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Local Govt & Politics
Ethics office questions $150K in credit card swipes by Atlanta’s ex-CFO
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Ethics office questions $150K in credit card swipes by Atlanta’s ex-CFO

The city's ethics board is demanding answers for questionable spending that includes air travel and hotel accommodations that cost more than $17,000.

Ethics office questions $150K in credit card swipes by Atlanta’s ex-CFO

The city of Atlanta’s ethics office has filed a complaint alleging the city’s former top financial officer charged nearly $150,000 in potentially improper expenses to his city-issued credit card from 2014 to 2018.

The complaint follows reporting by The Atlanta Journal-Constitution and Channel 2 Action News last year that showed former CFO Jim Beard, former Mayor Kasim Reed and members of Reed’s cabinet racked up hundreds of thousands of dollars in questionable charges on luxury airfare, lodging and at high-end restaurants across the globe.

Federal investigators also are scrutinizing travel and other spending at City Hall as part of a long-running corruption probe.

One recent grand jury subpoena sought information regarding calendars, travel records, credit card statements and expense reports for Reed, his security detail and employees within the mayor’s office during the entirety of Reed’s two terms in office.

Sara Henderson, executive director of government watchdog group Common Cause Georgia, called the complaint stunning.

“One hundred and fifty thousand dollars is as much as a home in some parts of the city of Atlanta,” Henderson said. She called on Mayor Keisha Lance Bottoms to bring forward tough new ethics reforms.

RELATED CONTENT: LATEST STORIES

The ethics complaint flagged 44 examples totaling more than $149,000 in questionable purchases that lacked required documentation, including several expenses previously identified by the AJC as potential violations of city travel policies. These included a $10,000 hotel stay in Paris that Beard later repaid to the city, and luxury airfare, hotel rooms and meals in Barcelona.

Other flagged expenses include:

— $6,272 in plane tickets from Atlanta to Newark, N.J., purchased for five non-city employees and three city employees to attend a clergy forum in March 2014;

— $13,904.96 in airfare for former city human resources commissioner Yvonne Yancy in April 2017 and a separate trip for Yancy to China in first and business class for $9,519.76;

— In 2017, Beard spent nearly $28,000 for business class travel and hotel accommodations for former Reed scheduler Cheryl Pe Chua to travel to Frankfurt, Germany, and Amsterdam; and an additional $8,436.70 for Chua and another staffer to stay in a luxury hotel in Paris.

KENT D. JOHNSON / AJC/KDJOHNSON@AJC.COM
SEPTEMBER 26, 2013 ATLANTA Board member Yvonne Cowser Yancy, Department of Human Services commissioner, talks with the media following the meeting. Members of the Atlanta General Employees' pension board meet in a specially called meeting at City Hall Thursday, September 26, 2013. They discussed issues raised about their financial adviser, Larry Gray, in an AJC story that published two weeks ago, about the advisers lack of disclosure about federal tax liens and a legal settlement. The board voted to authorize an audit of their investments. KENT D. JOHNSON / KDJOHNSON@AJC.COM
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ATL City Hall bonuses Kasim Reed 260x260

Photo Credit: KENT D. JOHNSON / AJC/KDJOHNSON@AJC.COM
SEPTEMBER 26, 2013 ATLANTA Board member Yvonne Cowser Yancy, Department of Human Services commissioner, talks with the media following the meeting. Members of the Atlanta General Employees' pension board meet in a specially called meeting at City Hall Thursday, September 26, 2013. They discussed issues raised about their financial adviser, Larry Gray, in an AJC story that published two weeks ago, about the advisers lack of disclosure about federal tax liens and a legal settlement. The board voted to authorize an audit of their investments. KENT D. JOHNSON / KDJOHNSON@AJC.COM

Ethics Officer Jabu Sengova wrote in a Dec. 6 letter to Beard that he failed to provide supporting documentation justifying the expenses.

Sengova alleged Beard’s expenses included “premium domestic and international travel, hotel, retail and other potentially unallowable expenses for current and former city employees, non-city employees, and yourself.”

Some of Beard’s expenses were for travel to perform paid outside work for the Municipal Securities Rulemaking Board, the complaint said. Beard formerly served as a board member at MSRB, a regulator that institutes rules for financial institutions that sell municipal bonds.

Beard did not return messages seeking comment. In September, 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.

He denied abusing his position and said “charges on my city-issued p-card represent legitimate and appropriate expenses incurred in my role as CFO.”

‘People just aren’t following the rules’

City Councilman Andre Dickens and the Bottoms administration expect to bring forward new city credit card rules later this month, Dickens said.

In a statement, the Bottoms administration said it “remains fully cooperative with the Ethics Office and (Ethics) Board as they carry out their duties on behalf of the citizens of Atlanta.”

The statement also touted Bottoms’ efforts to open city government to public scrutiny, including an online spending database and reforms to open records production.

“The Administration has taken significant measures to shine a light on City spending as we work to reestablish public trust in government,” the statement said.

RELATED CONTENT: CITY HALL SPENDING

City Council President Felicia Moore said she will soon introduce legislation creating of an independent compliance office that would put teeth into enforcement of the city’s codes and mete out disciplinary action for employees and elected officials for violations.

“There are rules and people just aren’t following the rules,” Moore said, adding that City Hall needs someone “watching over people’s shoulders and who will hold them accountable.”

Atlanta City Councilman Howard Shook, who chairs the finance/executive committee, said the ethics complaint process will bring to light any potential abuses of the system.

“I think once we know that we’ll have a clear idea of what exactly was violated and a better idea of how to fix it,” he said. “I think we’ve always felt that you can’t have the person generating these expenses be the same person who is supposed to be keeping the books.”

Beard at center of Reed administration’s spending

Beard was hired by the city in 2010 and later became CFO running the finance department, which oversees the city credit card or “p-card” program. He emerged as a trusted lieutenant to former Mayor Reed, but left the city last year in the early months of the Bottoms administration after completing a $60,000, six-week business course at Harvard University — paid for by taxpayers — as he was headed out the door.

Beard has been at the center of several controversies the AJC and Channel 2 brought to light at the close of or following the end of the Reed administration.

The Atlanta Journal-Constitution
Former Atlanta Chief Financial Officer Jim Beard
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Ethics office questions $150K in credit card swipes by Atlanta’s ex-CFO

Photo Credit: The Atlanta Journal-Constitution
Former Atlanta Chief Financial Officer Jim Beard

In 2017, the city loosened its travel policies by allowing department heads like Beard to approve international business class airfare. Beard, who earned $273,000 in salary, did just that, charging nearly $71,000 on six flights for himself and colleagues, records obtained by the AJC last year showed.

The previous policy stated airfare “shall be” purchased at the most economical rate; restaurant expenses require a receipt and explanation for the business purpose; and the cards couldn’t be used to purchase alcohol or any other personal items. The new policy also removed a prohibition on “excessive” charges for meals.

In December 2017, Beard played a critical role in doling out hundreds of thousands of dollars in bonuses and gifts for raffles and ugly sweater contests and city investigations later found were unconstitutional.

That same month, Beard used his city-issued credit card to cover two-thirds of a more than $12,500 dinner at the posh American Cut steakhouse in Buckhead for Reed and members of Reed’s cabinet. The four-figure restaurant tab was not among the contested expenses listed in the ethics complaint.

Last May, John Gaffney, then the interim CFO, said his department was powerless to stop inappropriate credit card charges during Beard’s tenure in the Reed administration.

“We do our best to change behavior, but that’s all we can do,” Gaffney said. “There was no behavior change.”

In her letter, Sengova wrote that Beard’s purchases were “a potential violation” of Section 2-811 of the city’s Code of Ethics.

That section states in part that “no official or employee shall request, use or permit the use of any publicly owned or publicly supported property, vehicle, equipment, labor or service for the private advantage of such official or employee or any other person or private entity.”

Sengova declined to comment on the complaint or discuss potential sanctions Beard might face if any of the credit card expenses are found to be improper. Beard has until Jan. 7 to file a written response to the allegations.

Sengova requested Beard provide justifications “and all supporting documentation in your possession,” including receipts, flight itineraries and conference registrations.

The letter suggests the ethics office investigation could grow beyond those outlined in the letter.

Sengova also requested Beard review records dating to the beginning of his city employment in 2010 for all records of city reimbursements or city credit card charges, and if any were unallowable, to disclose them to the ethics office.

Our reporting

In 2018, The Atlanta Journal-Constitution and Channel 2 Action News outlined questionable city credit card spending on luxury airfare, hotels, meals and potential personal expenses by former Mayor Kasim Reed, former chief financial officer Jim Beard and other cabinet members. The reports also showed potentially improper spending by members of Reed’s security detail. Following reports by the AJC and Channel 2, a federal grand jury issued subpoenas for records related to travel and credit card spending from the mayor’s office and security detail.

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