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City of Atlanta Responds to WSB-TV Story on Mayor’s Youth Scholarship Program
Posted Date: 4/12/2017 4:00 PM
Mayor Kasim Reed press release header

 Mayor’s Office of Communications
55 Trinity Avenue, Suite 2500 • Atlanta, Georgia 30303

Anne Torres, Director
404-330-6423, office
404-904-2618, cell
amtorres@atlantaga.gov

Jenna Garland, Press Secretary
404-330-6612, office
404-357-5579, cell
jgarland@atlantaga.gov

FOR IMMEDIATE RELEASE: April 12, 2017

News Release

City of Atlanta Responds to WSB-TV Story on Mayor’s Youth Scholarship Program

Administration Responds to claims made by Michael Sterling

ATLANTA – Michael Sterling is not telling the truth. Our records clearly show that Michael Sterling was aware that the tax returns for the Mayor’s Youth Scholarship Program needed to be filed and were not filed. The last year the required returns were filed is 2012. 

Emails from May 2014, when Michael Sterling became Executive Director, show the agency in the process of late filing the 2013 return. For reasons only known to Michael Sterling, that return was not filed. The returns for 2014 and 2015 were also not filed.

Michael Sterling’s suggestion that filing these taxes was the responsibility of the city finance or city attorney’s office is categorically false. In 2015, Michael requested permission from the city law department to engage outside counsel at Alston & Bird to assist the agency’s legal needs, including the need for specific 501c3 expertise that a municipal law department would not have. Emails provided show regular conversation between the agency and the law firm from July 2015 through September 2015 regarding the required tax returns. From the Administration’s perspective, this was an executive failure on the part of the then-Executive Director, Michael Sterling.

Within weeks of the appointment of Melissa Mullinax as the interim Executive Director, the issue was uncovered and steps have been taken to correct the situation. We have engaged outside legal counsel and accounting support to file the back tax returns and request reinstatement of the tax-exempt status retroactive to May 18, 2016. There are eight donors to the fund that made contributions after the tax exempt status was revoked. If the retroactive status request is denied by the IRS, we will work with those donors to correct the records.

Despite the lackluster fundraising during Michael Sterling’s tenure and his operational failures, the financial commitments to the scholarship students were met each and every year.

Mayor Kasim Reed is committed to this scholarship fund and the almost 100 students it serves today. He made a personal contribution in April of 2016 of $97,345 and his annual golf tournament raises more than $300,000.

This program is vitally important. We have made significant changes to the operations, including moving the program under the Mayor’s Chief Services Officer for improved operational efficiency and transparency. Through a ticket surcharge on concerts at  Chastain Park, the Mayor and City Council have secured a dedicated revenue stream for the future. 

Lastly, as soon as we secure the tax-exempt status, the Mayor will begin an aggressive fundraising campaign to ensure the long-term viability of the scholarship fund.

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For more information about the City of Atlanta, please visit http://www.atlantaga.gov or watch City Channel 26. Follow the City of Atlanta on Facebook and Twitter @CityofAtlanta. Follow Mayor Reed on Facebook and Twitter @Kasim Reed