Watchdogs: Atlanta skirting records law in probe of $40,000 payment

Mayor Keisha Lance Bottoms talks to the crowd during her first State of the City speech in Atlanta on Wednesday, May 2, 2018. STEVE SCHAEFER / SPECIAL TO THE AJC

Mayor Keisha Lance Bottoms talks to the crowd during her first State of the City speech in Atlanta on Wednesday, May 2, 2018. STEVE SCHAEFER / SPECIAL TO THE AJC

A metro Atlanta law firm, hired to look into a $40,000 payment for luxury airfare for former Mayor Kasim Reed and staff members, reported its findings to the city's current administration verbally instead of in writing, a maneuver government watchdogs say is an attempt to circumvent the state's mandates on open records.

Invest Atlanta CEO Eloisa Klementich was reprimanded by the agency's board earlier this month, based on findings by the law firm. But, when The Atlanta Journal-Constitution and Channel 2 Action News requested a copy of the report, Mayor Keisha Lance Bottoms' office said the board was briefed "orally," and "no responsive documents" were available.

The city’s acceptance of a verbal report over a written one prevents the public from vetting whether the probe was thorough, fair and impartial, said Gerry Weber, an Atlanta attorney specializing in constitutional and media law. It’s a questionable maneuver as the GBI conducts a criminal investigation into City Hall’s open records practices, experts say.

Bottoms’ administration hired the firm McFadden Davis to review the airfare payment.

The controversy has its origins in spring 2017 when Reed took nine employees to South Africa to learn about film-making, urban agriculture and to recruit jobs. Most flew business class.

Reed caught flak for the trip’s overall $90,000 price tag and promised to find nongovernmental funds to pay the $40,000 difference between coach and business-class airfare.

Partners for Prosperity, a dormant charity affiliated with Invest Atlanta, ended up donating the money to the city. Invest Atlanta is the city’s economic development agency. Klementich serves as an officer of Partners for Prosperity and is a charity board member.

Partners for Prosperity, a nonprofit formed by Invest Atlanta to help promote affordable housing, job creation and economic development, cut this $40,000 check to the city of Atlanta in March to defray the cost of business-class travel for former Mayor Kasim Reed and some of his entourage for a spring 2017 trip to South Africa. In December, the city had given the nonprofit $40,000 in taxpayer money from Reed’s unclaimed salary.

icon to expand image

A report in April by the AJC and Channel 2 found that the money used to pay for the airfare was donated to Partners for Prosperity by the city.

City Council approved a $40,000 donation to the charity in December on the recommendation of Reed’s office. The funds came from an account that held money from a raise Reed had deferred.

But council wasn’t informed that the money would be used to pay the airfare Reed had promised would be covered by private sources.

On Dec. 29, days before he left office, Reed approved a new contract for Klementich. The same day, the city sent $40,000 to the charity.

This past March, then-city chief financial officer Jim Beard sent a city invoice from his personal email address to Klementich’s seeking $40,000 from the nonprofit. Days later, Klementich signed a check for $40,000, but Partners for Prosperity’s board didn’t formally approve the payment until early April, board minutes showed.

So far, the city has authorized at least $100,000 on the probe. A federal grand jury is also investigating the matter, heightening the public interest.

It’s unlikely the law firm presented its findings to the Invest Atlanta board without notes or a presentation, Weber said.

Weber said the investigative report is a public record and that supporting material that’s not subject to attorney-client privilege also should be released.

“The citizen should expect, if $100,000 was spent, they should be able to explore whether the money was well spent and whether the results were correct,” he said. “Especially when it’s an investigation of criminal wrongdoing.”

On July 19, the Invest Atlanta board authorized Bottoms to strip Klementich of her contract after it heard the verbal report by McFadden Davis. The move cost Klementich the protection of a potential $618,000 contract buyout, but she kept her job as an “at-will” employee.

Bottoms’ office has said the review found no criminal violations and faulted Klementich for lack of adherence to unspecified board governance standards of the charity.

In a statement, Bottoms’ spokesman, Michael Smith said no written report exists. The verbal report was provided during a lengthy executive session that was closed to the public.

“After the report was given, there was consensus among the IA Board that enough information had been provided to make a decision and a written report was not necessary,” Smith said.

Invest Atlanta CEO Eloisa Klementich. (INVEST ATLANTA)

icon to expand image

Greg Lisby, a Georgia State University communications professor who wrote a book on Georgia’s open records laws, said the city’s stance violates the spirit, if not the letter, of the law.

As a result, the public can’t assess whether the action taken against Klementich was just, he said.

“This does not actually exonerate somebody. It does not condemn somebody,” Lisby said.

The city initially retained international law firm Sidley Austin to conduct the probe. The firm billed nearly $60,000 for work performed from May 4 to May 16, and the probe stalled over the high cost of legal fees.

McFadden Davis was authorized to bill up to $40,000 when it was retained in late June.

In a “notice of new matter” that served to hire McFadden Davis, the firm’s work was to provide “initial analysis of the matter and other milestones as determined by the City Attorney.”

Cathy Woolard, a former City Council president who ran for mayor last year, said the council should demand answers about the investigation, saying it is “problematic ethically” for the city not to issue a thorough report.

“If I were on the council, I would just start asking for everything,” she said.

Former Atlanta Mayor Kasim Reed speaks at Atlanta Press Club’s Newsmaker Luncheon on Tuesday, February 28, 2017. HYOSUB SHIN / HSHIN@AJC.COM

icon to expand image

In March, the GBI opened a criminal investigation into open records practices under Reed after the AJC and Channel 2 reported on efforts by Reed's communications and law departments to curtail access to public documents.

The AJC and Channel 2 in April filed a complaint with Georgia Attorney General Chris Carr's office seeking mediation and documenting a "culture of political interference" in the city's production of documents.

Bottoms has vowed to improve transparency in a city government. She previously announced an online portal for the public to search for city expenditures, and she’s proposed a chief transparency officer to help ensure compliance with state sunshine laws.

Vincent Fort, a former state senator from Atlanta who ran for mayor in 2017 against Bottoms, said the city’s failure to release a written report suggests there is something to hide.

“It’s a shocking lack of transparency,” Fort said. “To say there’s no report, it was all done verbally, that’s shocking. It really is. In this instance we ought to be rebuilding the people’s confidence in City Hall. This does not contribute to that rebuilding.”

Our reporting

An AJC and Channel 2 investigation uncovered an usual transaction in which the city donated $40,000 to a dormant charity that donated the money back to the city to pay for business class airfare for former Mayor Kasim Reed and several staffers who visited South Africa last year. 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’ office said a report on the matter found no criminal wrongdoing, but City Hall said no written report exists to release to the public. Watchdogs say that circumvents the state’s sunshine laws.