2 More D.C. Tax Workers Removed

D.C. Chief Financial Officer Natwar M. Gandhi removed two more tax office employees, putting them on administrative leave, in response to a tax scam that authorities say has reached $20 million and might go "substantially higher."

It was his second action against staff this week. On Wednesday, Gandhi forced the resignations of the four top managers of the Office of Tax and Revenue.

Mayor Adrian M. Fenty (D) and other city officials have stood by Gandhi, who operates independently and has been credited with helping to rescue the city from past financial crisis. But the fraud case has raised major questions about his judgment and oversight of the office.

The chief officer spoke with Fenty yesterday for the first time since the scandal broke Wednesday. That morning, Fenty appeared with Gandhi at a news conference where the U.S. attorney's office announced the arrests of assessments manager Harriette Walters and co-worker Diane Gustus. Walters, 51, and Gustus, 54, have been charged with 10 felony counts of conspiracy and fraud allegedly involving Walters's relatives and friends, and with fabricating 58 property tax refund checks.

Investigators have said that it appears Walters had figured out that she had the "last eyes" on those checks and operated with little monitoring.

"So far, we know they stole $20 million," a source close to the investigation said. "That number may go substantially higher." The source spoke on condition of anonymity because the investigation is ongoing.

Fenty said of Gandhi yesterday: "This circumstance is one that he has taken responsibility for, which District residents appreciate. I also think he is doing the right thing trying to get out in front of holding people accountable in the agency."

Gandhi refused to identify the two employees placed on leave but said they work in the real property assessment division of the office.

The four managers who resigned are the deputy chief financial officer, Sherryl Hobbs Newman; her deputy director, Matthew Braman; the director of real property tax administration, Martin A. Skolnik; and the chief assessor, Thomas Branham. Gandhi said he held them responsible for failing to catch the fraud.

At an emergency meeting of more than 600 tax and revenue employees Thursday morning, where Gandhi gave an impassioned pep talk, some workers asked whether fault for the staggering theft also rests with him.

"I have been asked two times this past week, why am I not resigning?" Gandhi said in an interview yesterday. "The way I answer is that I take my responsibility very seriously. In this case, the way I take my responsibility seriously is to restore the integrity and reputation of this office that has been damaged and compromised by deplorable acts."

Council members have also been asked by constituents whether Gandhi should resign, but many say his record outweighs this blemish.