Bottoms releases summary of investigation into disputed $40k payment

An outside investigation into a $40,000 payment for luxury airfare for former Mayor Kasim Reed faulted Invest Atlanta CEO Eloisa Klementich and recommended changes to Invest Atlanta’s relationship to a related charity. (INVEST ATLANTA)

An outside investigation into a $40,000 payment for luxury airfare for former Mayor Kasim Reed faulted Invest Atlanta CEO Eloisa Klementich and recommended changes to Invest Atlanta’s relationship to a related charity. (INVEST ATLANTA)

The city of Atlanta on Wednesday quietly published on its website a three-page summary of the investigation into a controversial payment of luxury airfare to South Africa last year for former Mayor Kasim Reed and several members of his staff.

No aspects of the investigation, which cost taxpayers $100,000, had been previously made public because the investigative results were presented orally to the Invest Atlanta board of directors in a closed-door executive session, and were never committed to writing.

Following the presentation, Invest Atlanta's board reprimanded chief executive Eloisa Klementich, stripping her of a contract that guaranteed her a large severance upon dismissal.

The executive summary, requested by Mayor Keisha Lance Bottoms, is dated Aug. 13 and was released three weeks after city officials responded to an Atlanta Journal-Constitution request for the report by saying no such document existed.

The executive summary says 24 people were interviewed during the investigation, but does not provide any of those names.

The investigative results closely tracked reporting from The AJC and Channel 2 Action News, which broke the story of the $40,000 payment in April. 

The executive summary says that Reed directed a donation of his unclaimed salary to a non-profit controlled by Invest Atlanta; that the money was given back to the city before Partners for Prosperity's board met to approvethe transaction; and that Reed signed Klementich's contract on the same day the money was transferred back to the city.

The summary says that Reed told investigators that he received "legal and accounting advice regarding the contemplated transactions," but it makes no mention of which firms provided that advice, whether investigators confirmed that the advice was provided, or what theadvice was.

The investigation also concluded that “the timing of former Mayor Reed’s signing of Klementich’s contract and the distribution of the $40,000 donation were not connected.” But it gives no reasoning for how that conclusion was reached.

The report also says the transactions do not violate any laws.

“The investigation concluded that Eloisa Klementich’s actions as a PFP Board member, were not illegal, per se; but her actions did not adhere to board governance standards,” the report says. “The investigation further concluded that Ms. Klementich’s actions blurred the lines between the operations of PFP, the role of the PFP board as directing the organization’s purpose, and her role as Invest Atlanta CEO.”

It did not address Reed’s role in directing the transactions.

The summary recommended that Invest Atlanta’s CEO should not also serve on the PFP board; that board members receive training on proper non-profit governance standards; and that the non-profit should have an executive director to handle day-to-day operations.

‘Too little too late’

Experts in the Georgia Open Records Act told the AJC last month that the lack of a written report was highly unusual and appeared to be an attempt at concealing the investigation from the public.

A spokesman for Mayor Bottoms said the outside law firm hired to conduct the investigation still has not produced a full report. But the spokesman said Bottoms ordered a written executive summary after the AJC request “in the interest of transparency.”

“At the time of your open records request, there were no responsive documents,” mayoral spokesman Michael Smith said in an email to the AJC. “After that request, the Mayor ordered an Executive Summary … in the interest of transparency.”

Gerry Weber, an attorney and expert in constitutional and open records law, called the document released Thursday a “pinhole in the door of transparency, at best.”

“Yes, it’s a tiny, tiny bit more transparent than the complete darkness of an oral report,” Weber said. “For $100,000 in taxpayer money, I think the taxpayers should expect more than a three-page report. That is not transparency.”

Greg Lisby, a Georgia State University communications professor who wrote a book on Georgia’s open records laws, said the Bottoms’ administration shouldn’t get many points for retroactive transparency.

“It’s too little too late,” Lisby said. “They’re trying to give an illusion that they were doing the right thing in the right way. It’s kind of humorous.”

The briefness of the executive summary stands in contrast to a 90-page report that the AJC obtained earlier this month that contained a detailed analysis of the legality of year-end bonuses awarded by the Reed administration before he left office. That report, which was also commissioned by the Bottoms administration, found the bonuses violated the city charter and Georgia Constitution's gratuities clause.

The story so far

In April, an AJC and Channel 2 Action News investigation reported that the city covered airfare for former Mayor Kasim Reed and staffers on a trip to South Africa with $40,000 of taxpayer money donated to a dormant charity. The city ordered a review into the matter and a federal grand jury issued a subpoena seeking information about the charity. Mayor Keisha Lance Bottoms received an executive summary of the report’s findings this week.