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City likely won’t go after $83K inspector general says former mayor owes Atlanta, sources say

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Channel 2 Action News has learned that Atlanta Mayor Andre Dickens is not likely to authorize city lawyers to go after more than $83,000 in disputed spending by former Mayor Kasim Reed’s administration, but it is not clear whether the city has provided the new findings about the money to federal or state prosecutors.

Channel 2 investigative reporter Richard Belcher learned a decision not to go to court means Dickens is rejecting one of the options recommended by the city’s inspector general who investigated the spending and concluded that Reed’s administration misled both the City Council and the public.

A well-placed source told Belcher that going to court is not likely -- in part because so much time has passed and because of the ongoing federal criminal investigation that began while Reed was in office.

Reed argues he could spend as he wished because money was from a big pay raise he declined.

The IG confirms that Reed didn’t receive the pay raise to which he was entitled starting in his second term in 2014, but her report disputes that the money was actually set aside as Reed claimed.

The spending included: $25,000 for personal health insurance (COBRA) after Reed left office, $40,000 for luxury airfare while he was still in office and $18,000 for Reed’s alma mater Howard University.

Facing critical reports about the airfare from Channel 2 Action News, the Atlanta Journal-Constitution and other news organizations in 2017, the city sent money to its development authority to cover the cost and initially disguised that the source of the $40,000 was taxpayer money.

City of Atlanta Inspector General Shannon Manigault concluded the city never set up a separate account for Reed’s declined pay raise and that Reed and his staff mislead the council and public.

One option she recommended is for the city to try to recapture the money. Another is to give Reed a W-2 and treat all the pay raise as actual income.

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Channel 2 Action News has learned the current mayor is not likely to approve that legal move.

One city hall source told Belcher that the primary concerns are the over five years that have elapsed since the spending and the ongoing federal investigation which includes a grand jury subpoena related to the $40,000 in airfare.

“The idea that it’s a civil matter where the city would sue to try to get the money back, I think is not the right thing to do. The right thing to do is to treat this as a serious crime or at least evidence of a serious crime,” said Clark Cunningham, a professor at GSU College of Law.

He recommends the city turn over IG’s findings to federal authorities and the Fulton County DA.

About the 5-year time gap, Cunningham said critical facts about the money were not known until the latest investigation.

“That’s the first indication that it was all a sham, that there was no such account. It was not coming from his deferred salary. So if it was hidden for five years, there shouldn’t be a statute of limitations problem in my opinion,” Cunningham said.

A spokesperson for Dickens declined to comment when asked if the city has sent the IG’s report to federal or state prosecutors.

A spokeswoman for Reed emailed Belcher a statement saying:

“Rather than focusing on the record-breaking rate of murders and violent crime in our city, WSB continues to attack Mayor Reed.”

The email repeats Reed’s argument that the spending was covered by his forfeited pay raise.

Reed’s spokesperson declined to say whether the city has given or offered to give Reed a W-2 form, so he can receive all of the disputed raise and pay taxes on the money.

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