Deal gave Georgia authority heads ‘golden parachute’ contracts last year

The long-term deals cover some of the highest-paid officials in the state, including the heads of the Georgia Lottery, the state Ports Authority and the Georgia World Congress Center.

The ex-governor’s top deputy, Chris Riley, said the long-term contracts help ensure that experienced bureaucrats don’t bolt for more lucrative offers. He said they were awarded to leaders of state authorities that operate “much like a private business” and raise money through fees and sales, rather than relying on state appropriations.

The spate of extensions could buck a long-held practice in state government. While some coaches at public universities have signed long-term contracts with guaranteed pay, those perks have only occasionally been extended to other state government officials.

Joyce Kitchens, an employment law attorney who reviewed the documents at the request of the AJC and Channel 2, said the contracts do not “appear to comply with industry standards for public employees.”

“In the private sector, there are occasions where you’ll get a superstar who is writing their own golden parachute,” she said. “But in the public sector, you rarely do.”

They also make it more difficult for Kemp to install his own choices for the jobs. A Kemp spokesman said the governor’s chief attorney is evaluating each of the contracts to “determine what options are available.”

His political allies put a finer point on their frustration.

"I thought state employees served at the pleasure of the governor or respective department heads and could be relieved of their duties at any time," said state Sen. Bill Cowsert, an Athens Republican who said he was surprised that any state official held a long-term contract.

“Seems like this binds the newly elected governor and Legislature to long-term personnel decisions and financial commitments made by previous administrations,” said Cowsert, who is Kemp’s brother-in-law.

‘Got it right’

The AJC and Channel 2 collected the contracts of about a dozen authority heads, which revealed that many of them signed multiyear extensions in the final months of Deal’s administration.

The lengthiest was given to Griff Lynch, the director of the Georgia Ports Authority. His new deal, signed in December, awards him a $480,000 salary plus bonuses worth up to 40 percent of his annual pay and other perks through the end of 2023.

The contract stipulates that if he’s terminated without cause before then, he’ll be awarded two times his base annual salary plus incentives that could top $300,000.

That means that if Kemp appoints a new ports director in his first term — or even one year into a potential second one — the authority will first have to dish out well over $1 million in severance to Lynch.

Frank Poe of the Georgia World Congress Center received an extension that also will outlast Kemp’s first term, signing a deal in November that will pay him about $309,000 a year through June 2023.

An amendment signed days later doesn’t guarantee Poe any severance, but it also eliminates a clause that Kitchens said “makes it almost impossible for the state authority to terminate without litigation.”

And the director of the Georgia Technology Authority received a new three-year contract in July that guarantees him an annual salary of $185,000 through June 2021 if he’s fired without cause before then. A switch now could cost roughly $400,000 in severance.

The contracts of several other directors were extended with no explicit salary guarantee. Another agency leader, Steve Stancil of the Georgia Building Authority, announced he would retire shortly after Kemp’s election.

In a statement, Riley said Deal’s administration made the decision to use contracts shortly after he was elected to his first term in November 2010. He said many authorities and executive directors were operating under contracts during Gov. Sonny Perdue’s administration.

“As such, we believed Governor Perdue got it right and most, if not all, authority heads remained,” he said. “Some even had contract extensions by their governing boards throughout the entire Deal administration, where they continue to excel in their professional fields.”

The records show that some authority heads, such as Jones Hooks of the Jekyll Island State Park, have had a series of contracts extended since 2008. Others, including the head of the State Road and Tollway Authority, operate at an at-will basis with no long-term contract.

‘Very generous’

The same went for the Georgia Lottery, when a previous director, Debbie Alford, had no multiyear contract.

A former budget director for Deal, Alford was a controversial choice at the time because she didn't have experience running a lottery like her predecessors, and pressure soon mounted from lawmakers who wanted her to shift more money into education programs rather than administrative costs.

She weathered the criticism, and lottery profits going toward education hit $1 billion for the first time. Upon Alford's departure in 2018, she was awarded a series of consulting contracts to work on what lottery records describe as a "major IT initiative" that paid her $300,000 over a year.

The governor's pick to replace Alford was Gretchen Corbin, who had emerged as one of Deal's most trusted allies, serving as a deputy commissioner of the state Department of Economic Development, commissioner of the Department of Community Affairs and, later, head of the state's technical college system.

Corbin avoided the same sort of blowback, and in July the lottery set a record by transferring more than $1.1 billion to education programs. A few months later, on Oct. 30, she was summoned to a board meeting with a lucrative deal in hand.

Her contract extension ensured she would receive $300,000 a year through June 2021 — even if she’s terminated without cause. That means that the lottery would be on the hook for roughly $700,000 if Kemp decided to name someone else this month to lead it.

Kitchens, the veteran employment law specialist, called it a “very generous severance provision that’s unusual in my experience.”

“I haven’t seen really generous severance agreements in the public-sector contracts,” she said, “except for football coaches of public universities.”

Corbin's extension was approved by a seven-member lottery board stocked with Deal's allies. Teresa MacCartney, Deal's former budget director, is chairwoman of the panel. Other members include his cousin, financial executive Simeon Deal, and two former members of his administration.

According to the minutes of an Oct. 30 executive session meeting obtained by the AJC and Channel 2, MacCartney encouraged the lottery to take a cue from private businesses “by securing the service of their respective CEOs by way of employment agreements.”

In the notes of the meeting, MacCartney said the extension was designed to give Corbin “a reason to forgo other potential employment opportunities that come her way.”

A few weeks later, the lottery hired one of Deal's daughters and another former administration aide to newly created positions with six-figure salaries. A lottery spokeswoman called them the most qualified of several applicants and said the agency "looks forward to their contributions."

OUR REPORTING

After the Atlanta Journal-Constitution and Channel 2 Action News reported that the Georgia Lottery hired former Gov. Nathan Deal’s daughter to a six-figure salary, the news outlets decided to dig deeper into the contracts. That revealed that the lottery head, as well as the leaders of other powerful state organizations, signed multiyear contracts shortly before he left office. And some had severance clauses that will cost millions if Gov. Brian Kemp wants to make a change.

Stay on top of what’s happening in Georgia government and politics at ajc.com/news/georgia-government/.