Barras: D.C. tax office needs real oversight

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Local,DC,Jonetta Rose Barras

"We believe we have an obligation to the citizens of the District to protect against unwarranted claims against our precious tax dollars." That's what Attorney General Irvin B. Nathan said recently when asked about the city's failure to settle a lawsuit filed by Eric Payne, a whistleblower whose prime crime seemed to have been his fidelity to D.C. procurement rules.

But, Nathan's fight-rather-than-settle-tax-protection principle has been applied selectively. It wasn't used when the Office of Tax and Revenue decided this 2012 fiscal year to reduce by $2.6 billion the value of 500 commercial properties, causing the city to forego more than $48 million in revenue, according to the Washington Post. That action came without any scuffle between the District and property owners before the city's tax appeals board or the D.C. Superior Court, as is customary.

OTR Director Stephen Cordi said litigation would have been costly. Besides, the agency's actions essentially produced results comparable to those in previous years.

Back then, folks didn't look behind OTR'S closed door to witness the party favors given the city's commercial property owners. After all, in 2008 and 2009 we were too busy grappling with the revelation that an OTR mid-level manager had embezzled $50 million of the public's money. Last year, we learned another employee stole $400,000. We also discovered that in 2007, following orders by Chief Financial Officer Natwar Gandhi, officials stopped collecting taxes on certain refinanced commercial real estate transactions, as mandated by law, possibly costing the city $100 million.

OTR has serious problems. It can't protect collected revenues; won't collect certain taxes -- despite the law; and won't squeeze big commercial property owners because they have a phalanx of lawyers who are doing their best to protect their clients' income.

D.C. Councilman Jack Evans, whose committee has oversight of OTR, told me he is "worried about" the reductions. He said Gandhi has promised to provide a detailed explanation. If that is insufficient, Evans said he will hold a hearing when the council returns from summer recess.

Interim council Chairman Phil Mendelson said he wants to "get to the bottom" of the spike and supports holding a hearing to get information "on the public record for everyone to hear." He also said the "issue about the accuracy of assessments has been around a long time. We would be well served to get that resolved."

Stunningly, Gandhi -- the person with ultimate control over OTR and its operation -- told the Post he didn't even know about the increase in the valuation reductions. No one expects him to know everything. But shouldn't the decision to write off $2.6 billion in assessments have passed his desk?

Gandhi said the amount is minuscule, considering the $246 billion overall tax base. He offered the same "it's-not-that-much-money" argument after learning about Harriette Walters' historic $50 million theft. Then, a bank clerk alerted the FBI to the embezzlement. Gandhi learned about it from them. Last week, he learned about the assessment issue from reporters.

What else doesn't he know?

Jonetta Rose Barras can be reached at jonetta@jonettarosebarras.com

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