The Jack Evans Report: This Is Getting Old

It seems like not a week goes by
without another news story about an
irregularity in the office of our Chief
Financial Officer. The latest revelation
was last Tuesday morning, in which news
outlets reported a criminal indictment of a
CFO employee accused of assisting with
more than $300,000 in fraudulent District
tax refunds (and more than $3 million in
federal taxes). I remain very concerned
that we don’t have the types of controls
that prevent fraud before it takes place.
I believe the District stands a chance of
receiving restitution for these amounts and
will follow up to ensure it is done.

Then, later the same day, I was told
that the CFO received a letter from the
Securities and Exchange Commission
asking for copies of audits, document
retention policies and other information
that were the subject of my hearing earlier
this month. I am a former Securities and
Exchange Commission Enforcement
Division lawyer, myself, and I believe
that the goal of the inquiry is to determine
whether the city’s bond offering documents
contained any material omissions about the
state of our tax office that should have
been disclosed to investors prior to selling
our bonds.

As a practical matter, the number of
recent news stories on the audits prior to
the bond sale most likely ensures that all
potential bond purchasers were aware of
the information prior to purchase. The
interest of the SEC, even in the form of
an informal inquiry rather than a formal
investigation and subpoena, is of great
concern to me. I have asked for regular
briefings from the CFO on these matters
and will continue to conduct regular
oversight over Gandhi’s office. I have
been a consistent defender of Gandhi, but
the constant drum beat of negative news
from that office is a problem that must be
addressed.

On a lighter note, I wanted to write at
least one more article about the Washington
Nationals this year – is it too soon? I made
a point of purchasing tickets to all the
playoff games to support our team and
our city, and while I am so proud of our
historic season, I am also disappointed that
our playoff run got cut short. Anyone who
was at the game for the Thursday night
win, though, will tell you that there was an
electric feeling in the stadium and a real
sense of community.

When I last wrote about our team, in
August, the Washington Nationals had the
best record in Major League Baseball. It
was then widely reported that you have to
look back to 1945 to find the last time our
team was 20 games above .500. This whole
season has been an experience in uncharted
territory. Not only did the team perform so
well, but the area around the ballpark is
now beginning to develop rapidly. I cannot
begin to tell you the number of articles I
read about the failure of this concept. With
a little patience, I knew the investment
would pay off.

As we move squarely into fall, I hope
everyone has a safe Halloween. Please
keep in touch with my office, and let me
know what issues are of interest to you. ?