The secret settlement terms former Atlanta Mayor Kasim Reed agreed to with Miguel Southwell, the airport chief he fired in 2016, disguised a $65,000 legal fee as a job placement expense for Southwell, The Atlanta Journal-Constitution has learned.
Last week, the AJC and Channel 2 Action News reported that the secret terms included a $147,000 payout to Southwell that came from undisclosed sources. Now the AJC and Channel 2 have learned that the $65,000 legal fee due Southwell’s attorneys were instead described as career counseling and a job relocation expense.
The City Council, relying on information from the Reed administration, knew nothing about the $147,000 payout, but unanimously approved an $85,516 settlement with Southwell in December 2016. One current and two former council members told the AJC they were led to believe that the money was intended to pay for health care premiums and to help Southwell in his employment transition.
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City Council President Felicia Moore, who was a council member when the vote was taken, said the council wanted Southwell to have health and employment benefits. But she said no one explained to her the money instead was to pay for legal fees.
“I think we were lied to, and we were not told the full truth about what the money we were approving was for,” she said. “And that’s just a breach of confidence of the council that is authorized something for them to tell us is one thing, but it was actually another.”
In a statement to the AJC and Channel 2 last week, Reed said called the matter a “manufactured controversy” and declined further comment.
The council vote ended a drama that had seen Reed and Southwell accuse each other of illegal acts and later disavow their respective claims after Southwell was terminated in May 2016. The controversy came to a boil when Southwell’s lawyers suggested in a letter after his firing that Reed wanted more control over city contracts at the airport.
Lee Parks, Southwell’s attorney, said in a statement that Reed and a lawyer for the city “dictated” how the secret terms of the settlement would be documented. Parks said his firm provided the city with an invoice for a $65,000 “flat fee” in a partner’s name — instead of identifying the law firm — at the city’s request.
The settlement agreement said the money was for “job placement, career counseling, relocation costs, and other professional fees and expenses associated with his transition to new employment.” An invoice to the city stated it was for “general career counseling; negotiation of certain consulting agreements and preparation of memoranda regarding same.”
Instead, the money paid for Southwell’s legal fees for settling a threatened whistleblower lawsuit.
“They did not want to issue the attorney fee check to me or the firm due to the fact I had frequently sued the city and they believed the payment would be perceived by the public as a settlement of a civil claim rather than a simple agreement on severance where they paid for our work helping Miguel move forward with his career,” Parks told the AJC and Channel 2 Action News. “So, the fee bill was sent under my partners name at their request.”
Another term of the agreement called for Southwell to be paid $20,516 for 14 months of health care premiums. That amount and the $65,000 flat fee comprised the $85,516 approved by council.
Former City Councilwoman Mary Norwood, who ran unsuccessfully for mayor last year, called the hidden purpose of the $65,000 part of a “pattern of corruption” in city government. She called on Mayor Keisha Lance Bottoms to denounce the behavior.
“Everyone who participated in this conspiracy and fraud must be held responsible and it is imperative that our Mayor denounce this action and those who participated in this scheme,” Norwood said in a statement. “Anything less is an abdication of ethical leadership.”
Bottoms, who also was a member of council when the settlement was approved, declined to answer questions about what the Reed administration told her about it.
She also passed on criticizing her predecessor’s handling of the situation. As for Norwood, Bottoms said: “We value the advice of all of Atlanta’s private citizens.”
In a statement,Bottoms touted her administration’s plan for an online portal to access city payments information and her appointment of a new procurement officer.
“Atlanta will take the lead nationally in fiscal and ethical accountability,” she said. “That is why we have gone above and beyond in cooperating with the federal probe of the previous Administration.”
Legal experts questioned by the AJC said the overall settlement and the manner in which the legal bill was concealed merits criminal investigation.
“It stinks to high heaven,” said J. Tom Morgan, a former DeKalb County district attorney and criminal defense lawyer. At the very least, two lawyers aided Reed “in playing a fast one” on the council, he said.
Morgan said he is not certain the acts were illegal. Prosecutors would have to prove a quid-pro-quo on the part of any outside groups that might have paid Southwell, Morgan said, or prove that the settlement was designed to obstruct justice.
Bret R. Williams, a former federal prosecutor in Atlanta and New York who is now in private practice, said council members have a right to feel “duped.”
Beyond the fact that the purpose of $65,000 in public funds appears to have been concealed, the overarching settlement also was not disclosed to council, he said.
“That obviously raises an immediate red flag. It’s deception and misdirection,” Williams said. “The folks on council thought they were voting on one thing, but they were voting on another.”
Clark Cunningham, a Georgia State University law professor, said if the legal invoice from Parks’ law partner was used to support the council’s approval of the $85,516 settlement, “then city funds may have been paid under false pretenses.”
The total value of the settlement, Parks said, was about $240,000 including a pension enhancement. Legal experts told the AJC a $65,000 legal fee for such work is not out of the ordinary.
Parks said the fee was “based on an agreed percentage of the total settlement.” Had the firm been paid based on an hourly rate, he said, the costs would have been much higher.
“The (former) Mayor and the City will have to speak to their motivations for their choices in how they chose to paper the settlement,” the statement said.