Ex-purchasing chief pleads guilty in Atlanta City Hall bribery probe

8:11 p.m Tuesday, Sept. 26, 2017 Local
Hyosub Shin/The Atlanta Journal-Constitution
September 26, 2017 Atlanta - Former chief purchasing officer Adam Smith leaves the federal courthouse after his hearing on Tuesday, September 26, 2017. Federal prosecutors charged the first high-ranking former city official in the long-simmering Atlanta City Hall bribery investigation Tuesday in a move that escalates the probe. Adam Smith, who used to run purchasing for the city, has been charged with conspiracy. HYOSUB SHIN / HSHIN@AJC.COM

The federal bribery investigation officially entered the upper rungs of Atlanta City Hall on Tuesday when the city’s former top purchasing officer pleaded guilty to taking more than $30,000 in bribes to help a vendor win contracts.

Former procurement director Adam Smith’s guilty plea is the first by a high-ranking official in city government — in this case a former cabinet member for Mayor Kasim Reed. Smith’s deal with prosecutors and pledge to cooperate with the U.S. Attorney’s Office signals the feds continue to build a case that appears to have no end in sight.

So far two contractors have pleaded guilty in the case. A former city worker was indicted last month with an act of vandalism investigators say was part of a conspiracy to intimidate one of those contractors from cooperating with the investigation.

U.S. Attorney John Horn and Assistant U.S. Attorneys Jeff Davis and Kurt Erskine were tight-lipped with details about Smith, but in statements during and after Tuesday’s hearing, prosecutors hinted at a much deeper investigation than previously known.

Horn said Smith would meet regularly with an unnamed vendor — described only as an executive of an Atlanta construction company — at local restaurants from at least 2015 to January 2017 to discuss “upcoming and ongoing” procurement and construction projects, “as well as about bids and solicitations.” At these meetings, Smith would feed information to the vendor, including information about bids made by other firms.

Smith and the vendor would usually then go into the bathroom where the vendor would pay the procurement chief $1,000 bribes in cash.

Prosecutors said when the vendor or an associated joint venture won a bid for city work, Smith submitted the award for final authorization to the City Council and mayor without disclosing his ongoing financial ties to the vendor. Smith also did not disclose his financial relationship to the vendor in city ethics filings, nor did the vendor disclose its ties to Smith when bidding on city work.

The procurement chief manages a department that awards hundreds of millions of dollars in contracts for the city each year that touch virtually every aspect of operations, from routine sidewalk repair to new runways at Hartsfield-Jackson International Airport.

Prosecutors did not describe the types of work the vendor won from the city, but said the bribes led to millions of dollars in city contracts.

Horn called the scheme “a fundamental breakdown” of the city’s purchasing program that defrauded taxpayers.

Smith’s duties and obligations to the public trust, Horn said, “were sold for thousand-dollar payments in restaurant bathrooms.”

Smith’s defense attorney, Brian Steel, called the plea hearing “a horrible day and horrible time in Mr. Smith’s life.”

“However, this misconduct is a total aberration, and I firmly believe Mr. Smith will continue to do great things in his life and this criminal conduct will not define him,” Steel said.

The probe burst into public view in January when longtime Atlanta contractor Elvin “E.R.” Mitchell Jr. was charged and pleaded guilty to a conspiracy from 2010 to August 2015 to pay more than $1 million in bribes to a person under the belief that some of that money would go to one or more person with influence over the contracting process.

A second contractor, Charles P. Richards Jr., also pleaded guilty in the case in February.

Horn declined to name the vendor who paid Smith and would not say whether it was Mitchell or someone else. But the timeframe of the bribes paid to Smith, 2015 to January 2017, does not completely align with bribes Mitchell and Richards admitting to paying from 2010 to August 2015.

Experts said prosecutors clearly have others — both in city government and the contracting world — in their crosshairs.

Smith’s guilty plea is “exactly the result that the government wanted to achieve back when Mitchell’s plea and cooperation became public,” said Joshua Lowther, an Atlanta criminal defense lawyer.

The government, Lowther said, wants other unnamed co-conspirators to realize they need to cut a deal.

“Another high-profile defendant with a significant basis of knowledge is divulging everything that he knows, and the other conspirators need to get on Team USA before there’s no material information unknown to the government with which they can bargain,” Lowther said.

Davis, one of the prosecutors, described Smith as having provided “substantial cooperation” so far.

Smith, procurement director from 2003 to last February, was fired from his job on the same day federal agents entered his office with a subpoena seeking his work-issued computer, smartphone, city emails and other materials.

The February subpoena also sought conflict-of-interest disclosures by Smith, along with all forms he provided to the city council related to contracts of $1 million or more since Jan. 1, 2014, certifying the companies had properly disclosed their relationships to city officials and that the contract awards were “appropriate” under city purchasing rules.

City ethics rules require contractors to reveal personal and financial relationships with public officials, and their families.

On paper, Smith seems an unlikely sort to be involved in pay-to-play scandal: A Morehouse Man, who holds a master’s in public health and a law degree from top universities who was once a partner at powerhouse law firm Holland & Knight.

Smith had a city salary of more than $200,000 a year.

In a statement, Reed’s office said it does not comment on personnel matters, but reiterated that the city “has been working in full cooperation with federal authorities for more than a year — since August 2016 — and assisting them remains our top priority.”

The bribery scandal has clouded Reed’s final year in office, a year Reed has spent polishing his legacy as a job creator and fiscal steward. Reed has denied any wrongdoing.

In response to a reporter’s question at a recent press conference, Reed said he could not speak to whether current or former members of his administration could be caught in the feds’ dragnet.

“What I am certain about is that it’s not going to lead to me,” he said.

Candidates running to succeed the term-limited Reed — particularly the ones not currently aligned with the administration or Atlanta City Council — were quick to pounce on the news as a sign of a corrupt city government in need of house cleaning.

“It’s a real tragedy for the city of Atlanta and there is more to come,” said Cathy Woolard, a former Atlanta City Council president and mayoral candidate.

Felicia Moore, a councilwoman running for the council presidency, said she was disappointed to learn of Smith’s criminal acts and said it “highlights the ongoing need at City Hall for more steps towards transparency and accountability.”

The AJC previously reported Mitchell and a company he controlled were paid $7.3 million for snow removal work for winter storms in 2011 and 2014. Mitchell also was a joint venture partner in lucrative sidewalk work with Richards.

Another former city official, the Rev. Mitzi Bickers, also has come under federal scrutiny, with prosecutors seeking records from her during her time at City Hall and in her current role as a chaplain in Clayton County for Sheriff Victor Hill.

Bickers also is a well-connected political consultant who worked many local political campaigns including a key get-out-the-vote effort for Reed in his first run for mayor in 2009. Bickers has not been charged.

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