D.C.’s CFO Natwar Gandhi to be renominated, officials say

Mayor Vincent C. Gray will nominate Natwar M. Gandhi in the coming days to an additional five-year term as the District’s independent chief financial officer, according to two city officials briefed on the announcement.

The renomination will come with only two weeks remaining in Gandhi’s current term and ends months of speculation over whether Gray (D) would stick with the self-styled “bean counter,” who has served as CFO since 2000.

Gandhi maintains deep support among the business community and the District’s congressional overseers but has presided over a number of embarrassing episodes in the city finance office — most notably, the 2007 revelation that a mid-level tax office employee stole nearly $50 million in city funds and controversy surrounding the city’s lottery.

Spokesmen for Gray and Gandhi declined to comment Thursday.

Gray could announce his choice as early as Friday as pressure from Gandhi’s supporters and detractors to make a decision has grown and as political scandals have siphoned the attention of city officials. Most recently, Kwame R. Brown (D) resigned as D.C. Council chairman last week before pleading guilty to criminal charges, five months after colleague Harry Thomas Jr. (D) resigned from his Ward 5 seat, also under criminal duress.

The council must vote to approve Gandhi’s appointment. Several members consulted this week said the current unease has made them more likely to support Gandhi’s continued tenure than they might have been otherwise.

“If the city had stable government and was not in such an unsettled state, the healthiest thing to do would be to have Nat Gandhi coaching his successor,” said Tommy Wells (D-Ward 6). “In finance and oversight, it’s good to bring in a fresh set of eyes. Unfortunately, with the uncertainty of our elected leadership, we should not do that now.”

Dithering further on his appointment, Wells said, would “undermine the confidence of our investors.”

Those concerns were echoed Thursday by new D.C. Council Chairman Phil Mendelson (D): “There’s enough trouble around city hall that we need the stability.”

That a mayor would have waited so long before endorsing Gandhi’s continued tenure was unthinkable five years ago. In 2006, Adrian M. Fenty (D) wasn’t even in office when he declared his intention to reappoint Gandhi as a signal of his fiscal bona fides.

But Gandhi’s mostly pristine image took a major hit when local and federal authorities unveiled charges in 2007 against Harriette Walters and accomplices inside and outside the Office of Tax and Revenue, which Gandhi had overseen before his promotion to CFO.

Despite calls for his ouster, Gandhi successfully lobbied to stay on after firing several top deputies and making the case that he was the best man to clean up the Walters mess.

Since then, his tenure has remained tumultuous.

A recession-battered economy slowed government revenue, leading to the tightest budgets since the city’s mid-1990s fiscal crisis and sometimes testy relations between elected officials and Gandhi’s shop.

Under fiscal reforms imposed by Congress in the late 1990s, the District CFO maintains near-absolute control over the city’s financial matters. District officials may not obligate and spend money unless Gandhi rules that the funds are available. He cannot be fired without cause and a vote of the council.

By traditional fiscal measures, Gandhi presides over a city in relatively good health. Its fund balance — that is, the city’s savings account — is at $1.1 billion, up significantly after a recession-battered economy drained city coffers. The District’s primary bond issues, secured by income tax streams, carry top grades from Wall Street rating agencies.

But the financial office has endured several other controversies, including new graft prosecutions in the tax office and allegations that assessors mishandled commercial property transactions worth many millions in lost tax revenue.

Most notably, Gandhi has been at the center of a three-year-long saga concerning the city’s lottery contract, and he is being sued by his former contracting director who alleges wrongful termination in connection. Two people involved said FBI agents have recently questioned them about political meddling in the lottery award.

The recent lottery revelations led Mary M. Cheh (D-Ward 3) to say Wednesday that she saw “no need to be hasty” with the reappointment.

“There are major clouds — let’s clear away the clouds” before making a permanent appointment, she said. “Let’s make sure people who are appointed have no issues themselves.”

Under city law, Gandhi could stay on indefinitely while a replacement was sought. Some city activists urged Gray to undertake a national search, but a senior aide to Gray said a search was never seriously entertained for fear of alienating Gandhi and his allies.

Marie Drissel, one of the activists, called on Gandhi to attend community meetings across the city to “defend his past performance.”

“He only goes to the Wall Street types,” she said. “He doesn’t come out to the community.”

Yvette M. Alexander (D-Ward 7) said she soured on Gandhi after a doom-and-gloom 2011 budget resulted in a $240 million surplus, thanks in large degree to understated revenue projections. But since then, she said, she has seen “more balanced” numbers and plans to support his reappointment.

“I give him one thumb up,” she said.

Staff writer Nikita Stewart contributed to this report.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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