Now we know so much about the biggest corruption scandal in the city’s history — but we also know so little. I am sifting through the 114-page “Statement of the Offenses” that describes in great detail how Harriette Monica Walters stole $48 million from the D.C. government. It took dozens of federal investigators and accountants and prosecutors nine months to build their case and narrate the scam. It makes good reading, if you can stomach it. We find out how Walters started in 1984 skimming small sums. The documents tell us how she learned to embezzle cash and then embellished the scheme over time until she was able to rip off $8.6 million in 2004, her high point — or low point, if you are a District taxpayer. If you read the entire document, you can’t help but come to this conclusion: D.C.’s Office of Tax and Revenue has been corrupt to the core for a quarter-century, at least. Harriette Walters is unusual because she got caught. Investigators traced the roots of the scam to the mid-1980s, when Walters got her job. People who didn’t pay their taxes on time were assessed fees and penalties, but not all had to pay: “Walters noticed that employees who waived interest and penalties for such repeat offenders or for individual taxpayers with large tax debts received fruit baskets, gifts and cash during holidays.” She heard tax collectors bargaining with taxpayers over how much it would take to erase the penalties; she saw taxpayers hand over envelopes with cash. The documents introduce us to “Participant Five,” an unnamed co-conspirator. He, or she, was Walters’ mentor. “Five” showed Walters how to pull checks written to deceased taxpayers. “Five” introduced her to the basics of her scam: how to create fraudulent refund checks. Having learned the basic scam, Walters refined it and kept raising the value of the fake refunds. This makes “Five” the godfather of the biggest dollar corruption case we’ve seen. Who’s “Five?” And who are the tax collectors going back to the 1980s who diverted tax dollars for their own use? The new documents raise more questions: Over the 18 years of Harriette Walters’ scheme, she gave “large amounts” of cash and jewelry to “co-workers,” according to the feds. Who were these co-workers? If Walters was giving them dirty money, why didn’t they wonder about its origins? Why didn’t they go to the authorities? When Walters pleaded guilty on Tuesday, U.S. Attorney Jeff Taylor said, “A sad chapter in the history of our city is coming to an end.” Not necessarily. The feds landed Harriette Walters, the biggest rip-off artist. From my reading of the charging documents, the tax office could still be packed with people who were embezzling funds, taking bribes, accepting dirty money from Walters, winking at her corruption and hatching schemes to pick up where she left off. The “sad chapter” in D.C. history should be only the beginning of investigations, indictments and firings.
