Third term truncated as a string of controversies piled up.
Bureau Report
WASHINGTON, DC: Days after he announced a $417 million budget surplus, Natwar M. Gandhi, the District’s chief financial officer who ushered the city out of a dismal period of financial uncertainty and into an era of growth and stability, since he took over in 2000, announced his resignation. He will retire on June 1.
Gandhi had earned the trust of Wall Street and Capitol Hill, but his stewardship of city finances has come under scrutiny, including after an embezzlement scheme by employees that siphoned nearly $50 million from city coffers, reported The Washington Post.
Most recently, he has been battered by a string of controversies involving his office’s decision to lower some commercial property tax assessments by $2.6 billion and his policy to keep internal audits private, which were revealed by the Post and are now the subjects of two federal investigations.
“Though I look forward to the next chapter in my life, this was not an easy decision,” Gandhi wrote in his resignation letter Friday to Mayor Vincent C. Gray (D). He thanked Gray and the previous mayors who appointed him – Anthony A. Williams and Adrian M. Fenty – “for giving me the opportunity to participate in the District’s financial rejuvenation and to serve the residents of this great city.”
In notifying some city officials ahead of the announcement, Gandhi — a 72-year-old grandfather who was widowed in 2011 — cited a burgeoning relationship with a Philadelphia woman with whom he went to India recently.
The trip “was a very sincere, soulful experience,” said one person who requested anonymity because he was not authorized to speak about the conversation. “I think he just felt like this was a sign that it was time to move on.”
This past Tuesday, Gandhi joined Gray in announcing the results of the District’s annual financial audit. The audit confirmed the budget surplus, which will push city budget reserves to $1.5 billion, the second-highest level in city government history, said the Post.
“This is truly a financial renaissance, a reformation, that belongs in the municipal annals,” Gandhi said, alluding to the half-billion dollar deficits that led Congress to take control of the city from 1995 through 2001.
“We are in exceptionally good condition. We are viewed very favorably on Wall Street, and when we go back again in February, we will go with our heads held high, saying we come from a city on a hill,” he said.
But the past year has been among Gandhi’s most difficult — rivaled only by the 2007 revelation that mid-level employee Harriette Walters had orchestrated a $50 million theft from the city tax office, said the report.
Most recently, questions have emerged over his handling of internal audits that outlined problems throughout his agency. One of them, obtained by The Post last year, described a “significantly flawed” system in which tax supervisors could access property records and alter them without being detected. Gandhi, who as CFO oversees the tax office, defended keeping the internal audits private, but the D.C. Council approved legislation that requires such reports to be shared with city officials and the public in a timely manner.
Subsequently, the Securities and Exchange Commission launched an inquiry into the handling of the internal audits. The FBI had previously looked into the tax office’s handling of property tax assessments, according to several people familiar with the investigation.
Even before the assessments controversy erupted, Gandhi had been under fire over his office’s handling of a lucrative contract to operate D.C. Lottery’s numbers games, dating to 2008. Gandhi remains the subject of a federal lawsuit brought by his former contracting director, who alleges that he was fired in response to political pressure from D.C. Council members.
It’s been less than a year since Gandhi was reconfirmed for a third full five-year term. Last September, he threw himself a wine-and-cheese reception at the private Metropolitan Club to celebrate his reappointment.
In an interview with The Post the day before he traveled to India in December, Gandhi said he had no plans to resign, although he acknowledged the toll that the job had taken on him. “People like me come and go,” he said. “I have no illusion. Even though I have a five-year tenure, and I have spent 12 years here and four mayors, God, I take one day at a time. You cannot take these things for granted here.”
The Washington Examiner reported that Gandhi’s abrupt retirement announcement quickly set into motion a high-stakes process to select the city’s next independent CFO, someone who must be nominated by Mayor Vincent Gray and approved by lawmakers.
So far, Gray has offered no hints about the kind of person he’ll seek for a job with a description that includes keeping Congress at bay and pushing back against the ambitions of top city officials who have taxpayer money to spend. Lawmakers quickly called for a national search, said the report.
Although District leader showered praise Friday on Gandhi, city officials acknowledged they might favor a CFO who places greater emphasis on interaction with the public.
“I’d like a CFO who is willing to really engage the public with the process of doing our budgeting,” said at-large Councilman David Grosso, who joined the council in January and did not vote on Gandhi’s reappointment last year.
Although Grosso said he wished Gandhi had been more open, he said he wants Gandhi’s successor to share one specific characteristic with the 72-year-old accountant: a devotion to conservative projections of how much money the government will collect.
Two Indian Americans interviewed by The American bazaar showered praise on Gandhi’s work in restoring the District’s financial condition.
“Natwar Gandhi created a positive environment to attract Foreign Direct Investment (FDI) and Public Private Partnership (PPP) to District of Columbia. I hope his successor continues in his footsteps and attracts more FDI to the DC and the United States,” said Puneet Ahluwalia, Partner, Global Political Solutions, LLC.
Benoy Thomas, Program Director of KidsPeace, a former Program Manager at District of Columbia’s Child and Family Services Agency, said he was not surprised that Gandhi is leaving – especially, given the announcement of $417 million budget surplus.
“I think if I am in shoes, guess I would have done the same thing; right time to retire is when you are at the top of your career. Twelve years and you and your office is under scrutiny every single day, will definitely have worn out any one,” Thomas said.
Thomas, who has worked for 20 years for the District of Columbia, says “without Dr. Gandhi’s leadership, District of Columbia would not have experienced the remarkable turnaround that we have witnessed”.
He added: “I think the residents of District of Columbia owes him in a big way and Dr. Gandhi will be remembered for turning around and stabilizing the District’s finances. I think he will be remembered for the good things he has done and over the time will forget the $50 million embezzlement scheme by his employees and controversies surrounding his office’s decision to lower few commercial property tax assessment by $2.6 billion.”