Unconstitutional bonuses

Reed’s final act in office was a parting gift to selected members of his staff — and an $800,000 bill to taxpayers.

On Dec. 29, 2017, four days before the mayor left office, CFO Beard signed off on checks for bonuses to members of Reed’s executive team and police officers on his protection unit. For rank and file employees, Beard approved checks to winners of raffles, ugly sweater, lip sync and door decorating contests held at two holiday parties.

The cash giveaways were stunning public expenditures in which the amounts were increased so taxpayers — not the individual employees — paid the taxes.

Atlanta City Council President Felicia Moore called it unconscionable, while Reed justified his decision by again saying the city was in great financial shape and his employees helped make that possible.

“It just reminded me of someone having money and throwing it in the air and letting everybody catch it,” Moore told the AJC in April.

Reed later told lawyers investigating the legality of the bonuses that he assumed Human Resources Commissioner Yvonne Yancy asked Robert Godfrey, the city’s expert in employment law, if the bonuses were legal. She never did. Instead, Yancy relied on a five-year-old memo, written by an attorney who was a member of her Human Resources staff, that incorrectly stated the mayor’s office had complete jurisdiction on all matters of compensation.

And so the bonuses marched forward. Five of Reed’s top cabinet officials, including Beard and Yancy, each received $21,000 checks — enough to cover taxes on $15,000 bonuses.

Thirty-seven others got bonuses of either $10,000 or $5,000, which after taxes cost the public a combined $459,000.

The details of how to make the transactions work were left to Beard. It was handled sloppily, with off-cycle payroll checks being hurriedly cut before the end of the year. A few people received duplicate checks, which were eventually returned.

Yancy also decided some of her staff deserved cash gifts. She left city employment a few days after personally handing out 11 checks at a combined cost of $84,000. The holiday party prizes added another $55,000 to the tab. Other prizes, like iPods and Falcons tickets, were given away in the raffles and are not included in that cost.

Several cabinet members gave back their bonus money after it all became public. About $89,000 was eventually returned.

Separate investigations — one by an outside law firm, the other by the city’s auditor and chief ethics officer — were launched after stories by the AJC and Channel 2. Both investigations found the bonuses and prizes violated city ordinances and the Georgia gratuities law, which says governments must receive “substantial” benefit from public expenditures.

The city’s internal investigation said the contest prizes “were inappropriate and raised ethical concerns.” It also found that Beard abused his authority as CFO by issuing himself a bonus check.

Yancy engaged Godfrey — the compensation lawyer — with text messages the same day that the AJC published a story about the bonuses.

“Am I correct that it’s not illegal?” Yancy asked.

“Not illegal but in conflict with the gratuities clause of the Georgia Constitution,” he responded.

Former Atlanta Mayor Kasim Reed reimbursed the city $12,000 with six checks on March 9.