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Posted at 12:43 PM ET, 12/15/2008

Council Releases Report on OTR

Update, 4:45 p.m.: D.C. Chief Financial Officer Natwar M. Gandhi said today he will adopt one of the report's key recommendations and create a new position: Chief Risk Officer.

Original post: The D.C. Council today released its investigation of the Office of Tax and Revenue's nearly $50 million scandal, saying there was no real system of checks and balances, which is what allowed Harriett Walters's scheme to flourish.

In September Walters pleaded guilty to taking more than $48 million from the District as a low-level manager in the Real Property Tax administration.

"Walter's scheme was not highly sophisticated; to the contrary, it was rudimentary," according to the report presented to the Council by Bill McLucas of the lawfirm of Wilmer Cutler Pickering Hale and Dorr LLP in conjunction with Pricewaterhouse Coopers LLP. "When we interviewed her, Walters mused repeatedly that she had been hiding in plain sight. OTR essentially had no formal policies and procedures in place to ensure the integrity of real property tax refunds."

The report also said that OTR has had a "snitches get stiches" culture, essentially one that threatened anyone inclined to blowing the whistle.

The council's investigation was one of three launched in the wake of the scandal, which came to light late last year. Authorities have since concluded that Walters had been stealing from the city for 20 years.

Council Chairman Vincent C. Gray and D.C. Council member Jack Evans (D-Ward 2) said the city has worked to create more checks and balances since last year but noted that more change still needs to be made.

Hamil R. Harris

By Marcia Davis  |  12:43 PM ET, 12/15/2008

Categories:  D.C. Council, D.C. Council

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