The District needs an anti-corruption top cop to prevent runaway fraud, a scathing recap of the city’s worst ever public corruption scandal has recommended.
Disparate agencies caught glimpses of what would eventually emerge as a $48 million rip-off in the city’s tax office, but none of them was working together, auditors at WilmerHale reported in their long-awaited report on the Harriette Walters tax scam. Among the 123-page report’s recommendations was the creation of an independent oversight committee.
“The [committee] should ensure that the three audit agencies address fraud risk on a District-wide level,” the auditors wrote in Monday’s report, “and that the agencies’ audit efforts are coordinated.”
Some D.C. Council officials grumbled privately Monday that another layer of bureaucracy might not help. But WilmerHale auditors hoped that city officials have “learned a number of lessons” from the scheme.
Walters has admitted to running hundreds of bogus property tax refunds through her office. The money financed a lavish lifestyle that bought luxury goods for friends, family and co-workers.
The WilmerHale audit has been a year in coming. Last year at this time, the city was trying to come to grips with how Walters, a low-level tax employee, had stolen tens of millions of taxpayer dollars over decades without anyone noticing until a bank clerk in a Maryland suburb began asking questions.
Walters has already pleaded guilty and will be sentenced next year. If a judge accepts her plea deal, she will face 15 to 18 years in prison. Most of her co-defendants have also entered guilty pleas and have either been sentenced to prison or are awaiting sentencing.
But among the lessons of the rip-off was that D.C.’s regulatory agencies either weren’t watching or weren’t listening as the scheme unfolded. The closest anyone came was when D.C. Auditor Deborah Nichols warned the finance office that property tax refunds were spiking and the matter warranted closer attention; Nichols said in public testimony that her warnings were ignored.
Embattled Chief Finance Officer Natwar Gandhi issued a statement Monday claiming that he already had overhauled his office’s internal controls after news of the scandal became public.
“We will constantly review our practices and safeguards, looking for ways to improve them,” the statement said.
