By Colbert I. King
Saturday, November 10, 2007
Ten years ago, The Post published an editorial, headlined " Dept. of Finance and Rigmarole" [March 6, 1997], that addressed the error-prone D.C. Department of Finance and Revenue and its boneheaded mistake in revoking the homestead and senior-citizen exemptions of nearly 5,000 homeowners. The department compounded the error by sending out whopping real property tax increases, which scared thousands of elderly residents half to death.
I often wondered whether that editorial had been too harsh on the city's tax office. But after reading that D.C. tax office employees have been charged with using phony paperwork to steal more than $20 million through illegitimate tax refunds, I'm convinced that the "Rigmarole" editorial was way too kind.
Read the 47-page sworn affidavit of FBI Special Agent Matthew T. Walsh, which was used to support search and arrest warrants issued in this case.
The sickening accounts of mail and bank fraud, money laundering, and other federal crimes allegedly committed by tax and revenue employees, along with other unidentified conspirators in that office, are all there.
What comes through most in the affidavit is the scope of the corruption.
The alleged scheme went beyond midlevel officials and the friends and relatives they cut in on the action. At least five other city tax and revenue employees were also included.
The FBI is still trying to determine the magnitude of the scam. Thus far, authorities believe it has generated dozens of fraudulent checks, with a financial loss to the District of at least $20 million. Special Agent Walsh said in his affidavit: "That amount may continue to grow as the investigation continues and additional fraudulent checks are discovered."
"Moreover," he said, "of that $16 million, less than $2 million in bank accounts have been located thus far." Amend that. The total now reaches at least $20 million.
In response to the federal charges, the District's chief financial officer, Natwar Gandhi, who oversees the tax office, has done some last-minute housecleaning, firing four senior officials for failing to detect the scheme, and he sent two other employees on administrative leave.
That's a start.
Tax office employees identified in the affidavit by the initials K.F., C.W., C.H., G.R. and S.J. also allegedly received money and gifts for their help. They, too, should be toast.
This kind of corruption, as Mayor Adrian Fenty rightly said, goes "to the heart" of the relationship between the D.C. government and city residents.
But city leaders will only compound the scandal if they, as is customary, treat it as an isolated breach of the public trust. It is not.
Check out last month's D.C. corruption scorecard:
-- On Oct. 25, a supervisor in the D.C. Department of Public Works pleaded guilty to soliciting and taking bribes in connection with his scheme to allow criminal offenders to avoid completing their community service obligations in return for cash; that day, a D.C. police officer pleaded guilty to stealing someone's credit card while on duty and then attempting to withdraw cash using the card.
-- On Oct. 18, two D.C. police officers pleaded guilty to making false statements in an official report. They had claimed that an arrested man had escaped from hospital restraints and assaulted them and that they pursued him unsuccessfully.
Turns out, the arrestee was not restrained, no police officers were near him, no altercation occurred and the cops didn't pursue him as he walked out of the hospital.
-- On Oct. 31, a security officer at the D.C. Superior Court was found guilty of conspiracy and wire fraud in connection with a real estate scheme. Two clerks from the D.C. Superior Court also pleaded guilty.
Then there was the 2006 D.C. Council primary candidate from Ward 6 who tried but failed (thank goodness) to make it onto the city payroll but who did end up pleading guilty on Oct. 17 to failing to file federal and D.C. tax returns for tax years 2002 through 2005.
That, dear reader, represents only one month's worth of convictions of city workers and a wannabe by the U.S. attorney for the District of Columbia.
And let's not forget the account in yesterday's Post of theft and misuse of student activity money by D.C. public school employees and others.
Truth is, there's rot in the foundation of the D.C. government.
Some good employees? Sure. But they're overshadowed by scumbags drawing government paychecks. And that doesn't include those well-connected slicksters with city contracts who are ripping off taxpayers like bandits.
A D.C. Council that honors its oversight mandate would work to root out rot in government rather than leave that job to the media and congressional committees. But there's no glory and few votes to be had in that.
The corrupt never had it so good.