Federal investigations into funds at ATL airport remain ongoing: bond document
By David Pendered
Editor’s note: This story has been updated with the new trial date on federal bribery charges for former Atlanta Watershed Commissioner Jo Ann Macrina.
Two federal investigations into the use of funds at Atlanta’s airport are cited in terms of the bonds Atlanta sold with provisions that would penalize Buckhead for deannexing from the city.
The bond document confirms federal investigations are ongoing into the potential diversion of federal funds and other possible financial irregularities at Hartsfield-Jackson Atlanta International Airport.
The probes date to at least 2019 and appear to focus on activities of two former Atlanta CFO’s, Jim Beard and Roosevelt Council. Council’s time as the airport’s deputy general manager/CFO, and then as airport general manager, is covered by records sought by a subpoena.
The bond document does not provide new information about the investigations. The two sections remind of the continuing nature of these federal probes as Andre Dickens begins his term as mayor and Doug Shipman begins his term as president of the Atlanta City Council.
The Securities and Exchange Commission continues its probe of whether “there have been any violations of the federal securities laws,” according to the Official Statement on the bond issue, dated Dec. 15, 2021. Atlanta is “cooperating with the fact-finding inquiry.”
The Federal Aviation Authority’s investigation into “certain legal fees and whether those fees were properly paid with airport revenues remains pending,” according to the document. The FAA completed its fieldwork on March 13, 2020, and Atlanta is “awaiting follow-up or draft of the FAA’s findings.”
In addition to citing the federal probes, the document references language that penalizes any area that deannexes from Atlanta, such as Buckhead. Terms call for taxpayers in the deannexed area to pay off, within a year of deannexation, a portion of more than $188 million in bonds sold in December 2021. The amount of the payment is to be determined by an agent Atlanta selects. Provisions for appealing the size of payment do not appear to be provided in the legislation approved in December 2021 by the Atlanta City Council.
The airport investigations appear to focus on the fiduciary responsibilities exercised by Beard and Council, among others. The investigation covers at least three years, according to a subpoena served on Atlanta by the SEC: Fiscal Years ending on June 30, 2016, 2017 and 2018.
Beard served as Atlanta’s CFO during this period. Following the city elections in 2017, Beard continued to serve as the city’s CFO until he resigned in April 2018, four months after the start of Keisha Lance Bottoms’ term as mayor and two months before the end of FY 2018.
Beard was indicted Sept. 15, 2020, in U.S. District Court in Atlanta on charges including wire fraud, federal program theft, obstructing the IRS and possession of a machine gun.
Court records don’t appear to indicate if Beard is cooperating with any investigation. He’s free on a $10,000 bond and allowed to travel in portions of Georgia and Florida, and in South Carolina, court records show. Beard was allowed to travel to Las Vegas and the Grand Canyon National Park for two weeks in April 2021, records show. The next step in the prosecution is a pretrial conference scheduled for Feb. 9, according to the order by U.S. Magistrate Judge Linda Walker.
Council succeeded Beard as CFO in June 2018 and served in that capacity until he departed without public fanfare at some point in or before mid-2021.
On June 8, 2021, Bottoms issued a statement announcing her appointment of Mohamed Balla as CFO. Balla had joined the city in 2011 and the announcement cited his service in the Finance Department. Balla also had served in the city’s Department of Watershed Management for eight years, 11 months, first as interim deputy commissioner of financial administration and then as CFO/deputy commissioner of finance administration.
Balla served as the top financial assistant to former Watershed Commissioner Jo Ann Macrina. In his position, Balla had fiduciary responsibilities for the department.
Macrina was indicted on June 16, 2020, on two counts of bribery and one count involving false tax returns in connection with the award of two contracts totaling $11 million to a joint venture led by PRAD Group. In exchange for steering the contract to the joint venture, Macrina received payments including $10,000 cash, $30,000 in four payments and luxury accommodations at a hotel in Dubai, UAE, according to the indictment.
The indictment alleges that Macrina met alone, or together with unidentified city officials, with Lohrasb “Jeff” Jafari, former executive vice president of PRAD Group. Macrina spoke “thousands of times by telephone” with Jafari, according to the indictment.
Macrina’s trial is slated to begin Oct. 3 in U.S. District Court in Atlanta. It was postponed from March 8.
In the airport investigation and during the period covered by the SEC subpoena, Council held fiduciary positions at the airport. Council had served as deputy general manager/CFO of the airport from 2010 until January 2017. That’s when former Mayor Kasim Reed and the Atlanta City Council elevated him to the top position at the airport, general manager.
The SEC subpoena dated Oct. 9, 2019, seeks three sets of documents. It calls on Atlanta to provide:
“Documents sufficient to identify any and all individuals responsible for compliance with [code section] of the Federal Aviation Administration’s airport sponsor assurances dated March 2014.”
“Documents sufficient to identify any and all individuals who drafted, reviewed, or approved the Management’s Discussion and Analysis for the Airport’s Comprehensive Annual Financial Report (CFRA) for the Fiscal Years ended June 30, 2016, 2017 and 2018.”
“Documents sufficient to identify any and all individuals who transmitted, or who approved the transmission of the Airport’s CAFR for Fiscal Years ended June 30, 2016, 2017 and 2018 to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system.”