When Chief Financial Officer Natwar Gandhi appears Monday before the D.C. Council, he should be forced to explain why he cried poor-mouth in 2011 — forcing furloughs and tax hikes — only to have the government end the year with a $240 million surplus. Further, the CFO should be required to elucidate his role, especially after yet another incident of boundary amnesia. During the Internet gambling controversy, Inspector General Charles Willoughby reported that Gandhi, in 2010, “materially” altered the Intralot contract — without council approval. At-large Councilman David Catania declared the CFO had “gone rogue.”
“It’s not your place to substitute your judgment for ours,” Catania told Gandhi during last week’s public hearing.
Gandhi’s imperialism has been on display before. Each time he overreached, he apparently harmed the city financially. Byron Boothe, vice president of government relations with Intralot, told me the District would have been “the only jurisdiction to operate, regulate and own an Internet gambling license; that’s worth hundreds of millions of dollars.”
We can quibble about his estimates. The CFO said the District would earn $13 million over three years.
Either way you count it, the city is out of beaucoup money because of Gandhi’s mismanagement.
In 2007, Gandhi stopped collecting taxes on certain refinanced real estate deals as required by law. The council didn’t even know about his nullification of the “recordation tax” until last year, when two lawyers asserted the city may have failed to collect more than $100 million.
Some elected officials have been willing to overlook Gandhi’s imperial tendencies; they have argued the city is well-served by him.
Is it, really?
Sure, the District received an “unqualified” audit for fiscal 2011. But there are serious problems, including significant deficiencies in technology and procurement. Though not covered by the audit, there’s also damage done by deliberately depressing revenue projections.
“It deprives the council of its right to decide how revenues are spent,” said Catania. Legislators also approve proposals — furloughs and income tax hikes — based on inaccurate information.
For fiscal 2013, Gandhi has said the city could face a $130 million revenue shortfall. That prediction has shaped the mayor’s budget development and undoubtedly will affect the council’s reaction.
For all his playing with numbers, Gandhi hasn’t been watching the money. For example, during his tenure, more than $100 million has been stolen by finance employees. And while Intralot executives are keeping mum about their next move, you can bet the company will push to recoup its losses; Boothe told me that could be as much as $7 million.
Its claim may have merit: The CFO testified Intralot already had begun developing the platform for Internet gambling. “That’s called coercion,” one business leader told me, adding companies often “invest” in ways that make it difficult for governments to back away from a deal.
The CFO seems to have used similar tactics during his tenure, with indisputable deleterious results.
Isn’t it time the council ends Gandhi’s imperial reign or at the very least rein him in?
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
