Nearly $900,000 bonuses, covered by taxpayers, were found illegal by city of Atlanta report.

Atlanta taxpayers unlikely to recoup illegal employee bonuses, prizes

The city of Atlanta might be able to reclaim some of the $800,000 in bonuses and prizes handed out by former Mayor Kasim Reed’s administration and council members at the end of last year, but it would have to sue city employees to do it.

That’s the opinion of Attorney General Chris Carr’s office, which told The Atlanta Journal-Constitution this week that “any city funds spent inappropriately might be subject to civil recovery efforts.”

Two investigations have found that the bonuses were not only inappropriate, but illegal.

The giveaways, awarded in the midst of a federal corruption investigation of City Hall, ranged from five top-level executives in Reed’s administration getting $15,000 each, to relatively small prizes of less than $1,000 given away to front-line staffers in raffles and contest prizes during holiday parties.

report last month by City Auditor Amanda Noble and City Ethics Officer Jabu Sengova found the payments violated both city code and state law governing gratuities, which are government giveaways without a return for taxpayers.

The report found equal fault with bonuses awarded by council members to their staffs, and described top city officials working together to bypass internal financial controls in a manner that violated those laws. It said Reed “lacked the legal authority” to give away city tax dollars, and former Chief Financial Officer Jim Beard “abused his position” in awarding himself a $15,000 bonus.

Reed and Beard dispute those conclusions.

RELATED CONTENT: BONUSES

Council President Felicia Moore said it’s unlikely the city would sue past or present employees to get bonuses back, but said they could ask that the money be returned.

“The AG’s opinion at least lets the council know the possibility is there,” Moore said. “But I’m sure we’d have to hire outside (lawyers) and how much money would it cost?”

The outside investigation into end-of-year bonuses handed out by Mayor Kasim Reed's administration asked several members of the mayor's inner circle who initiated the idea of giving the bonuses. Here's what it found.

The internal investigation on the bonuses followed a $150,000 outside investigation by the Thompson Hine law firm, that also determined the awards from Reed’s office and council violated state law. That report recommended that the city concentrate on shoring up city code and ensuring improper bonuses aren’t awarded in the future, rather than trying to recoup the money.

Mayor Keisha Lance Bottoms said her administration is going to follow recommendations in the reports.

William Perry, of Georgia Ethics Watchdogs, said council should absolutely fix the city code, but it shouldn’t give up on getting back taxpayer money. He said city employees who now know the awards were wrong should be lining up to return the money.

And if not, Perry said elected leaders should try shaming them: “Use the bully pulpit. Ask for the money back.” 

At least seven senior city officials have returned the money out of 140 employees who received either bonuses or prizes, the AJC has found.

Six who returned the money received $10,000 bonuses. They were former Renew Atlanta General Manager Faye DiMassimo; former interim procurement chief Susan Garrett; Planning Commissioner Tim Keane; Police Chief Erika Shields; Assets Management Officer Jalal Slade; and former chief sustainability officer Stephanie Stuckey.

The size of each bonus was based on a formula tied to salary; $15,000 bonuses went to the highest earning staffers.

A spokesman for former Human Resources Commissioner Yvonne Yancy said she returned her $15,000 bonus last month, which a city spokesman confirmed. Yancy also awarded $57,500 in bonuses to 11 members of her staff just days before she left City Hall for the private sector.

The top bonuses paid out by Reed were to his five most senior executives — $15,000 each to CFO Jim Beard; City Attorney Jeremy Berry; Chief of Staff Candace Byrd, Chief Operating Officer Dan Gordon; and Yancy.

Another 19 of Reed’s managers received $10,000 bonuses that were not returned.

Then-Atlanta Mayor Kasim Reed speaks during his final workday at Atlanta City Hall last year. Bonuses given out in the final days of his administration were determined to be illegal, according to a pair of city investigations. ALYSSA POINTER/ALYSSA.POINTER@AJC.COM
Photo: The Atlanta Journal-Constitution

The AJC attempted to contact several former members of the Reed administration, some of whom are holdovers under Mayor Bottoms, who have not returned their bonuses. They include Beard, former Reed spokeswomen Jenna Garland and Anne Torres, new city CFO Roosevelt Council and Watershed Commissioner Kishia Powell.

None immediately returned messages seeking comment.

Tom Sabulis, a former AJC opinion editor who later joined the Reed administration as a speechwriter and who still works in the mayor’s office, ended a conversation and walked away from a reporter when asked if he would return his $5,000 bonus.

At a press conference last week, Parks and Recreation Commissioner Amy Phuong wouldn’t offer a direct answer when asked if she would repay her $10,000 bonus.

“I feel like I can’t really answer that right now,” Phuong said. “I’m just going to continue to support the mayor’s vision, Mayor Bottoms’ vision, [of] running a very transparent and connected government.”

Some council members say they worry about how the bonuses are viewed by the public. For the past three years, City Hall has been under a federal corruption investigation that spans all eight years of the Reed administration.

“There’s enormous loss of trust in government when things like this happen,” Councilwoman Jennifer Ide, who joined the council in January, said in a recent committee meeting.

But Moore said her colleagues on council would have to decide to pass a resolution asking that the money be returned.

“I just haven’t seen any interest in doing that,” she said.

Our reporting

The AJC’s watchdog coverage of Atlanta City Hall includes previous reporting on former Mayor Kasim Reed’s use of a city-issued credit card that resulted in Reed refunding taxpayers $12,000. The AJC has also reported on Reed’s bid to use unclaimed salary to cover $40,000 in luxury airfare for a trip to South Africa; his use of police officers to pick up his dry cleaning and meals; former CFO Jim Beard’s use of a city-issued credit card to pay a for a $10,000 Paris hotel bill; and a $12,000 farewell party for Reed and his cabinet at American Cut restaurant in Buckhead.

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See which employees received bonuses and who returned or declined them.

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