ATLANTA - In December 2009, nineteen days after Kasim Reed was first elected Mayor, his father, June Reed incorporated a new business. He called it Capital Plastic Recyclers.
He later opened a plant in Cheraw, South Carolina, about 5 hours north of Atlanta. Cheraw is close to the home of a family member who had recycling experience.
Though the business was in South Carolina, a FOX 5 I-Team investigation found that some of June Reed's key investors had strong ties to Atlanta government. Including a then top executive at the Atlanta airport, and a business partner of Mayor Reed, who went on to reap millions in airport contracts.
Phillip McElveen and Bob Getsinger of EZ Products in Cheraw helped June Reed get started. They both hoped to work with him. Their 100,000 square foot plant in Cheraw, takes dirty, ground up plastic, sorts it, and cleans it for resale. They hoped June Reed’s company would bring them ground up product to wash and sell.
They say they met June Reed and a group of more than ten Atlanta investors at a local restaurant in Cheraw. McElveen estimated Reed raised at least $250,000 to start his company. “From what I understood, everybody at the table that night, eleven, twelve, thirteen, people were all investors,” said McElveen.
They do not recall the names of the investors, though they say Atlanta attorney Leron Rogers was a part of the group. Leron Rogers would not comment.
One of those investors would later file a law suit against June Reed, accusing him of fraud. That investor was Lance Lyttle, who at the time was the Assistant General Manager of the Atlanta Hartsfield Jackson International Airport.
According to Lyttle’s 2011 lawsuit, June Reed told Lance Lyttle the recycling plant was "running two eight hour shifts each day and the plant was earning revenue." So, Lyttle invested $50,000 in the new venture.
Nearly a year after he made his investment, Lance Lyttle was frustrated with the lack of information from June Reed, so he decided to drive to Cheraw to see the plant for himself. According to his lawsuit, what he found was, the plant was neither operational nor generating money.
Lyttle wanted his money back and accused Junius (June) Reed of "breach of contract' and "fraud" claiming he "misappropriated funds of (Capital Plastic Recycling) for his own use."
Both Getsinger and McElveen say they knew nothing about the legal battle and find it hard to believe June Reed would cheat anyone.
“Surprises me,” says McElveen, “my opinion it was legitimate on June's part
Neither Lance Lyttle nor June Reed would respond to our requests for comment. The case was ultimately settled, as Reed was paying the money back. McElveen says around 2015 he helped June Reed sell the company to a New York Recycling company.
Back at the airport, few people knew about Lance Lyttle's legal battle with the Mayor's father. The 2011 lawsuit went unreported. In Financial Disclosure Statements filed with the city Lance Lyttle denied owning more than $10,000 in stock in "any corporation or business entity"
Edward Queen, is a professor of Ethics at Emory University. He is troubled by the lack of disclosure and that a top airport executive was investing in the Mayor's father's business. “Clearly it sets up a potential conflict of interest,” says McQueen, “some distortions in the system, that at a bare minimum ought to have been declared.”
Mayor Reed's spokesperson sent us a statement. Without seeing our report, they complained it suggests city employees and the Mayor's father have broken the law. The spokesperson wrote that is untrue. They also wrote that Dale Russell is trying to smear the administration, public employees and small business people.
Who were the other investors? No one will say. But, we know a second investor was a business partner of Mayor Reed in a real estate venture and has since won millions in airport contracts. That story Tuesday night.