Once Again, Gandhi Seeks to Repair an Office's Damaged Reputation

Chief Financial Officer Natwar M. Gandhi said he doesn't understand
Chief Financial Officer Natwar M. Gandhi said he doesn't understand "how people can receive gifts of such magnitude and say nothing." (By Marvin Joseph -- The Washington Post)
By Marc Fisher
Sunday, November 25, 2007

In the movies, we're willing to believe in an inside job if the bad guy keeps his scheme secret from his co-workers.

In the real world of the D.C. tax swindle, a heist so audacious it wouldn't pass a Hollywood producer's smell test, this inside job seems to have been a secret only to those who chose to look the other way. Harriette Walters and Diane Gustus, we're told by authorities, lavished their colleagues in the Office of Tax and Revenue with extravagant gifts -- all manner of hints that, hey, we're stealing this place blind.

Yet nobody turned them in. Just as you can kill a fellow human being in broad daylight in this city and nobody will talk to police, Walters and Gustus and their confederates, prosecutors say, blithely kept ripping off Washington's taxpayers in full confidence that not a soul would live up to the moral and legal obligation to alert the authorities. Looking out for your fellow man has been redefined in the District as "snitching."

So far, 15 people in the District's taxation hierarchy have been sacked, either because they knew or because they should have known. And if "should have known" is the barometer of culpability in the tax refund scandal, then some say the ultimate "should have" is the big boss, Chief Financial Officer Natwar Gandhi.

In a way, Gandhi, the elegant, earnest enforcer of ethics and excellence in a bureaucracy previously best known for bungling and burgling, freely concedes that he's responsible. After all, he happily takes credit for the turnaround in the city's fiscal health, so he needs to take the blame when things go sour, too. But in a conversation with me the other day, Gandhi said that, having turned the District's fiscal operations from discredited joke to darling of Wall Street, he deserves a chance to repair the damage wrought by the scammers.

When Gandhi arrived from the federal government in 1997, the District's tax office was "in complete shambles," as he recalls. "I opened the door and found millions of pieces of paper on the floor -- literally. That was the filing system." He has the photos to prove it. "With that system, if you paid your taxes, thank you, and if you didn't pay, thank you, too, because there was no way I could go after you."

That changed, quickly. With his boss, then-Chief Financial Officer Tony Williams, Gandhi sacked incompetent workers by the hundreds. Gandhi won a clean audit of the city's books, and Washington's credit rating grew evermore solid. But at every turn, he ran into the same problem: a staff that resisted change.

"The atmosphere was so hostile," Gandhi recalls, "that when I insisted that every employee go through ethics training, there was great resentment and people saying, 'Why do you think we're crooks?' "

Why, indeed.

He instituted a tax fraud hotline that allowed city workers to report suspicions of wrongdoing without identifying themselves. Hardly anyone used it.

"The culture that pervaded the District government was not about customer service, it was about protecting jobs," Gandhi says. The blame then and now, he believes, rests on the transformation of the D.C. government by former Mayor for Life Marion Barry into the employer of last resort, a hiring hall in which entire families could find a paycheck and a nice, easy place to while away the weekday hours.

"Barry and his people did not care how the bureaucracy ran," Gandhi says. "But the tax office is where you make money. It has to run efficiently."

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