ATLANTA — Channel 2 Action News has learned that federal prosecutors have served grand jury subpoenas on the City of Atlanta and the Fulton County DA’s Office.

The subpoenas are seeking records related to hundreds of thousands of dollars funneled from the city to the D.A.'s Office, most of which supplemented the pay of District Attorney Paul Howard.

This is the first clear signal that federal authorities are investigating the arrangement which is already the subject of a GBI criminal investigation.

Channel 2 Action News and the Atlanta Journal-Constitution first reported in April that Howard, frustrated with his then-salary of $158,000, approached then-Atlanta Mayor Kasim Reed in 2014 with a proposal to increase Howard’s salary.

Howard complained that he hadn’t had a pay raise since 1999 and was earning less than top prosecutors in cities such as Los Angeles and New York City as well as less than some prosecutors in Georgia.

The city arranged for two payments to the Howard’s office of $125,000, one in 2014, a second in 2016. The money passed through the district attorney’s office and then into a non-profit called People Partnering for Progress which Howard had helped to found and for which he was CEO.

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PPP eventually paid Howard $195,000 of the money that came from the city.

Jessica Cino, a law professor at Georgia State University, reviewed the subpoena sent to the city.

“It looks like right now the federal authorities are laser-focused on a short window of time and few transactions that fall within that window," she said, adding they could make broader demands later.

Georgia Attorney General Chris Carr requested the GBI investigation after Channel 2 investigative reporter Richard Belcher and AJC reporter Bill Rankin revealed the payments.

The U.S. Justice Department’s Public Integrity Section in Washington served the subpoena on the city Aug. 31 requesting records by Oct. 6. It’s not clear when the D.A.'s office received its subpoena.

A spokesman for BJ Pak, the U.S. Attorney for north Georgia, told Channel 2 that Washington is handling the investigation because Pak’s office is defending the government against a civil suit filed by Paul Howard’s office. The spokesman said it is “not an actual conflict but might have the appearance of a conflict.”

A city spokesman said Wednesday the city will cooperate but declined further comment.

Howard issued a statement in which he acknowledged receiving a subpoena and called the payments “completely lawful.”

“I will fully cooperate with this investigation and am confident my actions do not violate any state or federal law,” Howard said.

At the outset of the GBI investigation, Howard told Channel 2 Action News he expected to be “fully exonerated.”

A spokeswoman for the GBI told Belcher that “GBI agents are working closely with USDOJ.”

Asked if there is now just a single investigation, Nelly Miles emailed, “We are coordinating efforts, but there is a still a separate state investigation.”

Cox Media Group