Independent auditors warned earlier this year that conditions in D.C. Chief Financial Officer Natwar Gandhi’s operation were ripe for theft. That’s exactly what happened. Federal officials last week charged Mary Ayers-Zander, an employee in the city’s Office of Tax and Revenue, with stealing $414,800. The CFO’s shop has become a sieve.
Sources inside and outside government said Gandhi can’t prevent theft because his Office of Integrity and Oversight, the unit that conducts investigations and audits, is in disarray.
“There are a ton of issues within the OCFO,” said one source who, like others, requested anonymity.
“[The OIO] is dysfunctional and corrupt,” Karen Coles, a former senior investigator for the CFO, told me.
“[It] has no oversight mechanism and performs as it chooses. No internal policies and procedures are abided by, allegations of fraud, waste, abuse and employee misconduct are covered up,” she wrote in a Sept. 2 letter to Paul Lundquist at the Office of Management and Administration, a copy of which was obtained by The Washington Examiner.
For example, in February, Charles “Butch” Fultz, an OIO supervisor, allegedly breached protocol by alerting the head of OTR’s customer service unit that she and her managers were under investigation. Coles said she reported Fultz to OIO’s director, William DiVello; nothing happened.
Coles also painted a portrait of an unprofessional environment: profanity is used routinely, and male supervisors fraternize with female subordinates. She filed a complaint with the Equal Employment Opportunity Commission in March. In August, she was fired. She’s appealing that decision.
Natalie Wilson, a spokeswoman for the CFO, dismissed Coles’ allegations as an “attempt to retaliate.”
This much is indisputable: Poor controls in the CFO’s operation have resulted in massive and continued theft of taxpayers’ money.
It started in 2001. That’s when the CFO discovered that his general counsel, Saamir Kaiser, didn’t have a law degree. Gandhi didn’t fire him. Instead, Kaiser gained signatory authority over the city’s tobacco settlement account. He eventually stole $248,105, according to the D.C. inspector general.
About the same time, Harriette Walters, a midlevel OTR manager, started embezzling tons of money. Between 2001 and 2007, she reportedly stole $48 million.
Gandhi subsequently pledged to prevent future thefts. Ayers-Zander, however, already was allegedly sending the public’s money as tax refunds to her personal bank accounts. She carried out her scheme between 2007 and January 2011.
Coincidentally, on Jan. 27, 2011, KPMG auditors wrote that “deficiencies [at OTR] increase the risk that inappropriate refunds may be issued.” At the time, CFO spokesman David Umansky dismissed those findings: “OTR’s systems are replete with redundant controls aimed at preventing fraud.”
There also have been multiple thefts at agencies where Gandhi surrogates were supposed to be protecting the money.
Gandhi said last week he was pleased that “internal controls we established in recent years, and the vigilance of the tax and revenue staff, detected this [Ayers-Zander] breach.”
Here’s what is confusing: If Gandhi’s safeguards were working as designed, why wasn’t Ayers-Zander caught in 2010 or 2009? What was so special about January 2011?
Perhaps those independent auditors know.
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
