In 2016, Atlanta’s chief financial officer used his city-issued credit card to book three international business-class flights at a cost of $27,770. One of those trips was to Barcelona, where CFO Jim Beard also swiped his card for $3,800 on hotel rooms and $1,040 in restaurants.
Taxpayers picked up a $2,000 restaurant tab from Beard’s card in Singapore that year, without any explanation of who was there or what was discussed. And city residents paid two-thirds of a $12,000 bill for dinner and drinks at Buckhead’s American Cut restaurant in December 2017, when Beard used his card to throw a farewell party described as a cabinet meeting for Mayor Kasim Reed and about 30 of his top advisers.
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Each of those charges appear to violate city policies for travel or credit card use at the time — which said airfare “shall be” purchased at the most economical rate; restaurant expenses require a receipt and explanation for the business purpose; and the cards can’t be used to purchase alcohol or any other personal items.
Yet there is no evidence in documents obtained by The Atlanta Journal-Constitution that show anyone questioned those purchases, or others — like the $10,000 Paris hotel bill that Beard repaid in April, a year after the charge and after the AJC and Channel 2 Action News obtained his credit card statements. Beard told reporters that the hotel charge related to “due diligence” for a city street furniture program.
An AJC review of thousands of pages of credit card statements, supporting documentation and city policy found lax enforcement of rules meant to protect city taxpayers with a system that relies on a Finance Department employee to police spending by the mayor, the chief financial officer and other executives in the mayor’s cabinet.
Last year, the city loosened its travel policies by allowing department heads to approve international business class airfare. Beard, who earned $273,000 last year, did just that, charging nearly $71,000 on six flights for himself and colleagues.
The new policy also removed a prohibition on “excessive” charges for meals.
In a statement, Beard said the AJC was trying to “tarnish the results of the Reed Administration,” and said his work helped bring financial stability to the city.
“As Chief Financial Officer, I took very seriously my fiduciary responsibilities and at no time abused the authority of my position,” the statement said. “Charges on my city-issued p-card represent legitimate and appropriate expenses incurred in my role as CFO.”
In May, interim Chief Financial Officer John Gaffney told the AJC and Channel 2 that his department was powerless to stop inappropriate charges during the Reed administration.
“We do our best to change behavior, but that’s all we can do,” Gaffney said at the time. “There was no behavior change.”
Atlanta City Council President Felicia Moore said it’s time to force a change of behavior. And it’s not fair to put that responsibility on employees who are subordinate to the card holders, she said. Moore has proposed that credit card review and enforcement be handled by a new compliance department that would be independent from the mayor’s office and the City Council.
“These are high-level employees, and questioning them could impact their jobs,” Moore said. “It’s an unfair burden to expose an employee in Finance to potential retribution.”
‘See and feel a difference’
After three stories by the AJC about seemingly improper card use, federal prosecutors have issued two subpoenas demanding credit card statements and related records for Reed and officials in his office, along with the nine police officers assigned to his Executive Protection Unit.
All of that scrutiny has turned the credit card issue into a hot political topic, with Mayor Keisha Lance Bottoms and several council members offering dueling ideas about how to tighten down the program and increase penalties for improper card use.
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The Bottoms’ administration has repeatedly refused to allow AJC reporters to question Finance Department supervisors since Gaffney’s comments in the spring. But Bottoms told Channel 2 last week that she hopes the council will quickly pass her new legislation.
“Hopefully they will pass it, and it can be signed into law, and the public can start to really see and feel that there’s a difference,” Bottoms said.
‘A more transparent way’
Not everyone is convinced there would be much difference under Bottoms’ plan.
The mayor’s proposal more specifically names prohibited charges — many of the things that were subject to AJC stories, such as airfare for family members; dry cleaning; and anything for personal use. But it keeps oversight of the program exactly as is.
“The Chief Financial Officer shall designate a Program Administrator within the Finance Department to monitor the Program,” the resolution says.
Councilman J.P. Matzigkeit questioned the administration about that during a committee meeting last week.
“I realize this is a sort of conundrum, but I would ask you to look at whether there’s another way, a more transparent way for that to happen,” Matzigkeit said.
Just as important as the credit card policy are the city’s rules for travel, which also appear to have been violated by Reed, Beard and other members of the previous administration.
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A 2007 travel policy in effect until last year prohibited “excessive” meal or lodging charges, along with any hotel rental in Atlanta metro. It did not define what is excessive. The new policy says hotel accommodations should be secured “at the lowest logical rate” on the city’s travel portal.
Beard used his card to rent hotel rooms for $10,000 and $8,000 last year; and had four restaurant tabs of $1,000 or more before the policy changed.
Reed charged more than $150,000 on his card during his final year in office, and his executive protection officers regularly picked up dry cleaning and fast food meals for him. Reed repaid taxpayers $12,000 from his personal bank account before his statements were released to the AJC.
Last year, three members of Reed’s protection unit purchased $1,900 plane tickets to Las Vegas with the mayor, the day before the marquee boxing match between Floyd Mayweather and Conor McGregor. Reed can be seen walking through a live shot of Fox Sports inside the arena that night.
And Reed or his bodyguards routinely violated the rule about Atlanta hotel stays, renting rooms locally 38 times in the past three years at a cost of $7,228.
Reed declined to comment or answer questions for this story, but a police spokesman previously told the AJC that many of those Atlanta rentals were for convenience — when the mayor had early morning or late-night events near those hotels. He also said some were rented because of bad weather.
“That’s why you have drivers,” to avoid those charges, said Vince Champion, Southeastern Regional Director for the International Brotherhood of Police Officers.
`Whole lot of headlines’
Council members have other doubts about Bottoms’ proposal. Some members of the Executive Finance Committee wondered why it’s a resolution, instead of an ordinance carrying the weight of law.
Councilman Howard Shook, chairman of the committee, said the travel and credit card policies should be addressed together, but acknowledged it will likely be difficult for council to find consensus.
“While no one wants to see the mayor stay at the Dew Drop Inn or stay in her car, I do foresee a whole lot of problems with us agreeing what [spending limits] should look like,” Shook said.
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Charletta Wilson Jacks, a senior administration aide for Bottoms, answered questions about the mayor’s proposal during a council committee meeting last week. She said the administration would have concerns about combining the two, because the travel policy applies to all 8,000 employees while only 18 people have city-issued credit cards.
“Eighteen credit cards can get you a whole lot of news headlines and a whole lot of folks wondering where and what kind of decision-making is made,” Councilman Andre Dickens said. “This is a critical time. We need to make sure every policy we do is substantial. It’s a statement of record that this city is going to hold itself accountable. We don’t need the GBI, the FBI, anybody else to police us. We police ourselves.”
Wilson Jacks said Bottoms is “committed to the conversation and … to transparency.”
Channel 2 Action News investigative reporter Aaron Diamant contributed to this story.
Credit card policy
“Business Credit Cards are issued “Only” to those City Employees that have been designated and approved by the Mayor.
“General Accounting has identified certain high-risk merchant categories that will expose the City to scrutiny by the public and press, including involvement in improper or questionable purchases. The top six high-risk merchant categories are gambling, adult, ISP and hosting services, downloading of software, spas and dating. These are not the only types of transactions that can put the City at risk. City credit card users should use prudence and good judgment when using a City credit card for official City business.
“Original (receipts) are always required, however, we do understand there will be times when originals may become lost or unattainable. In the event this situation presents itself, there is a form to be used only in extenuating circumstances. It must be filled out completely and signed by the Cardholder.”