D.C. Attorney General Irvin Nathan apparently believes Chief Financial Officer Natwar Gandhi can break any law or administrative policy with impunity. The AG implied as much in correspondence to D.C. Council Members Mary Cheh and David Catania. “I am not aware of any provision of the Tax Clarity Act [of 2000] or any other law that requires the CFO to notify the mayor or the council when he unilaterally adopts/changes administrative policy to address a statutory ambiguity,” Nathan wrote in his letter dated Aug. 10, 2011.
The letter was in response to a request from Cheh and Catania that Nathan reconsider his opinion about whether Gandhi complied with the Tax Clarity Act as written. Earlier this year, two lawyers — Jeffrey Mitchell and James Stanton — claimed the CFO hadn’t properly implemented the law, possibly denying the city $100 million in revenues.
Nathan had said there wasn’t any ambiguity in the law, but the legislative record may have muddied the waters. Gandhi had said the law wasn’t clear. But it couldn’t have been too confusing, since he claimed from 2001 to 2007 he collected the tax as prescribed on refinanced commercial real estate loans.
In 2007, without notice to either the mayor or the council, Gandhi stopped collecting that tax. Nathan seemed to argue the CFO was within his rights to take such action and wasn’t required to make any notification to elected officials.
While the AG and council members duked it out, the man who started all the trouble was off acting in a play, pretending to be Mahatma Gandhi, the Indian independence leader who justifiably made life hellacious for British colonials. Although no relation to that celebrated icon, the District’s Gandhi has wreaked his own havoc.
The CFO position was created as an independent authority during the Financial Control Board era. Using the powers vested in that congressionally created panel, the CFO could override financial decisions made by the legislature or the executive. But the control board technically dissolved more than eight years ago.
When I asked Nathan whether he intended to require Gandhi to resume collecting the recordation tax, he told me his office “does not give directions to the CFO. The CFO heads up an independent office.”
The AG apparently doesn’t fully understand his job includes ensuring some independent agency honcho with a budget of $131 million doesn’t violate local laws. More important, Nathan doesn’t seem to realize he’s creating a written history certain to undermine elected officials’ authority.
Can other independent managers in the future claim confusion to circumvent city laws? Can the CFO now stop collecting other taxes critical to the District’s fiscal viability because he believes them too cumbersome?
Nathan’s letter has moved the fight way beyond the recordation tax. All council members — not just Cheh and Catania — should be alarmed. The legislature should act swiftly, going to court if necessary, to make clear the city’s laws are to be followed by everyone — even an independent, Teflon bean counter.
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
