Atlanta taxpayers could pay nearly $100,000 to investigate $40,000 payment

ATLANTA — Channel 2 Action News and our investigative partners at The Atlanta Journal-Constitution and AJC.com have confirmed Atlanta taxpayers could shell out nearly $100,000 for lawyers to investigate $40,000 in luxury airfare for former Mayor Kasim Reed and other city staffers.

The investigation is fallout from a controversial 2017 trip to South Africa.

Reed and seven city staffers flew up front. Reed caught flack for the trip’s $90,000 price tag and promised to find nongovernmental funds to pay the $40,000 difference between coach and business-class airfare.

In April of this year, the AJC and Channel 2 reported that Partners for Prosperity, a charity formed by Invest Atlanta in 2015 to help create jobs and promote affordable housing, covered the airfare difference. It was the first check the charity ever wrote.

But the money originated from the city.

In December, City Council approved a $40,000 donation to the charity upon the recommendation of Reed’s office from an account that held salary Reed had deferred. But the Reed administration didn’t inform council that the money would be used to pay for airfare he promised would be covered by private sources.

Earlier this year, the Invest Atlanta board, chaired by Mayor Keisha Lance Bottoms, approved an investigation into the purchase and the role of Invest Atlanta CEO Dr. Eloisa Klementich.

“I think for all of us to have confidence in how that transaction took place, I think it’s important that we get an independent set of eyes and feedback,” Bottoms said in April.

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Her administration initially hired high-powered Washington, D.C., law firm Sidley Austin to review the costs, but fired the firm back in May over sky-high hourly rates.

An invoice shows that the firm charged nearly $60,000 for just two weeks of work investigating Klementich’s role in covering the $40,000.

“It’s sort of like a toxic environmental hazard, right? You’re going to spend more to clean it up that what you initially spent to make the mess,” said Jessica Cino of Georgia State University Law School.

The invoice showed Sidley Austin charged $875 an hour for a partner and $590 an hour for an associate.

“You better have one the most notable attorneys in the country on that case,” Cino said.

Last week, the administration brought in a local firm, Cobb County-based McFadden Davis, to pick up the investigation.

McFadden Davis will charge just $350 an hour for partners with total fees capped at $40,000.

“It appears the city sort of realized its mistake, but realized its mistake late in the game,” Cino said.

In a statement, a spokesperson told Channel 2’s Aaron Diamant that the city is looking forward to the results of the review and that the new lawyers won’t have to start from scratch

Meantime, a federal grand jury has already subpoenaed records of the South Africa deal as part of the feds' ongoing City Hall corruption probe.

Cox Media Group