The secret legal settlement between former Atlanta Mayor Kasim Reed's administration and fired airport general manager Miguel Southwell has become a major focus of the on-going federal corruption investigation at Atlanta City Hall, new records obtained by The Atlanta Journal-Constitution show.
The development is significant because prosecutors appear to be probing unanswered questions about how the city’s law department negotiated the settlement’s terms, why a portion of it was kept from City Council and who paid Southwell $147,000 to resolve the dispute.
“It’s important for us to understand how that occurred, where the money came from, and who allowed it to occur,” Atlanta City Council President Felicia Moore told the AJC.
Mark Trigg, the attorney hired by the city to negotiate the 2016 settlement with Southwell’s attorney, testified Dec. 11 before the federal grand jury considering evidence in the now four-year-old corruption probe, according to legal bills and emails obtained by the AJC.
Trigg also provided federal prosecutors with text, email and voice mail messages related to the Southwell settlement, after extended negotiations with federal prosecutors over allowable redactions intended to protect attorney-client privileged communications, the documents show. Prosecutors continued seeking unredacted messages as recently as Feb. 27.
Attorney Thomas O’Brien and other lawyers with a Los Angeles-based firm that is working for the city on federal investigation issues submitted legal bills to the city for work from Oct. 19 to Jan. 31, with at least 44 instances of billable hours for work related to Trigg.
“Prep meeting with Mark Trigg and (his) counsel; meeting with (federal prosecutors) and FBI to discuss disclosure limitations; attend grand jury; debrief with Mark Trigg and counsel; update mayor and city attorney,” says a Dec. 11 entry that billed the city law department for 6 hours at $950 per hour.
The AJC received the invoices after requesting them through the Georgia Open Records Act.
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One of Trigg’s attorneys on Wednesday provided the AJC with a statement that described Trigg as a witness. The statement also said Trigg turned over information at the request of federal prosecutors about issues that the city “has expressly authorized him to provide.”
“Mr. Trigg has been advised that he is neither a subject nor a target of the pending investigation,” the statement says. “Quite to the contrary, he is merely a fact witness regarding certain isolated events within the scope of the investigation.”
Testimony before federal grand juries is secret. Witnesses aren’t prohibited from revealing what they told the grand jury, but Paula Junghans, a Washington, D.C.-based attorney for Trigg, declined to provide additional information.
Settlement defused a crisis
Reed fired Southwell in May 2016 — a move that set off explosive allegations, with both men accusing the other of illegal activities. The broadsides came at an inopportune time for Reed, who was a surrogate for Democratic presidential nominee Hillary Clinton and was being vetted for a high-profile role in her administration.
By August of that year, the two men reached a detente. They released a vaguely worded statement in September retracting their previous allegations of illegal conduct. The statement also referenced a "resolution" to the matter, although a Reed spokeswoman denied Southwell had been paid as part of it.
City Council approved a $85,516 settlement in December 2016, which council members were told would pay for career counseling, job placement assistance and health insurance. The Reed administration told council that the money represented the full settlement with the fired airport boss.
But last summer the AJC and Channel 2 Action News revealed the secret portion of the agreement after the news organizations obtained emails and other documents that showed Trigg and Southwell's attorney, Lee Parks, finalizing plans for $147,000 in additional payments to Southwell from unspecified sources.
The agreement was remarkable because the full settlement was hidden from City Council, and it turned out the vast majority of the $85,516 authorized by council actually went to Parks' law firm for his fee in negotiating the secret portion of the settlement.
Parks told the AJC in August that “the manner in which the (Southwell) settlement was memorialized was dictated by the attorney for the City and Mayor Reed.” Parks declined comment for this story.
The city’s law department is responsible for hiring outside counsel and approving its work. Cathy Hampton was the city attorney at the time of the Southwell negotiations. She stepped down from that position in 2017.
Thursday, the AJC reported that prosecutors are also examining the relationship between Hampton and Paul Hastings LLP, another law firm handling legal matters for the city in the federal probe.
Expert: ‘They see some fire’
Demanding grand jury testimony from an attorney about a client is an unusual move by federal prosecutors because it typically requires obtaining permission from high-ranking officials in the Justice Department’s main office in Washington, D.C., said two former federal prosecutors.
“It speaks to how important this information may be and how important this investigation is to the (U.S. Attorney’s) office,” said Bret Williams, a former federal prosecutor in Georgia and New York who is now in private practice. “I think they don’t just see smoke. I think they see some fire.”
Some of that fire, Williams said, could be conspiracy or wire fraud, particularly if officials in the Reed administration sent emails or other electronic communications indicating intent to mislead the council on terms of the settlement.
Reed said last summer that the circumstances surrounding Southwell’s firing were “thoroughly reviewed by the Justice Department and no wrongdoing or improper behavior was found.” He did not respond to text messages seeking comment on Trigg’s grand jury testimony.
The city also did not respond to a request for comment.
Testimony from attorneys rare
Caren Morrison, a law professor at Georgia State University who was a federal prosecutor in the Eastern District of New York, said the legal invoices make her think prosecutors are looking at issues surrounding that settlement — as opposed to the allegations Southwell made after his firing that Reed steered contract awards to favored airport vendors.
“I think they’re following up with the attorney specifically because it doesn’t seem that they’ve fully unraveled what exactly was going on with these payments in the first place — why City Council was lied to, why the payment to the lawyer was masked,” Morrison said. “And the attorney seems to be in an extremely good position, being one of the principles dealing with this matter or trying to set up this unusual payments scheme.
“Attorneys are not frequently brought in before a grand jury. But when the investigation relates to a (process) that the attorney is an active participant in, then it makes sense to examine the attorney before the grand jury.”
Though the settlement agreement did not disclose the source of the $147,000 payment to Southwell, emails from October 2016 showed Parks complained that his client had not been paid some two months after the agreement was reached. And the emails mentioned prominent Atlanta developer Scott Taylor, who at the time had major business ventures pending with the city.
“Mark this is getting out of control,” Parks wrote to Trigg. “Scott Taylor now wants a contract that absolves him from payment. We have a contract with the city. It is your obligation to work with whoever is going to make the payments, without our having to separately contract with them.”
Taylor’s firm, Carter, said it hired Southwell as a consultant for work related to airports outside Georgia after Reed fired him as Atlanta’s airport general manager. A spokesman for the company said Taylor had no knowledge of any settlement negotiations with Southwell, and didn’t know either of the lawyers involved.
A lawyer for Trigg said Friday that Trigg “played no role in any third-party contracts to which Miguel Southwell may have been a party.”
The legal invoices and emails obtained by the AJC for this story do not mention Taylor, who declined to comment.
Our reporting
The AJC and Channel 2 Action News reported last year that the city of Atlanta secretly brokered a settlement between former Mayor Kasim Reed and former airport chief Miguel Southwell, who Reed fired in 2016. Today’s story reports that federal prosecutors are investigating the details of the settlement.
