Financial Chief Urges Employees to Work To Regain Public Trust

By Yolanda Woodlee and Nikita Stewart
Washington Post Staff Writers
Friday, November 9, 2007

District workers of the Office of Tax and Revenue trickled into the ballroom at the Walter E. Washington Convention Center as much as an hour ahead of time yesterday. The cavernous room filled with low chatter as they discussed the allegations that two fellow employees stole more than $20 million in a property tax scam.

A few attendees read front-page stories about it in the morning newspapers. A quartet of employees joked about having to find other jobs if the agency goes under.

But the room came to a hush as their boss, Natwar M. Gandhi, the District's chief financial officer, took the podium at 10:03 a.m.

With his own golden reputation on the line, an anguished Gandhi urged his workers to redouble their efforts to guard the public coffers and regain the public's trust.

He spoke softly and solemnly at first, as if at a funeral, telling the more than 600 employees in attendance how hurt he was that the public is now looking skeptically at an agency that, under his direction, has been responsible for restoring the city's long-tarnished image.

"What has failed our wonderful staff is the management," Gandhi said. "All of you have my confidence. I know you. Many I hired myself. I know how good you are."

Among those he nurtured was Sherryl Hobbs Newman, who had directed the office since 2005. On Wednesday, Gandhi fired Newman and three other managers.

He drew strong applause from rank-and-file employees of the tax office when he placed blame squarely at the feet of those who perpetrated the scam and those who supervised them.

Charged in the scandal are Harriette Walters, a manager in charge of property tax refunds, and Diane Gustus, a tax specialist. Both women were jailed overnight and appeared at U.S. District Court in Washington yesterday afternoon. Authorities called it the largest theft to be uncovered in local government in the Washington area.

Ben Lorigo, executive director of the Office of Integrity and Oversight and now acting deputy chief financial officer for tax and revenue, spoke as well. He told employees he could not disclose details, but "if you knew the internal controls breakdown and the failure in checks and balances, you would be appalled."

The D.C. Council will hold an oversight hearing on the matter Thursday.

In response to a question from a worker, Gandhi said it was especially difficult for him to demand the resignations of the tax office director, Hobbs Newman, and other top officials whom he had brought to the District government. But, he said, he had to hold the leaders of the office responsible.

"You can't sit in your office and send e-mails. You have to walk the aisles and talk to people," he said. "You have to be proactive."

In a statement later in the day, Hobbs Newman said she was as shocked as others.

"While this activity seems to have begun well before my tenure at the Office of Tax and Revenue, any actions I took or did not take regarding these specific activities were consistent with those of my predecessors as well as existing policies and procedures," Hobbs Newman wrote.

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