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Councilmember Jack Evans
Committee of the Whole and Committee on Finance and Revenue joint public oversight roundtable on the operations of the Office of Tax and Revenue

November 15, 2007




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Councilmember Jack Evans

Remarks for November 15, 2007 Oversight Hearing on the OTR Corruption Scandal

Good afternoon, and thank you Mr. Chairman for working together with me to make this hearing happen quickly.

I thought I had been here long enough to have seen it all. But just when we thought that the worst was behind us, we are shocked by something that shakes our confidence. I thought that when the District's finances collapsed and the Control Board took over we had seen our darkest days.

Perhaps it is because we have come so far, that this scandal wounds us even more deeply. Yes, the District finances have improved. Yes, the systems of checks and balances have been improved. And yes, new technologies have been implemented to propel us into the new century. But when a few devious employees can scam the system, steal enormous sums and undermine the progress we had made, we are collectively outraged, outraged - and all those systems, technological improvements, and smart people who promised us a more accountable government should be carefully questioned.

After years of disappointment and frustration, it has been my experience that we get what we inspect, not what we expect.

So we are here today to undertake an inspection. We need some direct answers to some difficult questions. And our job, as unpleasant as it may seem, is to ask the hard questions.

I have worked closely with Natwar Gandhi for the past 10 years. He has instilled a degree of professionalism and planning and accountability to what had once been a financial morass so bad, that DC had become the butt of late night jokes. But now we find out that some of the very systems that we had counted on to protect us from scandal and theft simply didn't exist.

What outrages us even more is that at the very moment that we had come close to securing a vote for the District in Congress... at the very moment that we had come close to achieving voting rights for the District, at the very moment when we had elected a new Mayor who conveys a new hands on style of leadership, and have an engaged and energetic Council, the very confidence we have tried to build upon has been undermined. It's a sad day here in the District of Columbia.

I am asking Dr. Gandhi -- the ultimate protector of our government resources - to address the suggestion that a $16 million dollar loss is insignificant in the scheme of a multi billion dollar District budget. We now understand this to be a loss may be twice that amount and perhaps more. We receive scandalous new details every day. I sit here today and am clear that no time is it acceptable for public officials to dismiss the outrage we feel at this rip off by suggesting that it simply isn't much in the big picture. You may routinely deal in millions and billions of dollars, but I don't have to tell you that this is the largest and most prolonged rip off ever seen in the District - and we've seen quite a lot.

To his credit, Dr. Gandhi has acted quickly since the recent arrests. He immediately fired those responsible for running the Office of Tax and Revenue. No doubt, that was the right thing to do. The question we are left with is why the leadership of OTR are held responsible and not those who preceded them. I have spoken to Mr. Gandhi and expressed my concern and want to open this inquiry with a question that hangs in the air: This scheme seemed to be going on while you were the head of the tax office. Why should you not bear the same responsibility as those who have been fired?

We are here today to learn what happened and find out what can be done to change the oversight of our financial management to stop the theft and repair our confidence in the future. But I am bothered enough by the revelations of the last few days to ask questions about the rest of the CFO's portfolio. What was our internal auditor function at OCFO doing during this time period? What did the financial managers in OCFO know about these accounts and did anyone ever raise any questions? How could there ever be a system in place where a mid-level employee has final approval over checks totaling in the hundreds of thousands of dollars? How could we employ people who may well have noticed the whole thing, but said nothing? In short, are we really balancing the checkbook every night, week, month and year, or are we playing "let's pretend"?

As I said earlier, we get what we inspect, not what we expect. We can't just have high expectations of our employees - because those expectations have been dashed -- it is high time that we inspect our money management more closely.

And I don't think the problems are just here in one department - but quite possibly we have a bureaucratic culture that is rotten in many places. Colby King of course had his column this past weekend and there are problems large and small in many departments.

Nearly a decade ago when we had tax returns in boxes on the floor and we had a city audit that came in both late and inadequate we did what we had to do - we rolled up our sleeves and undertook rebuilding those functions of our financial affairs issue by issue, day by day. Mr. Chairman, it's time we do that again. Its time we heard some answers to these and many other questions that swirl around.

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