking at everything that the press has brought to the attention of the public,” Bottoms told Channel 2 in reference to the latest subpoenas.

Caren Morrison, a former federal prosecutor and professor at Georgia State University's College of Law, told Channel 2 that the subpoenas could have been the product of information Marshall provided investigators in exchange for a reduced sentence. Morrison said the widening nature of the investigation indicates the inquiry is moving quickly.

“Once you start getting multiple subpoenas and multiple tracks, they tend to feed off each other,” Morrison said. “You can uncover information that might be useful for one and the other … It looks like they’re circling closer and closer to centers of power within the mayor’s office.”

A council OK, then lawsuits

The biofuels deal ultimately never got off the ground.

Marshall could never raise enough money to build a facility to collect the grease. His other schemes were also catching up with him.

Three weeks after the council’s 2012 vote, Marshall was sued him in federal court for defrauding two investors and then came under scrutiny of the U.S. Securities and Exchange Commission in 2013.

A city spokesperson said Wednesday that the city never entered into a contract with FOGFUELS. Froelich, Marshall’s attorney, also said that FOGFUELS’ contract was never executed with the city because Marshall couldn’t raise the necessary capital.

But in a July 2013 deposition with the SEC, Marshall said under oath that FOGFUELS and the city were under contract. He described discussions with senior city staff and investment bankers about the potential for the city to issue bonds to build a grease recycling facility.

Subpoena seeks ethics filings

The federal bribery investigation has yielded four guilty pleas, and last month prosecutors filed an 11-count indictment against Rev. Mitzi Bickers, a political operative who was director of human services for the first three years of the Reed administration.

Prosecutors charged Bickers with four counts of wire fraud for not disclosing outside employment and outside income — some of which was derived from legitimate political consulting and some of which were bribe payments. The indictment also noted that Bickers knew it was against the city’s ethics policy to not properly disclose outside income and employment.

“Bickers filed multiple false City of Atlanta Financial Disclosure Forms under penalty of perjury via the Internet,” the indictment says.

The April 3 subpoena seeks some of those same financial disclosure statements and ethics pledges from Parks.

Taylor Parks’ financial disclosures show that she has never claimed any outside employment or income, since at least 2012.

Taylor Parks has filed for Chapter 13 bankruptcy protection at least three times since 1995, federal court records show. The most recent was in 2006, when she claimed assets and debts of between $500,000 and $1 million.

Staff writer J. Scott Trubey contributed to this report.

Prongs of the City Hall corruption probe

The mayor's office: Federal prosecutors want to review charges made by former Mayor Kasim Reed on his city-issued credit card, and records associated with Deputy Chief of Staff Katrina Taylor Parks and her involvement with a company seeking a biofuels contract with the city in 2012.

City procurement: Prosecutors are seeking to identify city employees who may have accepted bribes in exchange for steering contracts to two contractors who have pleaded guilty to bribery. The Rev. Mitzi Bickers, a former city employee, has been charged with bribery and pleaded not guilty in that investigation.

Contracting: Prosecutors have raided the offices of an engineering firm that has had contracts in the Watershed Department and at the airport. No charges have been filed.