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D.C. tax office has long history of trouble

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Local,DC,Alan Blinder

For the District's chief financial officer, trouble in the city's tax office -- including criminal charges of theft of taxpayer money against employees -- is nothing new.

While Natwar Gandhi has won praise in Washington and on Wall Street for his work to rehabilitate the District's financial fortunes, his management skills have come under fire in recent years.

Most of Gandhi's high-profile troubles have stemmed from the Office of Tax and Revenue, including the 2007 arrest of Harriette Walters, a longtime employee.

Walters acknowledged that she had claimed $48.1 million in fraudulent tax refunds during her career in the office. The theft remains the largest in the history of the District government and prompted Gandhi to promise new reforms.

While the Walters episode attracted the most scrutiny, other personnel crises have also roiled the tax office, including a $400,000 theft by another employee. In March, a federal judge sentenced that worker to a two-and-a-half-year prison term.

More recently, Gandhi's office faced questions after a series of media reports about undisclosed audits, the qualifications of the city's chief tax appraiser and the agency's use of pre-employment background checks. Mayor Vincent Gray has urged Gandhi to rework his office's procedures, something Gandhi said he would consider.

The latest troubles also forced the chief tax appraiser, Tony George, to resign, along with Gandhi's top internal watchdog, Bill DiVello.

Gandhi has also endured criticism for his handling of the controversial D.C. Lottery contract, a deal that is the subject of a federal investigation, and an embarrassing episode in which his general counsel wasn't a lawyer and ultimately stole $250,000 from the city.

Despite all that, he has retained the confidence of top policymakers, including the mayor.

Pressed by the local business community, Gray appointed Gandhi to a new, five-year term earlier this summer, and he has said he has no plans to try to push Gandhi out of government. Ward 2 D.C. Councilman Jack Evans, whose committee oversees Gandhi's office, has also stood by the CFO.

After learning of the latest scandal on Tuesday, Gray said he wanted to hear more from Gandhi about how he wants to overhaul the office.

"What is it that's going to prevent these things from happening?" Gray said. "Is it a better system of automation? Is it different people working in there? I think that's what I want to hear from Dr. Gandhi."

ablinder@washingtonexaminer.com

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