Natwar Gandhi has gone from chief financial officer to croupier. Working in near secrecy in 2010 with at-large Councilman Michael Brown, the CFO facilitated a controversial plan to implement Internet gambling in the District — despite his written analysis raising fiscal and legal questions about the proposal.
In that analysis, in the form of a May 25 memorandum to Brown, Gandhi projected collecting only $243,750 from online fantasy sports in 2011. From 2011 through 2014, he estimated, cumulative revenues would total $2.4 million.
Gandhi refused to speculate at that time about future revenues from other games such as poker and bingo. For those games, he wrote, the District needed to secure an amendment to the federal law banning gambling in the nation’s capital, according to the memo provided to The Washington Examiner.
Several council members told me they never saw that document.
David Umansky, the CFO’s spokesman, confirmed to me that the memo was “developed at Councilman Brown’s request.” “Memos of this type,” he said, “are prepared for members considering legislation and are provided only to the requesting member.”
A fiscal impact statement was made “available” to all council members in December, Umansky said.
But without the May analysis, legislators were vulnerable to being duped. They wouldn’t have known the December statement contradicted Gandhi’s earlier assessment. For example: In May, he refused to provide revenue projections for poker and bingo games unless there was an amendment to the federal law. In December, he incorporated potential revenues from those games in his projections although no such amendment had been approved.
That shift painted a rosier portrait of Brown’s proposal: Potential earnings for 2011 to 2014 shot up from $2.4 million to $13.1 million.
“If you listen to him tell it, he doesn’t get involved in policy,” said at-large Councilman David Catania. “He’s not just guiding it, he’s directing it. He has cleverly used his perch to be the 14th member of the council.”
Gandhi wasn’t the only cunning fellow in the gambling scheme, which, thankfully, has been delayed. Brown was shrewd as well.
Instead of introducing his Lottery Modernization Act in May, Brown waited until December, claiming it would help close a 2011 budget gap. But, in fact, the CFO had projected in December that in 2011 “marketing costs could exceed revenues to the Lottery Board.”
Neither Brown nor the CFO seemed to care. Besides, Brown was in a sweet spot: His political ally, Vincent Gray, was both mayor-elect and council chairman, giving him a virtual political monopoly. Few legislators seemed ready to challenge him. After all, Gray soon would control the levers on services and contracts; crossing him could make life difficult.
Interestingly, in December, as news reports have indicated, Gray and his mayoral transition team were busy placing family, friends and general cronies on the government payroll. In some instances, they violated city personnel rules in the process. Gandhi’s and Brown’s deceptive maneuvers were consistent with that unethical culture, which has since tainted the District’s image.
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
