D.C. Hearing On Scandal Has Gandhi In Tight Spot

Auditor Criticizes Financial Agency

Pressure mounted on D.C. Chief Financial Officer Natwar M. Gandhi at a lengthy and contentious D.C. Council hearing yesterday, as the city auditor testified that Gandhi's office adopted a dismissive and adversarial attitude to her repeated warnings about potential problems at the city's tax office, now rocked by a major scandal.

Gandhi defended his agency, saying that all of the necessary policies and procedures were in place but that they were not followed.

In one of the more explosive exchanges, it was revealed that authorities are investigating whether Harriette Walters, the former tax office official charged with engineering the alleged multimillion-dollar swindle, lent money to some of her superiors.

Council member Tommy Wells (D-Ward 6) asked whether Walters, who he said was called "Mother Harriette," gave loans to her superiors.

"That's what I have heard," Gandhi said.

But Gandhi and staff members said they could not provide more information because the allegation is under investigation.

D.C. Auditor Deborah K. Nichols called Gandhi's office, an independent operation established by Congress, "very parochial" and said there is a "lack of cooperation" in providing information.

"They're adversarial in nature," she said.

The first half of the hearing was dominated by Nichols and Sherryl Hobbs Newman, who was forced to resign last week as deputy chief financial officer in the wake of allegations of the biggest theft by government employees in the city's history. The hearing started in the afternoon and ended at 9 p.m.

Gandhi, who sat with his arms folded when questioned, appeared late in the day and was flanked by staff members. He said 15 employees have been removed or have resigned, including Hobbs Newman. He said he has no plans to resign.

"When I hear from the mayor that he no longer has confidence in me, when I hear from the collective council that they agree with the mayor, that is the time when I, too, should resign," he said.

Council member David A. Catania (I-At Large) said Gandhi has been "deflecting" responsibility.