Cover Story: Inside the scandal

Joseph Reid is not a saint.

He's not the devil either.

The city's former deputy chief operating officer now sits in the moral no man's land of an informant — suspected and prosecuted by law enforcement, hated as a traitor by former friends against whom he may testify.

Unless the improbable happens and the people recently indicted in the federal government's City Hall corruption case — Spectronics Corp. executives Vertis McManus and Dorothy Rollins, and Atlanta officials Larry Wallace and Herb McCall — finagle plea agreements, Reid will be called to provide eyewitness testimony to the most serious elements of the case against the four.

From the prosecution's — and his own — perspective, he's doing the right thing, accepting responsibility and showing contrition for his crimes, albeit too late to save himself embarrassment, derision and possible jail time.

"They're telling me it's going to be war," Reid says, referring to what his lawyers have told him to expect from the defendants and their attorneys. He puts the emphasis on the word "war" and chuckles to himself at the end of the sentence.

It's not laughter. It's nervous resignation, a sound he made with increasing frequency as prosecutors turned up the pressure on him, and it became clear what he would have to do. Reid, 51, knows he will be called an Uncle Tom, a conspirator in an investigation decried as racist by allies of Mayor Bill Campbell.

At the very least, he will be labeled an opportunist, a newly convicted felon. Critics will call Reid greedy for the payouts when he felt he could score them. And, they'll say he's now grasping to save his own skin after the cash spigot shut down. You can practically hear the defense attorneys sharpening their teeth.

Reid's life is in its third act. The curtain closed on the opening with Reid in drug rehab, but he beat the addiction and went on to find redemption in setting up and eventually directing Atlanta's $250 million empowerment zone, only to compromise his values, resign from his job and now take on the role as key cog in what is guaranteed to be the biggest political corruption case in the state in a decade.

In person, Reid is garrulous and effusive, smokes menthol cigarette after menthol cigarette, and talks like a likeable blowhard.

When he speaks about his desire to help poor people, it's clear he's not just mouthing words. Reid knows the people on the street, their stories, and they know him. His interaction is genuine, and there is none of the uneasy, class-defined patter one might expect from a person who has enjoyed the wealth and power Reid has.

Yet he admits that he fell in love with himself as a powerbroker, as a part of the City Hall flow of money and power. He loved the game of millionaire executives chasing multimillion dollar contracts.

Seen with a dispassionate eye, his crimes aren't particularly surprising for someone who grew up with nothing, and the prosecution will try to show that Reid worked in an atmosphere of corruption. That culture appealed to the darkest parts of a decent man who wanted to be recognized by the powerful and self-interested.

Lancaster, a rise and a fall
Reid grew up in Lancaster, S.C., about 45 minutes south of Charlotte, the kind of scrubby town people most often move away from and don't return to. He was the fourth of 14 children born to a father who worked as a laborer in the local foundry. The children slept in bunkbeds, head-to-toe. There were times that he had to walk door to door, asking for handouts.

"I know about being poor," he says. "I can sympathize with people on the street."

His mother would earn extra money by cleaning the house of a local white family, the Barnetts. This menial job for his mother became a bit of providence for Reid. He read his first book in their house, and had it not been for Ruth Barnett, he would not have gone to college. It wasn't a priority to his parents and there were no footsteps to follow.

"She took us in as a mission and took me in as a member of the family," Reid says. "It had a profound impact on me."

After high school, Reid got his bachelor's degree from Johnson C. Smith University, went on to study law at North Carolina Central University and the University of Georgia before dropping out to attend seminary. He became an ordained Presbyterian minister in 1983, and was elected to the school's Student Christian League before serving as what he believes was the first black campus minister at UGA.

But it wasn't preaching that Reid was interested in. He says serving others is integral to serving God. "It's social gospel, and that was my motivation for going to seminary," Reid explains.

So Reid got involved in community development and fund raising for the national body of the church.

It was in this life, jetting from city to city, meeting wealthy and powerful people, that Reid first ran into trouble. He started drinking heavily, and the drinking led to crack cocaine use. In 1989, Reid wound up in drug rehabilitation.

In rehab, Reid says his counselor told him to stay away from high places. Pun aside, the guy was making a serious point. He was saying that power and money would bring out his character flaws, Reid says. And that's not an unexpected outcome for a man who grew up having to beg for food.

"He was saying that I can overextend myself and sacrifice values to get from 'a' to 'b'," Reid says. "He said, 'It's a setup for you.'"

Once Reid got clean, he spent a year as a VISTA volunteer working with drug addicts in Athens, moved from there to become the first director of the Department of Human and Economic Development for a unified Athens/Clarke County government. He succeeded in both ventures.

"He was an aggressive pursuer of resources," says then-Mayor Gwen O'Looney. "[Reid] ... wants to make a difference in the lives of people who are less fortunate." If anything, he started too many programs, initiatives that were too big for the county, says O'Looney, the current director of Clarke's Department of Family and Children Services, but he left the county in a better position than it was prior to his arrival.

Before Reid entered office, Athens/Clarke County's annual Community Development Block Grant allocation was less than $1 million and by the time he left, it was $5 million.

Certainly, though, Reid was "personally ambitious," O'Looney says. And that's probably why he left Clarke County in April 1994, after having been, as he says, "recruited by the mayor," to put together Atlanta's application to become a federal empowerment zone.

The application succeeded, and Atlanta became eligible for $250 million in federal block grants and tax incentives. That money was supposed to be used to improve, through job training, housing and social services programs, the lives of people living in the poorest sections of the poorest cities in America. The city was one of six in the country to win the designation.

But in December 1995, when it came time to name an empowerment zone director, Reid was passed over for the job by Mayor Campbell and the zone's board. They chose Paul White, a bureaucrat from Gainesville, Fla.

There was disagreement on the board about the choice, and Reid's detractors said that his ego had grown too big for the position.

State Sen. Vincent Fort says about Reid's arrival on the Atlanta scene: "He came on preachifying and praying. [He] had the feel of oil about him."

But Reid thought he had a lock on the job. After all, it would be difficult to find many people who knew more about empowerment zones.

Reid felt whipped and betrayed after White was chosen, and he didn't hold an official job or city responsibility. Most people, given a definitive vote of no confidence by the mayor — his boss — probably would have left the city. Reid wouldn't, and in a show of either incredible moxie or amazing hubris, Reid moved himself into an office on an abandoned floor in City Hall East and had business cards printed up that said "Assistant to the Mayor."

Campbell consented to the job title, but "he never really gave me any kind of assignment whatsoever." At his new, self-created, $72,000-per-year job, Reid busied himself working deals he had been involved with in the empowerment zone. All the while, he says he was trying to figure out a way to return to the City Hall power structure, claim the zone post he coveted and restore his stature and dignity.

That opportunity came along in 1997, in the form of Campbell's re-election campaign. Reid had raised money for the Presbyterian Church, and had done similar work setting up the empowerment zone. He says Campbell asked him to raise $20,000 for the campaign. Reid agreed if he could give the money directly to Campbell, a sign of loyalty. After the empowerment zone fiasco, he says he didn't trust members of Campbell's inner circle. He didn't want their hands to touch his chance at redemption.

Reid claims he raised close to $300,000 for Campbell's election, a figure corroborated by another key actor in the campaign.

McManus and the election
Reid says he met Vertis McManus, vice president of Spectronics Corp., in early spring 1997, at the recommendation of then-Deputy Chief of Staff and current Campbell spokeswoman Glenda Blum Minkin. McManus had been a contributor to Campbell's 1993 campaign and "needed help with special projects" he wanted to do with the city, according to Reid.

McManus spent money freely and had connections with powerful political figures. The relationship between McManus and Reid became more complex than your typical city official-vendor relationship, and Reid says the executive wooed him. McManus quickly took him into his confidence and sought to impress Reid with his close ties to the Campbell administration and prominent figures such as Jesse Jackson, and the scope of his business, which included ventures in Louisville, Cincinnati, Washington, D.C., Jamaica and Liberia. The pair developed something of a friendship, and it was through McManus that Reid met his wife-to-be in the fall of 1997.

During this same period, McManus and his partner, Spectronics CEO Dorothy Rollins, also began donating thousands of dollars to the Campbell campaign.

"I became aware that Vertis could be called upon by the mayor's office to give considerable funds ...," Reid saysin a written recollection. When there was a fund-raising party, they were invited.

According to McManus' federal grand jury indictment, the pair could indeed be counted on for cash. The feds allege that McManus and Rollins contributed at least $25,000 to Campbell's campaign, making the donations under the names of six Spectronics' employees and five of Campbell's relatives. Each time, Rollins cashed checks — from a personal account and from Spectronics — to make the contributions, the indictments indicate. Chief Operating Officer Larry Wallace allegedly provided Reid with the names of Campbell's relatives, which he turned over to Rollins.

But the money didn't come without strings. In 1999, Spectronics received a $103,590 "re-seller fee" from the city as part of a contract for financial software with the Oracle Corp. It's unclear that Spectronics ever did any work to merit the payment. Federal prosecutors also will seek to prove that McManus used the allegedly dirty donations and his relationship with Reid to convince the city to coerce MediaOne — then the city's cable TV provider — to settle a dispute between the two companies. Spectronics and MediaOne later settled the dispute "on or about Oct. 6, 1997," according to the indictments. Reid says the settlement netted Spectronics more than $1 million.

McManus admitted in federal court in 1998, to using similar tactics in a contract with a Louisville company, according to published reports. In that case, McManus paid $56,000 to a member of the city's Board of Aldermen, while the company with which Spectronics had a dispute was in contract negotiations with the city. The alderman, Paul Bather, was later censured.

But fund-raising aid wasn't the only way McManus was trying to buy Reid's influence.

"I was uniquely aware that I could go to Vertis or Dorothy and get cash money if needed," Reid says in a written recollection. "They both indicated to me, together and in private, that they would help me if needed in any way they could."

In September 1997, Reid needed help. Surrounded by people with political and financial power far greater than his own and millions of dollars in contracts that seemed to have more to do with who people knew in Atlanta government than the merits of the companies, it's not surprising that Reid was living beyond his means at the Grand Condominium Apartments on 14th Street. At the same time, he was busy paying off college loans and supporting his then-girlfriend and her two adopted children.

McManus and Rollins allegedly came up with a plan Reid says assuaged his guilt about any potential conflict of interest. McManus set up a contract with Strong Day, an Athens treatment center Reid established, and paid $19,500 to the facility. Richard Williams, the president of Strong Day's board of directors, then turned the money over to Reid in a series of checks written in late 1997 and early 1998, copies of which have been obtained by CL.

Reid rationalized taking the money under the premise that it was payment due him for the volunteer work he did establishing Strong Day. His friendship with McManus fueled the rationalization.

Reid now says that the gambit made the payments look like an elaborate scheme to accept a bribe, and in the end, its paper trail would make his prosecution by the feds a slam dunk.

"In reality ... my true intention was to receive money to address my own needs," Reid says.

It's more than a bit of a stretch, though, to think McManus could have purchased Reid's undying loyalty and influence within City Hall for $19,500. Reid says. The more powerful promise was future employment.

"He had already said that after I leave government, I had nothing to worry about," Reid says.

According to the government, Reid wasn't the only one looking for a little piece of Spectronics' obligation-laden dough. Wallace, 52, allegedly accepted $43,000 from McManus and Rollins. That included a 1998 gift of $25,000 that McManus slipped to Reid in an envelope underneath a table at the Taqueria Guadalajara on Buford Highway. Reid then passed the money to Wallace, according to the indictments and information obtained by CL. In November 1998, Wallace allegedly received the balance — $18,000 — from Rollins after his personal banker, the branch manager of the Lakewood branch of SunTrust Bank, Denise Hardin, helped the pair engineer a series of transactions to get around federal banking laws.

Reid says he introduced Wallace to Hardin, but she is not named in the indictments and is not being prosecuted in the corruption investigation. Hardin, who still works for SunTrust, referred CL to her attorney, Seth Kirschenbaum.

Kirschenbaum would not answer questions about the alleged transaction. He issued this statement instead: "Denise Hardin only has a professional interest in the banking activities of her clients. We can't speak for the motives of others but can state that Ms. Hardin has always striven (sic) to conduct herself in a lawful and honorable fashion."

But Reid's plan to ingratiate himself to Campbell by raising money for the campaign appeared to work. During the Christmas holidays in 1997, Reid says he went to Campbell's house in Inman Park to ask for the empowerment zone director's position, and he made sure Campbell remembered the campaign money.

The mayor was less than grateful.

"He told me, 'If I can't find anybody else to do the job, I'll give it to you,'" Reid says. "Of course, he couldn't find anybody else."

And Reid had good timing. White, who had been selected to head the zone, was busy running it into the ground. It was supposed to cost $10 million to administer the Empowerment Zone during its 10-year life, but in three years, White blew through the $4 million the City Council allocated to cover a portion of the zone's costs, and he never lined up the $6 million in private sector funds that was supposed to cover the balance of the decade.

At the same time, White couldn't get the zone's act together to actually spend money on programs to benefit the community. White failed to use virtually any of the $150 million in tax incentives. He left office in January 1998, at the same time three separate federal audits, spawned by allegations of mismanagement and malfeasance, commenced.

Reid became the empowerment zone's director July 13, 1998, after a brief stint as an acting chief.

And he did a decent job. In fact, a massive audit of the zone done by APCO Associates Inc. and commissioned by the city but never made public indicates that Reid brought the zone back from the brink of insolvency. In one of its key findings, the January 2000 report obtained by CL says that "over the past 18 months," the period during which Reid assumed control of the zone, "there has been considerable improvement in the [empowerment zone's] review and approval process ... ." During his tenure, several of the city's most important economic ventures began — the construction of the North Yards Business Park, the approval of $12.4 million in loans to revamp the Pryor Road corridor and the purchase of the property that is slowly becoming the Historic Westside Village in Vine City.

Reid left the zone in April 2000, and a number of the projects started under his administration are still far from finished.

The FBI and questionable representation
Reid says Dewey Clark turned the feds onto him. Clark, a man who for six years lived in Campbell's basement and later would go on to work for a strip club owner and turn evidence for the feds, identified Reid as a top campaign fund raiser and a facilitator of city deals.

During the summer of 2000, a man named Jerry Free began calling Reid. Free claimed to have a contract pending with the department of public works and to have made contributions to Campbell's 1997 campaign. He also pressed Reid for what he needed to get his new company doing business with the empowerment zone. Reid says he told Free over and over that there was no connection to money and contracts but did inquire about future employment and advised him to hold a fund raiser for the 2000 presidential election, for which Reid was raising money.

"I mostly pretended to be helpful to Mr. Free as encouragement for him to help with the fund raising I was trying to do," Reid says.

Reid met with Free three times, twice in New York and once at the Sundial Restaurant in Atlanta. Each time the conversation was the same, and Reid says he became suspicious of Free. Turns out he was right to be suspicious. Free was wearing a wire for the FBI. At their last scheduled meeting at a lounge in Hartsfield International Airport in June 2000, Free didn't show up but two FBI agents did. Reid says they proceeded to question him, told him he wasn't a target, that they were investigating Free. Reid, without a lawyer and admittedly intimidated, talked to the agents for three or four hours. They wanted to know about the mayor.

"I didn't feel like I had anything to hide," Reid says, illustrating the depths of his rationalization. "In hindsight, it was stupid" to talk to the feds without an attorney.

About one month later, in July 2000, Reid heard from investigators again. They wanted to meet, and advised Reid to find a lawyer. Reid was apprehensive about talking to the U.S. Attorney's Office, but he didn't think he had to fear prosecution.

Still, Reid proceeded to make a series of ill-advised decisions. From a tactical legal standpoint, they would leave him with little choice but to plead guilty to some charges. First, he went to Michael Coleman, the mayor's lawyer. Coleman told him to talk to Kevin Ross, the mayor's former campaign manager. The choice of Ross, the mayor's former campaign manager, made sense, but Coleman obviously didn't know that Ross was already talking to the feds.

Reid and Ross have known one another for 10 years, and Reid considered him a friend. Ross, a partner with the law firm Hunton & Williams, recommended David Geneson, another Hunton & Williams partner and former federal prosecutor. Geneson is Ross's own attorney in the investigation.

Geneson, Reid and Assistant U.S. Attorneys Sally Yates and David Nahmias began meeting in the summer of 2000. Over the next year, they would meet at least seven times. But on Sept. 25, 2001, the U.S. Attorney's Office wrote a letter to Geneson that illustrates what a naive choice Reid had made by involving Ross and Geneson.

Nahmias writes that his office anticipated calling Ross to testify before the grand jury about the Oracle-Spectronics contract — source of the "re-seller's fee" — the mayor's re-election campaign and Reid. Ross was the attorney for Oracle in its software deal. He is alluded to in the indictments, because his "discussions with senior city officials reinforced Oracle's understanding that it needed to team with Spectronics if it wanted to obtain city business." But Ross is not being prosecuted, and he says that contrary to rumor, he does not have an immunity agreement.

"Because Mr. Reid has declined our proposal for resolving the case against him and may be charged with offenses, as to which Mr. Ross would be a government witness," Nahmias writes, "your representation of both men appears to present a conflict of interest."

Surely Ross and Geneson knew that there was a potential for a conflict. The U.S. Attorney's Office probably knew, too. Ross says Reid was a friend, and that there was no master plan behind introducing him to Geneson.

But Reid introduced Ross to Oracle, so it goes without saying that Ross would have liked to know what Reid was telling prosecutors. Having him represented by a partner with the same law firm makes finding out what's being said much less difficult. Ethically, the pair could discuss the case. When Reid engaged Geneson, he also engaged Geneson's law firm.

On its face, though, the arrangement seems damning, and it raises serious questions about the effectiveness of Reid's counsel. After all, who stands to get better representation — a fellow partner or a mid-level city official?

In response to the letter from Nahmias, Geneson replied in a Sept. 28 letter that he was in the process of finding Reid new counsel. Here's where the situation becomes even more perplexing. Geneson's billing records to Reid from Sept. 20 and 21 show Geneson arranging new counsel for Reid in a conference call with the potential attorneys and Ross — the man who was in a position to testify against Reid. The calls lasted more than three hours, and Geneson charged Reid more than $1,400 for the work. (Reid did not employ the attorneys.)

At this point, Reid had given up enough information that, when combined with the U.S. Attorney's Office's investigation of him, conviction was inevitable. What's more, Reid had been separated from his counsel, Geneson, because of the conflict.

Reid knows his guilt, and from the time CL began talking to him more than five months ago, he never attempted to hide it. But the legal maneuvering and his own naivete made his next choice a difficult but obvious one.

One end, one beginning
On Dec. 11, Reid walked into federal court accompanied by his new lawyers, Bernard Taylor and Joe Whitley, and pleaded guilty to one felony count of conspiracy to accept a corrupt payment.

It isn't advisable for Reid to speak with the press but in a last comment for this article, he said about the secret hearing before Judge Richard Story: "I've never felt as bad in my life. It was devastating." On Wednesday, his attorneys issued a statement that explained his contrition.

"I sincerely apologize to the people of Atlanta for my actions," the statement reads. "I know that I have disappointed you. Words cannot express how sorry I am."

Reid feels those sentiments — for his city and for himself — and as the pressure mounted to accept a plea, the strain showed. He wouldn't talk on his cell phone or even meet at an out-of-the-way restaurant for fear he was being wire-tapped or followed. Reid has a 28-year-old wife and two young children. She didn't want him to back down and join a prosecution that was more than prepared to go forward with the case against him just two weeks ago.

"She wants me to fight it," Reid said at the time. He didn't have the money or the moral conviction to do it.

Now Reid must fulfill his obligations to the U.S. Attorney's Office and the city of Atlanta. His sentencing will depend on how well he plays that role. He also has written a letter to the Presbyterian Church acknowledging his guilt, admitting his "immoral, illegal and unethical actions." He may be disciplined by the church as well.

Reid is rankled by the perceived hypocrisy of defense attorneys trying to shift the focus away from their clients by calling into questions his truthfulness and loyalty. And he knows his performance in the coming months will determine where the curtain opens on the next scene.

"This is not an act where I'm trying to save my ass," Reid says. "I'm not trying to get anybody. I'm just going to tell the truth, admit my part and take whatever punishment comes my way."

kevin.griffis@creativeloafing.com??