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Government and People
Chairman Vincent C. Gray
Councilmember Jack Evans
A PROPOSED RESOLUTION IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
To declare the existence of an emergency, with respect to the need to establish a special committee to investigate the management, control systems and structures within the Office of Tax and Revenue in the Chief Financial Officer that permitted millions of dollars of District of Columbia funds to be stolen, and to determine what steps are necessary to necessary to ensure the integrity of the Office, and that the management, control systems and structures are adequate to prevent a future occurrence of these fraudulent activities.
RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this resolution may be cited as the "Council Office of Tax and Revenue Investigation Special Committee Establishment Emergency Declaration Resolution of 2007".
Sec. 2. (a) On November 7, 2007, the United States Attorney for the District of Columbia 28 announced the arrest of 2 District of Columbia employees, in connection with a "massive property tax refund fraud scheme that was designed to steal tens of millions of dollars from the District of Columbia by approving and issuing fraudulent property tax refunds from the District of Columbia's Office of Tax and Revenue ("OTR")."
(b) The indictment alleged that from 2004 through the present, the 2 arrested OTR employees, and others, were involved in preparing or approving fraudulent property tax refund requests to generate more than 40 separate fraudulent refund checks averaging more than $388,000 each.
(c) At the beginning of the investigation, approximately 42 fraudulent refund checks had been identified that resulted in a loss of over $16 million to the District, a loss figure that has now been estimated to approach $31 million.(d) The law enforcement investigation continues, with the extent of the scheme and magnitude of the fraud still being assessed.
(e) The Office of the Chief Financial Officer was created by the Congress of the United States during the control period. Congress established the duties and responsibilities of the office, independent from control of local elected officials, and still sets the compensation level of the Chief Financial Officer.
(f) Section 413(a) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 788; D.C. Official Code § 1-204.13(a)), provides that the Council, or any committee or person authorized by it, shall have power to investigate any matter relating to the affairs of the District, and for that purpose may require the attendance and testimony of witnesses and the production of books, papers, and other evidence.
(g) Council Rule 251 authorizes the Council to create special committees to consider investigations, ethics, and other matters by resolution, approved by 2/3rds of the members of the Council, and that such committee may use subpoenas to obtain testimony or documents if the resolution creating the special committee authorizes the issuance of subpoenas.
(h) The primary purpose of the Council Office of Tax and Revenue Investigation Special Committee will be to investigate systemic flaws in the management and control systems of the Office of Tax and Revenue that permitted millions of dollars of District of Columbia funds to be stolen, to ensure the integrity of the Office, and to determine what steps are necessary to prevent a future occurrence of these fraudulent activities.
Sec. 3. The Council of the District of Columbia determines that the circumstances enumerated in section 2 constitute emergency circumstances making it necessary that the Council Office of Tax and Revenue Investigation Special Committee Establishment Emergency Resolution of 2007 be adopted on an emergency basis.
Sec. 4. Effective date.
This resolution shall take effect immediately.
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