U.S. House Blocks Gandhi's Pay Raise

By David Nakamura and Carol D. Leonnig
Washington Post Staff Writers
Wednesday, December 19, 2007

Congress has blocked a $92,400 pay raise for D.C. Chief Financial Officer Natwar M. Gandhi, another blow for the embattled leader in the wake of the embezzlement scandal at the city's tax office.

The news came as federal prosecutors charged an eighth person in the property tax case, Alethia O. Grooms, a Prince George's County real estate agent. They also said they are investigating evidence suggesting that the operation could date to 1990, nearly a decade earlier than thought. Prosecutors did not detail their evidence in court papers, making only passing reference to a suspicious 1990 property tax check made out to Grooms. Prosecutors said she received two fraudulent refund checks this year from the District's tax office.

Two D.C. tax office employees, including Harriette Walters, and six others have been charged with conspiring to steal more than $20 million in bogus property tax refunds. Authorities have said they are assessing the total loss. A Washington Post analysis of city records has identified more than $44 million in questionable property tax refunds since 1999.

"This investigation keeps spreading, and we're seeing more and more tentacles" in the scheme, said Joseph Persichini Jr., head of the FBI's Washington field office.

If the scam dates to 1990, it took place under four mayors -- Marion Barry, Sharon Pratt, Anthony A. Williams and Adrian M. Fenty -- and under the financial control board that oversaw the city from 1995 to 2001. Gandhi headed the D.C. Office of Tax and Revenue from 1997 until 2000, when he became chief financial officer.

Gandhi declined to comment yesterday. He has said that he has removed 15 employees since the scandal broke. One of his top deputies, Ben Lorigo, announced that he will resign at the end of this month. Gandhi and Lorigo have not been charged with any wrongdoing.

Fenty (D) and the D.C. Council had agreed to raise Gandhi's salary from $186,600 to $279,000 last spring after he was offered a high-paying job with Amtrak. Gandhi, who built a sterling reputation on Wall Street, agreed to stay put.

But his raise required congressional approval. The Senate had included a rider providing for the raise in the omnibus appropriations bill. House members removed the provision before approving the bill Monday night, said Del. Eleanor Holmes Norton (D-D.C.).

Fenty declined to comment yesterday on the pay issue.

Council member Jack Evans (D-Ward 2), chairman of the Finance and Revenue Committee, said Gandhi deserved a raise based on his overall performance. "It's outrageous," Evans said. "Once again, this is an intrusion into the affairs of the District."

But council member Kwame R. Brown (D-At Large), who has called for Gandhi to be replaced, said: "Right now, there is a formal investigation, and it would be irresponsible to give anyone a raise until we know what's going on. At this moment, I think the House of Representatives did the right thing."

Norton said she did not know which House member removed Gandhi's raise provision. But, she said: "There is no doubt in my mind what the reason was."

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