AMZN Amazon.com Inc

By Cameron McWhirter 

ATLANTA -- As this growing city looks to lure Amazon.com Inc. and other corporate giants to the region, its new mayor has found her efforts stymied by scandals from the outgoing administration and the aftereffects of a crippling cyberattack on city operations.

Mayor Keisha Lance Bottoms, who took office in January, is dealing with various investigations related to her predecessor, Kasim Reed, including a federal corruption probe into several areas of city government and city investigations into a deluge of bonuses he paid staff before leaving office.

In March, a ransomware attack shut down most government operations for days and erased an undetermined amount of data, including possibly some related to the Reed investigations. The city refused to pay the $50,000 ransom. It now has put up at least $5 million for experts to try to retrieve data and prevent or limit further attacks.

The bad publicity comes as Ms. Bottoms is trying to attract Amazon, which is considering Atlanta as a base for its second headquarters, along with 19 other finalist cities. Winning Amazon's bid, with its promise of up to 50,000 high-paying jobs, would transform the already growing city.

"I really wouldn't want to be in her shoes now, that's for sure," said Gina Pagnotta-Murphy, president of the Professional Association of City Employees, a large city union. "Before she can tackle her own agenda, she has to do damage control for all the mess that was left behind."

Ms. Bottoms is making the right initial moves to cope with the problems, City Council President Felicia Moore said, but fallout from the investigations and the cyberattack are "an unfortunate distraction that we are going to have to deal with."

Ms. Bottoms's spokesman, Michael Smith, said the probes and cyberattack have drawn attention away from the new administration's work to lure more businesses, mitigate the effects of gentrification on low-income homeowners and improve public transportation.

This spring, the City Council asked Atlanta's audit and ethics commissions to investigate published allegations that Mr. Reed paid out bonuses to his staff without Council approval. The probe is ongoing, and some officials have returned the money.

In addition, Ms. Bottoms hired outside lawyers to review the bonuses and explore "any avenues for restoring those funds to the city's general fund," according to Mr. Smith.

A spokesman for Mr. Reed said the former mayor didn't need City Council approval for the bonuses and they were paid out legally. He added that in light of Atlanta's growing economy and stable finances, the "bonuses were appropriate, and Mayor Reed believes that the individuals who received the bonuses were worthy of them."

Before the investigations tarnished Mr. Reed's reputation, he was popular during much of his eight years in office and credited with restoring the city's financial health. NCR Corp. opened headquarters in Midtown in January, and Porsche AG opened a $100 million U.S. headquarters near Atlanta's airport in 2015 -- a trend Ms. Bottoms is looking to continue.

Most city departments are now operational after the March cyberattack, Mr. Smith said. Files on some computers were lost, however, and investigators are trying to figure out what they can retrieve, he said.

One possibly lost file is a memo that Reed administration officials said gave legal grounds for the bonuses. The cyberattack has hampered the search for the memo -- "if it ever existed," Mr. Smith said. He added that the city so far has been able to provide all documents subpoenaed in the federal probe into bribery, including one relating to contracts at Hartsfield-Jackson Atlanta International Airport.

In March, a federal grand jury indicted Mitzi Bickers, a former city human services director, on charges of bribery, money laundering, obstruction and tax fraud. Prosecutors accused her of steering lucrative contracts to two men in exchange for more than $2 million in bribes. Ms. Bickers pleaded not guilty.

Two businessmen caught up in the investigation have been sentenced to federal prison for conspiring to pay bribes to secure city contracts. The city's former chief procurement officer, Adam Smith, pleaded guilty to conspiratorial bribery and admitted to accepting more than $30,000 in bribes. Byung J. "BJay" Pak, U.S. attorney in Atlanta, said the investigation continues.

With the probes and cyberattack consuming City Hall and the Atlanta media, Councilman Howard Shook said Ms. Bottoms must feel like a president who "after that first round of briefings, says, 'My God, what have I gotten myself into?' "

At her State of the City speech earlier this month, the mayor said, "Days in government sometimes feel like dog years."

Ms. Bottoms said her staff was reviewing policies and best practices of other cities to improve government transparency and accountability. "What has been broken must be fixed, and we will repair the trust," she said.

Regaining that trust could be one of the mayor's toughest tasks.

Kenny Costigan, 36 years old, who works in the trade-show industry, said residents want to see local government run more transparently and more efficiently.

"It seems that every time that we clear house and put in the right people, they turn," he said.

(END) Dow Jones Newswires

May 27, 2018 07:14 ET (11:14 GMT)

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