LOADING

Type to search

Latest Reports

Fulton Development Authority’s hiring of lobbyists is questioned

Rusty Paul, left, the mayor of Sandy Springs and a former Development Authority of Fulton County lobbyist, and former DAFC chairman Bob Shaw. Shaw was a paid consultant to Paul's firm prior to its work with the DAFC.

The Development Authority of Fulton County is spending $5,000 a month on government lobbyists, a service some similar metro authorities don’t use. Until very recently, those lobbyists included a firm owned by the mayor of Sandy Springs that previously paid consulting fees to longtime DAFC board chair Bob Shaw — a situation one ethics watchdog says should have raised “red flags” well before Shaw was forced out this month amid financial scandal.

New board chair Michel “Marty” Turpeau says DAFC needs outside lobbyists because it is smaller and gets less government support than similar authorities. Sandy Springs Mayor Rusty Paul says he stopped paying Shaw prior to working for DAFC, and that conflicts of interest were avoided through such mechanisms as Shaw recusing himself from lobbying contract decisions and the city manager handling local discussions with the authority. Shaw did not respond to comment requests made by phone and email.

But critics say the DAFC hires lobbyists primarily because of its uniquely controversial role in granting tax breaks to real estate developments within Atlanta and other cities, and that the potential stickiness of Paul’s lobbying work should revive concerns about development authorities creating a “good old boy network” — especially in the wake of the scandal over Shaw and other board members receiving hundreds of thousands of dollars in questionable “per diem” payments.

Julian Bene. (File Photo: Maggie Lee)

“It’s wrong for the DAFC board to spend fees they earn from wasteful tax breaks on lobbying to fend off public pressure to stop those wasteful giveaways,” said Julian Bene, an activist who is party to a lawsuit challenging some of the authority’s tax abatements in court. “Let’s hope new DAFC board members will stop that practice.”

“I’m literally lost for words because there are so many red flags that come up,” said William Perry, head of the activist group Georgia Ethics Watchdogs, about Paul’s lobbying work for DAFC. “Unfortunately, they probably don’t violate Georgia’s extremely weak conflict-of-interest laws, even though they should.”

Turpeau says DAFC needs help from outside firms — also including a large public relations company — because it has only three staff members. “We do not receive money from the Fulton County budget nor are we provided support from their staff to operate as some other development authorities do from their local governments,” he said. As for Paul’s lobbying work — which ended in April after about 12 years — Turpeau said DAFC always followed conflict-of-interest laws and “had minimal interaction with Sandy Springs” on economic development issues.

Paul said his firm, RP Communications (often doing business as iSquared Communications), stopped paying Shaw around 2007, well before winning the DAFC lobbying contract around 2009. “All financial arrangements ended before we started work for DAFC. … However, due to his past relationship with the firm, we built a solid firewall to ensure that conflicts would be avoided,” said Paul, citing Shaw’s recusals, which are confirmed by some board meeting minutes.

Rusty Paul, mayor of Sandy Springs and former lobbyist and marketing consultant to the DAFC.

Since Turpeau took over as board chair in November 2020, the North Fulton-based RP Communications/iSquared contract was phased out ahead of schedule and its work replaced by Ohio River South, a lobbying firm that he says will focus more on relationships in South Fulton to “meet the needs of historically underserved areas.” Turpeau says that in the roughly three years before he became board chair, he was unaware of the details or existence of some of the lobbying contracts.

Those comments echo Turpeau’s other statements about reforming and reorienting DAFC, which was already reining in the per diem payments after, according to board members, they incidentally learned about Shaw’s excessive use prior to the public scandal. On June 22, the DAFC board approved further reforms to its per diem policy while the payments remain on hold pending legal review.

“It is our hope that people understand that while we did not contribute to these past issues, once discovered, we quickly worked to ensure policies were put into place and will continue to be refined, just as we did today, to prevent this from happening again,” Turpeau said in an email in reference to the new board leadership and the per diem policy. “We want this development authority that has been a pivotal partner in the economic success of Fulton County to move forward with transparency and trust.”

Howard Franklin, managing partner of Ohio River South, says he hasn’t heard of state legislators looking to crack down on the DAFC in the wake of the scandal — yet. “Obviously… it’s an odd time to be entering [the lobbying work] now since we’re in the news. …It’s too early to say whether we expect any legislation aimed at the Development Authority of Fulton County,” Franklin said, adding that recent changes to the board’s membership and policies may help. “I hope that will quell, I think it will be able to quell [concerns], before we go back to the General Assembly,” he said.

But for critics like Perry, the self-reform isn’t enough. “This whole system needs to be scrapped and rebuilt for more citizen involvement [and] more oversight, and certainly I think everyone on the current board should step down,” he said. “It’s completely embarrassing.”

Lobbying contracts

DAFC internal documents obtained by Bene through a public records request revealed the per diem payments that became a scandal when the Atlanta Journal-Constitution and Channel 2 Action News reported them. The records also include various lobbyist contracts.

Howard Franklin, managing partner at Ohio River South.

Paul’s firm was long the DAFC’s prime lobbyist and marketing advisor. (Paul also affiliated with the firm Arnall Golden Gregory from roughly 2007 to 2012, the same firm that today provides DAFC’s attorneys.) A 2018 contract renewal that was to run into 2023 paid a starting rate of $5,192 per month for “public relations, government relations, marketing and image enhancement.” A January 2021 amendment reduced the contract to government relations and $3,500 a month, and it ended in April.

In 2019, DAFC also contracted with Paramount Consulting Group, which is led by Tharon Johnson, known as a panelist on FOX 5’s public affairs program “The Georgia Gang.” The contract was to pay $10,000 a month plus expenses for lobbying the Fulton County legislative delegation, the Fulton Board of Commissioners, the City of Atlanta and the Atlanta school board. Turpeau said he was unaware that contract existed and that Paramount is not currently working for DAFC. Johnson did not respond to a question about his work under that contract.

Ohio River South, the new lobbying firm, is being paid $5,000 a month on a contract that began Jan. 1 and runs through July 1, with six-month renewals available. The contract includes three broad strategies: “Advocate for DAFC priorities in the General Assembly”; “Work with local delegation to expand DAFC’s reach and influence”; and “Engage relevant jurisdictions within Fulton County’s footprint.” One goal is to “recruit a coalition of bipartisan leaders to DAFC’s legislative agenda,” including officials in the state legislature and all 15 Fulton cities.

Besides lobbyists, DAFC also contracts with the marketing and public relations firm Jackson Spalding. That company’s contract started in 2020 under the previous board leadership with a contract that paid $7,500 a month plus expenses.

Michel “Marty” Turpeau, board chair and interim executive director of the DAFC.

Turpeau said it’s “common knowledge” that governments and other authorities hire lobbyists and public relations firms and that DAFC needs the help due to lack of staff to fill such roles. DAFC has three staff members and an executive director position that is currently vacant, with Turpeau doubling there in an interim role. He compared DAFC to DeKalb County’s development authority, with a staff of eight, and Invest Atlanta, an umbrella organization that combines three economic development agencies and has a large staff.

Invest Atlanta and Decide DeKalb, as the county authority brands itself, have communications staffers and say they either currently or soon will hire outside communication firms for certain functions. However, both of those authorities say they do not have any lobbyists, either on staff or by contract. “We operate differently from them,” Invest Atlanta spokesperson Matt Fogt said when told of DAFC’s use of lobbyists.

However, Invest Atlanta has had lobbyists registered to represent it at times over the past 15 years, according to Georgia’s online lobbyist registration records. The most recent was Robert S. Highsmith Jr., a well-known political figure and attorney to former Mayor Kasim Reed, whose lobbyist registration with the Atlanta Development Authority (the pre-branding name of Invest Atlanta) ended in 2018.

Among development authorities within metro-area counties and cities, Clayton County’s is the only other one to have a lobby registered to represent it in recent years. A joint authority of Fulton and several other metro counties has used lobbyists as well — including Paul and Shaw roughly 15 years ago. A handful outside the metro area have registered lobbyists in recent years also, such as the authority in Bainbridge/Decatur County.

Bene, who is a former Invest Atlanta board member, says he believes DAFC hires lobbyists due to the longstanding controversy over its granting of tax abatements on luxurious projects within cities that have their own development authorities, including Atlanta and South Fulton. Bene argues that the per diem payments created a self-interested reason to continue granting such deals.

In an extraordinary situation in Atlanta, the City Council, the school board and Invest Atlanta have demanded — unsuccessfully — that DAFC stop granting tax breaks within the city. (Ohio River South, the new lobbying firm, says its other clients include the Atlanta school board, for whom it writes and produces the district’s start-of-the-year newsletter but does not lobby.)

William Perry

William Perry, head of Georgia Ethics Watchdogs.

And some state lawmakers are putting development authorities on the defensive. This year’s House Bill 66 , proposed by Decatur state Rep. Mary Margaret Oliver and other DeKalb Democrats, would give schools and cities the legal standing to formally complain in court when county development authorities want to grant property tax breaks. Fulton Democrats led by state Rep. Derrick Jackson of Tyrone proposed House Bill 558, which would halt Fulton authority projects that don’t have school system and city support.

The state House’s second-highest-ranking Republican, Speaker Pro Tem Jan Jones of Milton, signed onto a similar bill in 2020 that would have required DAFC projects get school and city approval. None of the bills ended up getting a committee vote.

Perry noted that DAFC is well-known for approving virtually every tax break request that comes before it and thus does not seem to need policy changes to carry out its work. “So the need for lobbyists is either a way to pay back friends or a way to put icing on the cake,” he said.

The mayor and the board chair

Bob Shaw, former board member and chairman of the DAFC. (File Photo: Maria Saporta)

Paul’s lobbying and consulting work with DAFC began around the time he wrapped up a term on the Sandy Springs City Council. Besides the relationship with Shaw, Paul’s lobbying position grew more complex when he was elected mayor in 2013, a position he continues to hold and for which he is now running for reelection. Sandy Springs has its own development authority, and as a city leader, Paul was, at least on paper, among those that new lobbyist Ohio River South would seek to influence — though he and Franklin say no actual conversations have happened.

Perry of Georgia Ethics Watchdogs says that was all too cozy. “How can you, in good conscience, hire a lobbying company you either work for or used to work for, with the target [of lobbying] also being someone who owns the company?” he asks.

Paul says any conflicts were avoided and noted that some other elected officials in the state also work as lobbyists. He is registered with the state and files disclosure paperwork that is publicly available online. “I believe we all endeavor to avoid conflicts of interest and there are no inherent conflicts in providing government affairs services while also serving our local communities,” he said.

Paul downplayed his business relationship with Shaw, though Shaw was featured prominently on the firm’s website and the two are politically close as former chairs of the Georgia Republican Party. Paul also noted that his lobbying work in general was no secret in Sandy Springs. But DAFC’s tax abatements on some controversial, city-approved projects were not well-known at the time.

“Mr. Shaw was never an employee,” Paul said. “When he retired from banking, he needed an office to work from, so we gave him access to an office in a building we owned. I paid him $500 a month plus the office to be a consultant mostly to review our company financials and assist with business financing.”

A detail from the iSquared website spotlighting the campaign experience of Rusty Paul and Bob Shaw.

The iSquared website, however, touted Shaw as “Campaign Director” and an expert on a variety of policy subjects. “As chairman of the State Republican Party during the Watergate era, he understands how to handle tough issues. Yet, no one is better known — knows more people — or is more respected in Georgia politics than Bob Shaw,” says the website, which remains live, but has not been updated since around 2008 and is virtually unreadable on modern browsers.

Only Shaw, Rusty Paul and Jan Paul, Rusty’s spouse and co-founder of the business, were featured on the website. Each has a profile page headed by a motto-style quotation; Shaw’s selection was the old joke, “If you can’t dazzle ’em with brilliance, baffle ’em with bullsh*t.”

Paul says the fee and the office arrangement ended before he took on the DAFC lobbying work and the “firewall” went up. Internal documents show that Shaw continued to use his iSquared company email address for DAFC business at least as late as 2019.

According to state records, Shaw was himself a registered lobbyist for a variety of organizations — sometimes including DAFC — from at least 2006, during his association with Paul’s firm, through 2018. Paul said that as part of his own DAFC contract, he completed Shaw’s lobbyist disclosures documents, but said Shaw was registered through DAFC, not RP Communications/iSquared.

Paul said that since becoming mayor, he has not solicited new lobbying clients and continued to work with existing ones, with a couple of exceptions for referrals. DAFC’s contact with the City of Sandy Springs generally bypasses the mayor, Paul said, under a pre-existing arrangement where former City Manager John McDonough “insisted that DAFC contact the city manager before approving any tax deals in Sandy Springs to ensure that projects met the city’s economic development objectives.”

However, Paul said, DAFC staff did ask his opinion about tax abatement proposals for two Sandy Springs apartment complexes. “I said the city did not favor tax abatements for apartment complexes, only business relocations, creation or expansions,” Paul said, adding he did not know the outcome of the requests.

Paul has often mentioned his lobbying work at City Council meetings, though usually with a focus on state legislation that might affect the city rather than his work for DAFC. DAFC’s tax abatements on local projects are not well-known, particularly as the authority for decades did not list the location of projects on its meeting agendas and until 2019 did not publicly disclose the estimated value of the tax breaks.

One example is the Square One apartment midrise, for which DAFC in 2013 approved a property tax abatement via the issuance of $42 million in tax-exempt bonds. In local media coverage at the time of its 2014 groundbreaking, Paul praised the project as aiding the creation of a new downtown area for the city, but there was no mention of the tax break from DAFC and Paul’s work for the authority.

Turpeau said that in his time as board chair, and from his understanding of previous DAFC actions, there were no conflicts involving Paul’s roles as mayor and lobbyist and that DAFC has followed state laws governing development authorities, “particularly with how conflicts are addressed.”

–Maggie Lee contributed

Update: This story has been updated with further information about Ohio River South’s work for Atlanta Public Schools and its school board.

Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.