D.C. Council Chairman Vincent C. Gray says the report on the legislature’s investigation into the $50 million embezzlement by Harriette Walters and others at the Office of Tax and Revenue will be released “somewhere around December 16.”
It’s unclear what William R. McLucas, the attorney at Wilmer Hale law firm who conducted the inquiry, discovered. But a letter dated Sept. 8 to Assistant U.S. Attorney Timothy G. Lynch from A. Scott Bolden, on behalf of his client Diane Gustus, hints at what McLucas’ report might reveal about how the criminal enterprise went undetected for decades.
Bolden, managing partner at Reed Smith, called Gustus “unsophisticated, unwaveringly loyal and generous” and argued against prosecution. The U.S. Attorney must have agreed; charges were dismissed against Gustus, an OTR employee for 35 years.
“Ultimately they found that others’ testimony and representations were consistent with what [Gustus] claimed,” Bolden said during an interview Tuesday, declining to comment on conversations with the U.S. Attorney, and refusing to discuss whether his client spoke with McLucas.
Bolden’s letter offers insight into the relationship between Walters and Gustus — and why OTR workers didn’t report illegal activities.
“Walters lavished gifts on some 40 employees, co-workers, and supervisors,” Bolden wrote. “On one occasion, Walters bought Diane a fur coat.”
According to the letter, Gustus ran “errands for Walters, including going to the bank for her. Walters would write Diane a check and Diane would cash the check at Bank of America, and bring the cash back to Walters.”
Once, Walters gave Gustus her “bank card to withdraw money from the ATM on her behalf.” Bolden’s letter revealed that Gustus also received a “loan from Walters sometime around 2001, and cash gifts came sometime thereafter.”
“As their friendship grew over time, Walters began giving Diane larger sums of money to make sure Diane had a savings to fall back on,” wrote Bolden. Gustus received up to “$300,000” in cash and gifts.
That’s a small sum compared with the total stolen. But who gets $300,000 from a supervisor? Is there any wonder that “on at least 19 occasions” Gustus simply signed and didn’t question already-completed refund forms presented to her by Walters?
In the letter, Bolden said that Walters signed some of those refund documents without Gustus’ knowledge. Further, he said, his client believed Walters’ tale that the cash was “family money.”
Gustus didn’t have a college degree. But even a high school dropout would have suspected Walters’ explanation.
Bolden is right when he tells me the real issue isn’t whether he pulled the wool over the U.S. Attorney’s eyes.
“The real issue,” he continues, “is how do you terminate employees without terminating the decision-makers who allowed that culture and environment [at OTR] to fester? How do you clean that up?”
I’m fine with firing the whole lot: senior-level officials who should have known and didn’t; and every OTR employee Walters supervised, or who sat near her desk or received those so-called gifts.
