When Congress created the independent chief financial officer for the District, it wanted to ensure the city had a balanced budget, collected its revenues, paid vendors on time and generally better controlled its money. Federal officials never envisioned a finance manager who would ignore or revise established laws. Natwar Gandhi apparently has done just that. According to a recent report by D.C. Attorney General Irvin B. Nathan, the Office of Tax and Revenue, part of Gandhi’s $131 million operation, stopped collecting in 2007 a recordation tax as proscribed by the 2000 Tax Clarity Act, possibly costing the city millions of dollars in lost revenues.
“OTR’s 2007 decision to change its interpretation of the law was based on review and analysis by OTR legal staff,” said CFO spokesman David Umansky.
The issue of Gandhi’s handling of the Tax Clarity Act surfaced earlier this year, when two local lawyers claimed he failed to implement it as written. Gandhi initially said the measure was unclear; that seemed to contradict the fact that in 2001 his office issued two memoranda alerting the public to the law and its effect on refinanced loans for commercial real estate.
At-large D.C. Councilman David Catania had requested the report from Nathan and the council’s general counsel, V. David Zvenyach, to determine whether the law was ambiguous; it wasn’t, they said. Nathan said it appeared Gandhi had implemented the Clarity Act, as written, from 2001 through 2007.
It’s unclear why OTR lawyers decided to reinterpret the statute. But if there was a problem, Gandhi was obligated to take his concerns to the council — the only local government entity authorized to change District laws.
He didn’t alert legislators until this year. Gandhi has since done what he should have done in 2007 — submitted a request to amend the law.
“He believes he is all-powerful,” said Catania, calling Gandhi’s decision to stop collecting the tax a “control board-esque act. [He’s] nothing but a control board relic.”
Umansky said the CFO’s role is “clearly defined by the Home Rule Act. And Dr. Gandhi operates within those boundaries.”
Gandhi’s apparent unilateral decision to stop complying with an existing law provides fodder for those critics who already characterize him as imperial and impervious. For my taste, he spends too much time playing politics and not enough focused on improving the internal operations of the city’s financial management system. But, politicos and others with whom he has ingratiated himself have helped fashion his Teflon armor.
Councilman Jack Evans, whose Committee on Finance and Revenue has direct oversight of the CFO, had already scheduled a public hearing to consider Gandhi’s request to amend the Clarity Act. “[Now], when that takes place, I will examine the actions taken by the CFO in 2007.”
Don’t expect too much. Gandhi’s friends in high places aren’t going to allow him to be taken down just because he overstepped some boundaries or won’t do his job.
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
