$700K in year-end bonuses, prizes handed out by Mayor Reed may have broken law

ATLANTA — A confidential city report says $700,000 in bonuses and party prizes handed out by former Atlanta Mayor Kasim Reed may have broken state law.

Channel 2 Action News and our investigative partners at The Atlanta Journal-Constitution and AJC.com first reported on the 140 or so bonuses Reed gave out and the firestorm of controversy that followed back in April.

Since then, current Mayor Keisha Lance Bottoms ordered her administration to hire an outside law firm to investigate.

[READ: Ex-mayor Kasim Reed doles out $500k in bonuses, gifts on way out]

We got a hold of the confidential report the city just got back, which raises a lot of red flags.

The report, obtained by Channel 2 investigative reporter Aaron Diamant and the AJC, concluded Reed broke state law when he authorized nearly $700,000 in controversial, taxpayer-funded bonuses and party prizes to members of his cabinet and select city staffers during his final days in office.

“They’re the top of the city. They should be behaving in a way that sets an example to everybody,” Caren Morrison, with the Georgia State College of Law, said. “They’re making all kinds of difficulties for themselves for no reason that I can see.”

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The report said while city code is ambiguous, Reed’s move violated the state’s “gratuities clause.”

“Municipalities cannot give donations or contributions to employees after the fact, after they’ve done their job,” said Sara Henderson, with Common Cause Georgia. “It’s a big deal because it doesn’t look ethical at all.”

[READ: Atlanta police chief gives back bonus she received from Reed in his final days]

Lawyers wrote in the report that interviews with Reed and several department heads “revealed contradictory and inconsistent facts, specifically regarding the idea to award them.”

The report found “no evidence that the awards were done in bad faith.”

Morrison thinks otherwise.

[READ: Year-end bonuses under Kasim Reed cost Atlanta taxpayers $811K]

“Disbursing hundreds of thousands of dollars as you’re on your way out the door just looks so bad,” she said.

In a statement to Channel 2 Action News, Reed said:

"Awards to employees for exceptional service, to retain organizational talent, and reward achievement of success are longstanding practices in the City of Atlanta, both in the private sector and public governance as it competes for the same, top-tier talent. The compensation that I awarded to deserving members of executive leadership during my Administration were entirely consistent with historical practices at the City of Atlanta.  In fact, the Report acknowledges that since 2008 more than 500 bonuses of this kind have been distributed. Therefore, I understood these bonuses were allowable under City Code and Georgia law by the executive branch prior to and throughout my Administration. 

[READ: City to open investigation into bonuses, party prizes by former Atlanta mayor]

"The report establishes that no provisions of City Code nor any laws of the State of Georgia were intentionally violated, nor were any of these awards made in bad faith.  Quite the contrary, the Report makes it clear that I consulted with and relied upon the advice of various City personnel who universally understood the awards I was then considering to be: i) a long-established custom at the City of Atlanta; ii) allowed and authorized by law, a conclusion that is all the more reasonable with an informed appreciation of the City’s historical practices; and iii) importantly, falling within the authority vested in the discretion of the Office of the Mayor.  The sincerity and legitimacy of my understanding that the awards were proper is only underscored by the Report, which does not undermine my belief that, at the time that I authorized the awards and continuing to this day, my actions were correct and appropriate.  

"Although the Report made findings about whether the amounts awarded comported with City Code, the City’s Charter, and other Georgia law, those conclusions are debatable, a matter of opinion, and represent but a singular viewpoint.  Even then, the Report’s determinations are not definitive or conclusive, which is clear from its continuous use of probabilities, likelihoods, and other non-committal phrasing to characterize its conclusions.  It is critical to note that, under the Report’s reasoning and within its explicit findings, similar awards made by members of the Atlanta City Council are also viewed as violating the State’s Gratuities Clause. Although I cannot agree with the Report in its entirety, I do support revisions to the City Code to resolve the “ambiguities” and “vague…language” that led to the reasonable differences in opinion on which I relied. 

"At the end of my term, the City of Atlanta was on its best financial footing in 40 years. Atlantans benefited from eight consecutive balanced budgets, zero property tax increases, zero water rate increases, nine consecutive credit-rating increases, more than $200 million in cash reserves and a 37 percent reduction in crime. As a result, I awarded performance bonuses to members of my executive team - who all played a significant role in contributing to this record of achievement."

“If it’s $25 or $2 million, it doesn’t matter. It’s still taxpayer money. They should be mindful of that,” Henderson said.

The report also said about $55,000 in bonuses City Council members handed out to staffers last year broke the same state law.

In a statement Tuesday afternoon, Bottoms said:

"I appreciate the detailed analysis in the report, and look forward to discussing with members of the City Council additional steps that we can take to make sure that any future bonus payments are fully compliant with all provisions of the law."

Cox Media Group