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Former Atlanta City Employee Pleads Guilty To Federal Corruption Charges

Larry Scott worked for the city government from 2002 until a week ago when he resigned. He pleaded guilty to federal corruption charges Wednesday.
Larry Scott worked for the city government from 2002 until a week ago when he resigned. He pleaded guilty to federal corruption charges Wednesday.
Credit WABE file
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Another former city of Atlanta employee, Larry Scott pleaded guilty to federal corruption charges Wednesday. Scott was charged with wire fraud and filing false tax returns. It’s the sixth guilty plea in a multi-year federal corruption investigation into city of Atlanta activities.

Scott worked for the city government from 2002 until a week ago when he resigned. He was in charge of the city’s office of contract compliance, which helps connect small, minority, disadvantaged and female-owed businesses with city contracts.

Scott allegedly did not disclose a side job at a consulting firm he helped found, Cornerstone U.S. Management Group which, according to federal authorities, helped businesses get government contracts, including the City of Atlanta. Cornerstone is tied to the brother of former Mayor Kasim Reed, Tracy Reed, but U.S. Attorney BJay Pak declined to speak specifically about any corruption allegations beyond Scott’s. According to state records, the company was dissolved at the end of August.

Per the charges, Scott didn’t tell the city about the extra job, though he knew that was required, and he didn’t report the $220,000 in extra income on his tax returns.

“We’ve been doing this for a long time, as you know the investigation has been ongoing for a while,” said Pak. “And we are continuing the investigation with a swift pace.”

The city’s former chief procurement officer is already in prison for bribery charges. Two former city contractors and two other former city employee have also pleaded guilty for a range of corruption and bribery charges.

“The position that [Scott] was in is a very, very powerful position,” Pak said. “That role is very important. It’s designated to help specific groups, that historically have been disadvantaged, to get ahead. We can’t have people who have conflicts of interest like this, who are in a compromised position exercising powerful discretion.”

Pak declined to comment on whether Scott steered specific businesses to certain contracts and said Scott could face 24 to 36 months in prison.

“Corruption anywhere, in any form, erodes public’s trust in government,” Pak said. “We will do everything we can to restore that public trust and do it in the right way, do it thoroughly, and as efficiently as possible.”

He said the investigation is moving at a faster pace, particularly as the office tries to avoid weighing down the new city of Atlanta administration.

This administration said in a statement that they are fully cooperating with authorities.

“We are disheartened by these allegations against a long-time employee,” the statement said. “While the DOJ has not shared with this Administration the names of any other employees whom may be suspected of wrongdoing, we remain steadfast in our commitment to fully cooperate with the authorities during this investigation.”

Pak suggested what the investigation uncovered would not have been very difficult for the city itself to uncover with regular audits.

“It’s unfortunate that it happened but I’m glad we’re able to close this chapter and move on from there,” he said.

CORRECTION: This report has been updated to correct the spelling of U.S. Attorney BJay Pak’s name.