Something's rotten in D.C.'s Office of the Chief Financial Officer, and it's up to the D.C. Council to get to the bottom of it.
In August, the Washington Post first reported that the Office of Tax and Revenue under CFO Natwar Gandhi had secretly lowered contested commercial real estate assessments for some of the city's wealthiest developers by $2.6 billion instead of going to court. Last week, the Post reported that tax cases filed in D.C. Superior Court but settled before trial amounted to an additional $1.2 billion, for a total of $3.8 billion in reduced assessments.
The settlements cost the city $48 million in potential tax revenue and an additional $15 million in tax refunds. How does the same city that taxes plastic grocery bags let $63 million go without a fight?
Meanwhile, an independent outside audit required under a 2010 District law that could have exposed the secretive settlements still has not been completed. Two years later, D.C. Inspector General Charles Willoughby still has not explained why.
There's more. An investigation by William DiVello, the former director of the CFO's Office of Integrity and Oversight, discovered that a small number of tax supervisors working directly under former chief appraiser Tony George were allowed to change property values on OTR's computerized database without leaving a trace. But DiVello's highly critical report sat uncirculated on Gandhi's desk for six months, its existence revealed only when the internal watchdog suddenly resigned in October -- the third OIO director to leave within the last four years over accountability issues.
On June 15 -- before the assessment settlements were made public, before the mandated outside audit was done and while Gandhi still had DiVello's damning report on hold -- Mayor Vincent Gray reappointed Gandhi to another five-year term, which the D.C. Council proceeded to approve without objection.
But this suspicious timeline did not escape the attention of the Securities and Exchange Commission, which launched an informal inquiry on Oct. 22 to determine whether Gandhi's withholding of negative information from bondholders constitutes a violation of securities law.
The latest revelation that there were even more tax assessment settlements than previously reported just as Gandhi's previous five-year term was ending raises serious questions about his motives in not releasing DiVello's findings. Council members should call Gandhi back to testify, under oath, about what he knew and when he knew it.