D.C. Council backs measure forcing more transparency from Gandhi’s office

October 16, 2012

The D.C. Council on Tuesday unanimously approved legislation that demands more transparency from the city’s chief financial officer by requiring that the agency share the results of its audits by immediately posting them online.

Chief Financial Officer Natwar M. Gandhi had resisted the change for weeks, defending his office’s longtime practice of keeping the reviews private to protect sensitive information. Releasing the audits, he had said, could give people a “road map” to exploit weaknesses in his agency’s operations.

He had proposed making a list of completed audits and executive summaries available on the agency’s Web site. But the council legislation goes much further, requiring the posting of full audits, quarterly reviews and annual reports of planned audits.

Mayor Vincent C. Gray (D) is expected to sign the legislation.

The Office of the Chief Financial Officer has been under scrutiny after articles in The Washington Post detailing how proposed reductions in commercial property assessments reduced the District’s tax base by $2.6 billion.

“The OCFO has been sufficiently embarrassed by the lack of transparency,” David A. Catania (I-At Large) said after the vote. “I think [Gandhi] knows that people have a right to know.”

Catania said that over the next few weeks he will also seek to end Gandhi’s oversight of the Office of Integrity and Oversight, which conducts audits, and turn it into an independent agency.

Also, Jack Evans (D-Ward 2) introduced one measure that would require all city agencies to post internal audits online and another that would place a 5 percent cap on the increase in taxes on residential property. The current cap is 10 percent.

Tuesday’s legislative action came a day after Tony L. George resigned as chief tax appraiser, after less than a year on the job. During George’s tenure, the tax office, which is within Gandhi’s agency, reduced the proposed assessments of about 500 commercial properties through settlements with the owners.

Earlier this month, William J. DiVello, executive director of the Integrity and Oversight Office, abruptly resigned, citing the refusal of Gandhi’s senior managers to release a revised version of an audit that found poor oversight of a database used to calculate tax bills.

Before the two resignations, The Post ran a series of stories on the reductions, George’s previous work history and the unreleased internal audits that showed continued problems in the tax office, which was upended five years ago when federal authorities uncovered a $48 million embezzlement by a mid-level manager.

The Post found that George did not disclose on his District job application that his five-year contract as an assistant chief appraiser job in Fulton County, Ga., was terminated in the fourth year and that he had sued his former employer. On his application, he listed his reason for departure as “completion of contract.”

At a council committee hearing last week, several attorneys and representatives of commercial building owners praised George for taking on the task of correcting erroneous assessments by lower-ranking staffers to avoid the bureaucracy and cost of going to the Real Property Tax Appeals Commission and Superior Court.

But advocates of residential property owners, especially those who are low-income or are elderly on fixed incomes, voiced concern about an unequal treatment of commercial vs. residential property owners.

Evans said he was inspired by that “compelling testimony.”

His legislation to cap annual residential taxes at 5 percent also would abolish a law that requires residential property owners to pay taxes on a minimum of 40 percent of the assessed value of their homes despite the cap.

Evans said the minimum has had an adverse effect on longtime residents, particularly elderly African Americans who are now having trouble paying their taxes and remaining in their homes.

“Property owners are getting killed in this town,” he said in an interview. “The bottom line is that’s outrageous.”

At last week’s hearing, council member Muriel Bowser (D-Ward 4) spoke passionately about elderly residents trying to desperately wade through the tax-assessment system.

In an interview Tuesday, she welcomed Evans’s legislation but said she wants the city to enforce a tax break for seniors. A law approved in May allows a 50 percent deduction in property-tax liability for the primary residence of senior households with a gross adjusted income of $125,000 or less. The reduction would benefit about 1,500 households and cost about $3.8 million but remains unfunded in the budget, according to a council report.

“It’s one of the best things we can do for seniors who don’t want to be priced out,” Bowser said. “That needs to happen.”

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