The last time a D.C. mayor nominated Natwar M. Gandhi for another five years as the city’s chief financial officer, the circumstances were nothing short of triumphal. Before Adrian M. Fenty won the mayoralty in 2006, he called a news conference on the John A. Wilson Building steps to announce his confidence in Gandhi some 10 months before his term expired.
What a difference five years makes.
Earlier this month, Mayor Vincent C. Gray (D) quietly forwarded Gandhi’s name to the D.C. Council two weeks before his term was set to lapse. No news conference, just a brief Friday afternoon release praising him as a “steady steward for the District’s finances.”
The lower key approach reflects vastly different circumstances for the two mayors — Gray has been beset by political woes, including the recent prosecutions of campaign aides — and for Gandhi — whose reputation has lost some glimmer, largely because of a $48 million embezzlement scandal uncovered in 2007.
Yet Gandhi, whose nomination is set for a council hearing Thursday, is poised to be confirmed, reflecting the deep support in business and political circles of his role as the city’s independent fiscal czar.
In his first interview since Gray’s nomination, Gandhi said the circumstances of his appointment have not distressed him. “I have never done more important work in my life than what I have been doing here,” he said. “I think we have contributed substantially to the financial viability and credibility of the District. And I think if given the opportunity, I’d like to continue.”
The nomination was far from assured.
As months and then weeks dwindled in Gandhi’s term, pressure from supporters and detractors came to bear on Gray. Gandhi, CFO since 2000, made it known that he was prepared to leave by the end of July should he not be reappointed and would resist the suggestion from some influential outsiders that he should participate in a search for a replacement.
“My record is clear, with all the pluses and minuses,” Gandhi said Wednesday. “I am not going to be fundamentally different than what I have been here all these years. I am what I am.”
At Thursday’s hearing, Gandhi will have another opportunity to tell the story of the District’s remarkable financial turnabout, from the brink of default in 1995 to the current status quo of swelling tax rolls, surging bond ratings and stuffed coffers.
It’s a show he often takes on the road. In recent months, he’s appeared at government finance events in Michigan, Philadelphia and Chicago, an evangelist for the rare type of structural independence he enjoys from elected politicians. He calls the District “the poster child now of how to recover financially.”
Gandhi also enjoys the confidence of Wall Street banks and debt raters, whose judgments can mean swings of tens of millions of dollars in borrowing costs for the city.
“There are very few people who bring more credibility to his job,” said William W. Cobbs, chairman of Public Resources Advisory Group, a New York firm hired by the city to advise it on finance issues. Cobbs added that the renomination has “alleviated any concerns” among bond raters about the recent political scandals.
But the five additional years of solid city finances have been accompanied by crops of embarrassing headlines for Gandhi — the $48 million embezzlement by mid-level tax office manager Harriette Walters and cronies prime among them.
When the vast fraud was revealed, Gandhi fired several top deputies and offered his own resignation to Fenty, while also asking for the opportunity to clean up the mess Walters created. His resignation was not accepted.
“It was the conclusion of the powers that be that you are better off with Gandhi than without him,” Gandhi said. But time has dulled memories of the theft only slightly, and there remain plenty of Wilson Building insiders amazed at Gandhi’s ability to survive. That’s testament, they say, to his political savvy, cultivating support in venues ranging from the Shakespeare Theatre to his breakfast booth in the back of the Old Ebbitt Grill.
Gandhi now says he is “reasonably confident” the holes in the tax office and elsewhere have been plugged. He offers as evidence that tax office employees have since been prosecuted for stealing; one, for instance, was charged in September with stealing $414,000 after a co-worker raised suspicions.
“Stupid people are stupid people,” he said. “They keep on doing these things and we catch them, and we are not unique about that.”
More recently, he has played a starring role in a four-year saga over the award of the city’s lottery contract, as well as an ancillary controversy over whether to implement Internet gambling in the city as part of that contract.
His former contracting director, Eric W. Payne, is now suing him for wrongful termination, claiming that Gandhi caved to political pressure from D.C. Council members who were not happy with Payne’s decisions. The matter remains in litigation; Gandhi sat for a deposition late last year that produced an embarrassing admission that he sometimes used his personal e-mail account for city business.
More recently, federal agents have requested documents related to the contract and have interviewed some of the figures involved, leading to some speculation that Gandhi could be the target of a probe.
But Gandhi bristles at the suggestion of wrongdoing, calling it “offensive,” and said federal agents have not asked for interviews with him or employees, only documents relating to the lottery investigation: “I said, ‘Whatever we have, you’ll get it.’ ”
What’s on his agenda going forward is equally challenging. Gandhi says he considers his job to be “do no harm, do not lose any ground.” He wants to beef up his office and establish its credibility on par to the nonpartisan Congressional Budget Office, “so any word that comes out of the CFO’s office is the last word.” He hopes to take a more aggressive role in helping city officials analyze policy questions.
Some potential concerns are largely out of Gandhi’s hands — whether, for instance, the massive cuts contemplated under federal budget “sequestration” will come to pass, potentially crippling the city economy. Other concerns he has had more influence on, such as United Medical Center, the District-owned hospital on Southern Avenue SE.
It has been politically nettlesome, with few elected officials willing to endorse the notion that the city’s only acute-care hospital east of the Anacostia River should close but with few private operators willing to risk a purchase.
The hospital’s finances are again precarious after a recent policy change led to a sudden decrease in a Medicaid funding stream the hospital has relied on. The Gray administration has tapped $4 million in contingency funds to keep the hospital solvent until the fiscal year ends Sept. 30.
Gandhi hopes to see progress on a long-discussed solution — saving the hospital by leveraging economic development on the 17 acres surrounding it.
“You could have a city building there. You could have a new hospital. Neiman Marcus will not go there, but you can have a big box store there,” he said. “I would like to basically show them a variety of options.”
But progress on hospital issues, he admits, has been obstructed by the political distractions, including the resignation of former council chairman Kwame R. Brown this month. The irony is that the roiled political scene, including the federal probe of Gray’s 2010 campaign, has helped make Gandhi’s reappointment more fait accompli than it otherwise might have been.
“There is a concern about all these headlines,” he said, “but the way I look at it is, we have a mission to maintain the city’s financial viability, and we’re going to keep on doing that.”