Federal prosecutors previously requested Reed's credit card records in April, just days after the AJC and Channel 2 reported on Reed using his taxpayer-backed card to maintain a high-flying lifestyle of business-class airfare, top-shelf hotel stays, chauffeured luxury car service, and expensive restaurant tabs.
Reed did not respond to questions submitted by the AJC to his spokesman Monday morning. The former mayor repaid the city $12,000 from his personal bank account for charges made on his city-issued credit card, just days before the spending statements were released to the AJC in March.
Then-Atlanta Mayor Kasim Reed smiles as people gathered in the atrium of City Hall to celebrate his final workday as mayor of Atlanta, Friday, December 29, 2017. ALYSSA POINTER/ALYSSA.POINTER@AJC.COM
Caren Morrison, a law professor at Georgia State University who is a former federal prosecutor in the Eastern District of New York, said the three-year investigation has been building toward this subpoena.
“It’s what we thought: It’s been looking like this investigation has been getting closer and closer to the mayor, and here we have it,” Morrison said. “They obviously have reason to believe that there has been corruption going on all the way up to the top.”
Mayor Keisha Lance Bottoms is not mentioned in the subpoena and her office did not issue a statement about it.
RELATED CONTENT: SUBPOENAS
· Atlanta bribery probe: When has the city received federal subpoenas?
· Failure to release subpoena may have broken Georgia records law
· Reed withheld subpoena aimed at airport in Atlanta bribery probe
This most recent subpoena is the tenth delivered to Atlanta City Hall and the second to name Reed.
A subpoena last month, meanwhile, asked for all requested leave, approved leave and payouts for unused leave to members of Reed’s cabinet.
Two members of the cabinet — Chief Procurement Officer Adam Smith and Deputy Chief of Staff Katrina Taylor-Parks — have pleaded guilty to conspiracy to commit bribery and have agreed to cooperate with the investigation.
Rev. Mitzi Bickers, who played a key role in voter outreach during Reed's first run for mayor in 2009, and who supervised his Human Services Department for three years, has been indicted on 11 counts including bribery and money laundering charges. She has pleaded not guilty to all counts.
U.S. Attorney Byung J. “BJay” Pak, center, addresses the media earlier this month after former Kasim Reed aide Katrina Taylor-Parks became the second high-ranking Atlanta official to plead guilty in the federal corruption investigation of City Hall. BOB ANDRES /BANDRES@AJC.COM
‘An army of accountants’
Reed and members of his cabinet charged more than $1.9 million on their city-issued credit cards during his last three years in office.
While it’s unclear if the subpoena applies to all members of Reed’s cabinet, it will capture spending by Chief of Staff Candace Byrd, chief operating officers Dan Gordon and Michael Geisler and the nine officers assigned to Reed’s protection unit.
An AJC analysis of Byrd’s credit card spending from 2015-17 shows that she spent more than $143,000 on airfare, $95,000 on hotels and $29,467 on food. She also charged more than $16,000 for retail purchases from stores like Pier 1 Imports, Macy’s, Crate & Barrel, Amazon, The Container Store and Bed, Bath and Beyond. It is unclear if there are receipts, or justifications for the official city benefit of those purchases.
In all, Byrd spent more than $360,000 on her card during Reed’s final three years.
RELATED CONTENT: EXPENSES
A review of the chief operating officers’ statements show they routinely purchased airfare and hotel reservations for other staff members on their cards, and the men combined to spend $126,298 on catering during Reed’s last three years in office, or about $42,000 per year.
The AJC previously reported that Reed and three members of his protection unit bought expensive airfare to Las Vegas last year, the day before the marque boxing match between Conor McGregor and Floyd Mayweather.
One of the bodyguards used his credit card inside T-Mobile Arena on the day of the fight, and video shows Reed and a group of people walking through a Fox Sports live shot in what appears to be a backstage area of the arena.
The AJC also found officers routinely used their cards to pick up dry cleaning and fast food meals for the mayor.
Atlanta City Councilman Howard Shook, who chairs the council’s finance/executive committee, said the subpoena suggests federal agents are taking a wider view at city credit card spending and Reed’s schedule, including “his whereabouts every day” during eight years in office.
“They’re going to need an army of accountants to work through what will be hundreds of thousands of pages of documents,” Shook said.
And they may have just that. During an Aug. 15 press conference, Chris Hacker, special agent in charge of the FBI’s Atlanta field office, said they were adding agents to the investigation, including forensic accountants.
Invest Atlanta CEO Eloisa Klementich. (INVEST ATLANTA)
More p-card misuse
In addition to p-card and travel records and the former mayor’s daily itineraries, prosecutors are seeking all records related to the city’s investigation into Partners for Prosperity, a nonprofit tied to the city in its role as a fund-raising organization for Invest Atlanta.
Partners for Prosperity was involved in a complicated transaction that saw taxpayer money donated to the charity, which then donated the money back to the city to pay part of the cost of luxury airfare for a trip last year by Reed and several staffers to South Africa.
The latest subpoena is the second seeking records related to the charity.
In July, a law firm hired by the city to examine the transaction found no illegal behavior. The investigation faulted the actions of Invest Atlanta CEO Eloisa Klementich, who was an officer and board member of the charity, for violating rules of the nonprofit.
The Invest Atlanta board voted in July to strip Klementich of her employment contract, but Bottoms retained her as the agency's CEO as an "at-will" employee.
The AJC and Channel 2 used the Georgia Open Records Act to request copies of the investigative report, but Bottoms’ office said it was delivered to the Invest Atlanta board orally, and no documents existed.
On Wednesday night, Bottoms' office released a three-page executive summary of the probe— for the first time committing any aspect of the investigation to writing. It was the same day the city received the latest subpoena.
RELATED CONTENT: BONUSES
U.S. Attorney Byung J. “BJay” Pak seemed to take a swipe at that decision during that Aug. 15 press conference, when he said to a throng of media that his investigation “will be bringing to you not a verbal report but instead grand jury indictments.”
Pak also warned corrupt City Hall officials: “The question is not if, but when we’re coming.”
Questionable p-card purchases did not end in the Reed administration, the AJC and Channel 2 Action News has found.
A former city official’s city-issued credit card was used to purchase airfare for Mayor Keisha Lance Bottoms’ husband to attend the 2018 Super Bowl in Minneapolis. Bottoms refunded the cost of the ticket after discovering the improper charge. ALYSSA POINTER/ALYSSA.POINTER@AJC.COM
Early in the Bottoms’ administration, chief operating officer Gordon used his city-issued credit card to purchase first-class airfare for Bottoms’ husband to attend the Super Bowl in Minneapolis. Bottoms said the card was used inadvertently and that she repaid the money within 10 days.
An AJC review of her statements also found that she twice used her city-issued card to pay for dry cleaning.
Last week, Bottoms introduced legislation that would significantly overhaul the city’s credit card policy. The proposed policy says that anyone who misuses a city-issued card must pay back the charges, and may be subject to discipline including termination.
It prohibits, among a litany of other things, the purchase of airline tickets for family members and personal dry cleaning charges.
What the feds want to know
A federal subpoena in the Atlanta City Hall corruption investigation was delivered last week and asks for the following information:
1. From Dec. 1, 2017 to Aug. 20, 2018, all internal and external audit-investigative reports related to or associated with payments between the City of Atlanta and Partnership for Prosperity.
2. From Jan. 1, 2010 to Dec. 31, 2017, all daily calendar information (regardless of form) for Kasim Reed and all employees of the Office of the Mayor.
3. From Jan. 1, 2010 to Dec. 31, 2017, all travel and travel justification records for Kasim Reed and all employees of the Office of the Mayor.
4. From Jan. 1, 2010 to Dec. 31, 2017, all records related to or associated with the City of Atlanta Purchasing Cards for all employees/members of the Office of the Mayor and the Executive Protection Unit.