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Monday, February 22, 2010

Report: Councilman meddled in bond deal, but didn't break law

Posted By on Mon, Feb 22, 2010 at 7:03 PM

click to enlarge Martin's meddling was not illegal
  • Martin's meddling was not illegal

An investigation by the city's law office has concluded there is "insufficient evidence to establish any inappropriate dealings" between Atlanta Council members and a California bond underwriting firm that was angling to get a piece of a $1.2 billion airport bond deal.

You'll recall that CL broke the story in late December that the city was investigating a suspicious effort by Councilman C.T. Martin to have Atlanta give San Fransisco-based Grigsby & Associates a larger share of the pending bond deal. The investigation was launched at the request of outgoing Chief Financial Officer Jim Glass after he received a memo advocating on behalf of Grigsby that Contract Compliance Officer Hubert Owens said he hadn't sent, even though it bore his signature.

The law office concludes that the memo was an oopsy:

The investigation revealed that a draft letter authored by Chief Procurement Officer Adam Smith was mistakenly sent out by a member of Owens’ staff, who was authorized to affix Owens’s electronic signature to the document. The investigation revealed that this mistake was an internal error and did not involve fraud on behalf of any external party.

The report does, however, confirm that "Councilmember C.T. Martin directly advocated for and requested that a specific investment banking firm, Grigsby & Associates, Inc. be added to the airport bond deal."

While Martin's actions, in themselves, were not illegal, the law office offers him a bit of a scolding:

Council members should proceed in an assiduous manner to ensure that their involvement in the selection of bond underwriters does not encroach on the Chief Financial Officer’s sole and independent authority to select qualified investment firms or serve as a catalyst for allegations of impropriety. The role of the Atlanta City Council in this process is to legislatively approve, but not select the bond underwriting team.

As we reported a month ago, Martin's meddling had so tainted the deal that the Reed administration had ordered the entire bond contract be rebid from scratch — a move the report likewise recommends.

Let's hope everyone has learned his lesson.

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