We still don't know all the details surrounding William DiVello's sudden resignation as internal watchdog of the D.C. Office of the Chief Financial Officer less than a week before he was scheduled to testify before the District Council; what we do know doesn't look good for either CFO Natwar Gandhi or Mayor Vincent Gray, who reappointed Gandhi to a third five-year term this summer.
In February, DiVello's Office of Integrity and Oversight produced a report highly critical of the city's tax assessment process. The Examiner has learned that this report sat on Gandhi's desk for six months before the Washington Post reported in August that the Office of Tax and Revenue, or OTR, that he oversees slashed $2.6 billion from the assessed value of hundreds of commercial buildings owned by some of D.C.'s wealthiest developers, reducing the city's 2012 tax revenue by $48 million.
DiVello is the third Integrity and Oversight director either to resign or be fired under protest within the last four years, all over the same issue of accountability.
The CFO claims that the tax-assessment settlements saved taxpayers money because the city's independent tax appeals board would likely have agreed to the lower valuations anyway. This claim is questionable since the city would have won at least some cases. With dozens of attorneys on staff, Gandhi's office would not have needed to spend much new money on litigation.
DiVello's auditors found other irregularities that even the quick-witted Gandhi cannot defend. A small number of supervisors under Chief Appraiser Tony George were allowed to change property values on OTR's computerized system without front office approval -- and without leaving any trace that they had altered the assessments.
Not only is this contrary to best practices, it demonstrates that the Integrated Tax System, which cost D.C. taxpayers $100 million, was a waste of money. Installed when the District was still under a federal Control Board, the ITS was supposed to create internal controls that would make such secretive manipulations impossible. Obviously it failed.
If the process used to appraise Class A commercial buildings like Gallery Place was so inaccurate that it was off by $58 million, OTR officials should have long ago stepped in to fix it. They didn't, and to his shame, Gandhi let them get away with it.