Gandhi 'Deeply Sorry' for Scandal

Fiscal Chief Vows To Repair Damage

D.C. Chief Financial Officer Natwar M. Gandhi apologized yesterday to city residents for the tax office embezzlement scandal and vowed to remain on the job even though Congress denied him a salary increase.

At a meeting of the Anacostia Coordinating Council in Ward 8, Gandhi told two dozen community leaders that he realizes that the public has lost confidence in his office.

"More than anything, I want to say how deeply sorry I am," Gandhi said. "It would have been far easier for me to go home and say I'm done with it. It would have been far easier on my family. But that would be running from responsibility of something that happened on my watch. I'm going to fix this."

Since the scandal broke last month, Gandhi has been making the rounds, talking to community and business groups in an attempt to shore up support.

The case is the biggest embezzlement investigation in D.C. history. Federal authorities have charged eight people, including two D.C. tax office workers, with stealing more than $20 million through bogus property tax refunds issued since 2001. A Washington Post analysis identified $44 million in questionable refunds since 1999. This week, federal agents said they are examining evidence that suggests that the scam could date to 1990.

On Monday, Congress blocked a $92,400 raise that would have increased Gandhi's salary to $279,000. Mayor Adrian M. Fenty (D) and the D.C. Council approved the salary increase in the spring to keep Gandhi, the finance chief since 2000, from taking a high-paying offer from Amtrak. But Congress, which oversees D.C. affairs, removed the provision from an omnibus appropriations bill.

Gandhi said yesterday that he could still command a high-paying job in the private sector but that he is not seeking one.

"To walk out at this time would be a dereliction of my responsibility to the city," he said. "At this stage, I do not want to walk out of this place with a black eye on my career."

Residents expressed frustration to Gandhi that such a large scam could have been perpetrated for so many years without detection. They fretted that the stolen money meant other city needs went unfunded.

William Lockridge, a longtime school board member, said he recalls having to cut budgets year after year.

"I would have loved an extra $20 million or $40 million. Look at all the services we could have provided," he told Gandhi. "It would have cut some of the pain."

For the most part, however, the residents said they were willing to give Gandhi a chance to fix the problems. James Bunn, head of the nonprofit Ward 8 Business Council, said he had thought that Gandhi should resign but changed his mind after hearing Gandhi yesterday.

"This is the first time I heard you say, 'The buck stops with me,' " Bunn said.

Gandhi said he has removed 15 people from the tax office and established an independent advisory board to recommend and review new safeguards.

But the finance chief acknowledged that the search firm he has hired to find new managers has had trouble identifying good candidates.

Gandhi reminded residents that he came to the D.C. government a decade ago during the city's financial crisis and has helped lead a recovery that has produced a large fund balance and A-plus bond ratings.

"All that we accomplished in the last 10 years was lost in a day," Gandhi said. "It's most important we regain the confidence of the people that has been tarnished."