On Tuesday, it was Larry Scott’s turn to roll in the sad barrel of shame at the Richard B. Russell federal courthouse.
The act has been well-honed over the past three years during the Atlanta corruption probe: Former city officials plead guilty and hang their heads with a look of contrition before Judge Steve Jones, who always seems perplexed and a bit annoyed over why someone in a position of public trust would throw it away for filthy lucre.
Scott, the city’s former director of contract compliance, will serve two years in the federal pokey for not disclosing to the city a profound conflict of interest and for lying on his income taxes for six years.
The case also casts light on the ugly inner workings of how business gets done in Atlanta.
Scott, a City Hall veteran, was in a job established, according to the city, “to mitigate the effects of past and present discrimination against women and minority businesses” by “linking small, minority, female and disadvantaged businesses with City of Atlanta business opportunities.”
That is, he helps companies run by folks who’ve been historically left out and pushed aside.
But at the same time (2012 to 2017), Scott also served as business manager of Cornerstone U.S. Management, a firm that hooked up those same people with the city — which was also him.
Cornerstone was run by former Mayor Kasim Reed’s brother Tracy. It appeared to be a comfy arrangement, albeit audacious and utterly putrid. (Note: I was going to say it was a classic “fox guarding the hen house arrangement,” but I used that imagery two years ago when Adam Smith, the city’s procurement director, was sentenced for taking bribes.)
It is a testament to the ingenuity and ambitious industriousness of our city that those in charge of making sure commerce gets accomplished are so capable of setting up “business opportunities.”
Let me pause to restate the egregiousness of Scott’s arrangement: His day job was to vet “disadvantaged” companies so they could work with the city. And at the same time he worked for a private firm — one run by the then-mayor’s brother — that helped guide such companies through the maze of city and federal regulations.
Last fall, when Scott pleaded guilty, people wondered whether he, in his dual role, helped preferred companies get inside information to help craft winning bids. Well, nothing like that came out during Tuesday’s sentencing. Federal prosecutors are like poker players in conservative suits.
Scott, until now, has shown an exemplary life. Born to a low-income family, Scott graduated from Georgia State University and had a solid work record. But he was laid off in 2002, so he turned to a fraternity brother, Tracy Reed, who helped him get on with the city.
A decade later, Tracy was himself out of a job for apparently using his clout to get out of traffic stops and for driving a city vehicle with a suspended license. Tracy, who (surprise!) had worked as a supervisor in the city’s Office of Contract Compliance, prevailed on Scott to set up his new venture — Cornerstone — and then stay on with the firm. Scott made $220,000 of unreported income over the next five-plus years.
“At the time, my friend had no income,” Scott told the judge. “I knew how it felt to have no income. … I had no nefarious intent. I simply wanted to help a friend.”
Scott did not report his newfound income to the IRS or his side job to the city, as required by law, because he knew how rotten a situation he had entered. Rotten, but lucrative.
It is an interesting postscript that Scott backed away from Cornerstone and Tracy Reed folded it in 2017 after it was widely known that the feds were crawling around looking at contracts.
I left a message with Tracy Reed, but I have not heard from him.
Assistant U.S. Attorney Jeff Davis told the judge that Scott’s actions “shattered the very delicate trust between the city of Atlanta and its citizens” and “called into question the integrity of the program.”
Scott’s attorney, Stephen Murrin, called his client’s crimes “mistakes” and examples of “the frailty of man.” Had there been no widespread corruption probe, Murrin said, Scott’s acts would have faded away unnoticed. In essence, he is collateral damage.
Murrin said his client was not involved in Cornerstone’s day-to-day operations and acted merely as its bookkeeper.
Murrin noted that Scott was not accorded a downgrade in his sentence by the feds for “substantial assistance.” That, he said, is because his guy knows nothing.
“It’s not sexy; there is no pay-to-play scheme,” the lawyer told the media outside the courthouse. “Larry implicates no one. He has no knowledge or information regarding the administration of Kasim Reed or anyone in that office.”
Later, he added, “he is not cooperating against anyone in this case. He won’t be back in court (to testify against anyone). You will not hear of him again. He will fade back into life with his family after serving his sentence, and that will be the end of news coverage of Mr. Scott.”
I talked with lawyer Lee Parks, who has sued the city several times over how contracts are bid, and who represented Miguel Southwell, the airport’s former general manager who was fired by Kasim Reed in 2016.
Parks noted that “Southwell had to interview with Tracy” before he was hired. “They called it a meeting,” he added.
Parks has also told city investigators that Tracy Reed met with a job candidate for another high-ranking airport position. That prospect, Cortez Carter, was later fired because his wife had ties to a concessionaire.
Hartsfield-Jackson International Airport may be a very busy place, but it can feel cozy.
A spokesman for Kasim Reed has previously told the AJC that Tracy Reed wasn’t involved in the vetting process of future employees.
Parks said that Scott’s sentence is “another peeling of the onion.” He said that it’s outrageous that the brother of a mayor can have a firm shepherding companies to get business with the city.
“But that kind of thing has gone on a long time,” he said, “and I don’t think people appreciate how wrong it is because of how blatant it has been.”
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