He’s endured three mayors over 13 years and helped a troubled city emerge from the reign of a financial control board. He survived the largest embezzlement in city history in which one of his tax office employees systematically robbed the District of Columbia of $48 million over nearly two decades. He’s butted heads with mayors and city council members, earning himself the nickname “Dr. No” for his ability to derail projects that he determines don’t have the proper funding mechanisms.
D.C. Chief Financial Officer Natwar Gandhi, who plans to retire in July, has even surprised himself with his longevity.
“I am amazed that I’ve survived 13 years here,” says the 72-year-old native of India during a wide-ranging interview this spring with Governing. “It’s nothing short of a miracle that I survived the Harriette Walters scandal.”
But this unassuming-looking man whose accent gives his voice a sing-song cadence, who is also an accomplished poet and has even dabbled in acting (appearing last year as Mahatma Gandhi in a local stage production), is a shark when it comes to the District’s financial well-being. He has doggedly lived and thrived by the city’s bottom line after taking over D.C.’s finances when it was under the auspices of a Congressionally appointed financial control board, running a $518 million deficit and bonds were at junk status.
Today the city boasts 16 straight years with a balanced budget (including every year of Gandhi’s tenure), has been out from the shadow of the control board for nearly a dozen years and holds a $1.5 billion rainy day fund and a double-A general obligation bond rating. It’s a turnaround story that has earned him many honors, including being named a Governing Public Official of the Year in 2007, and has been the envy of cities across the country struggling with their own fiscal health following the recession.
But, of course, there’s a catch.
“Had [my office] not been independent, then obviously I cannot do any of that,” Gandhi says. He adds that he often gets inquiries from other cities asking how D.C. has been so successful and that some congressmen have even suggested that he run the Office of Management and Budget. “The question here is … I don’t think Congress or a president or any mayor or any governor would want to see a CFO of that power,” Gandhi says. “You are basically encroaching upon their prerogative, their powers and they don’t like it. Because when we explain to other mayors, other municipalities, that this is what it takes, they say, ‘No, no.’”
"You Have to be Obsessed"
Gandhi says his office’s independence has required that he guard the city’s financial viability above all else. The office of the CFO was established in 1995, as part of the same act of Congress that created the control board that year to take over D.C.’s finances. The CFO was given extraordinary powers, including the ability to nix legislation that did not include funding if additional money outside the regular budget was needed. Additionally, although the mayor and council are responsible for appointing and confirming the CFO, the office is separate from the executive and legislative branches. That means that the CFO can’t be fired without cause – and such an action would have to be approved by Congress.
In exchange, however, the CFO is a slave to what’s commonly referred to as the Seven Deadly Sins: a list of events that could trigger the reinstatement of the control board, which has been dormant since October 2001. The list includes any default on payment for borrowed money, failure to meet payroll or the existence of a cash deficit at the end of a fiscal quarter that is not projected to balance out during the next six months to a year.
The obligation of the CFO, Gandhi says, is to ensure that the control board is never reinstated. “And whatever it takes to do that – I’ve had to say “no” to many, many things,” he says, adding that’s what earned him the nickname Dr. No.
“At the end of the day, it is your responsibility to make sure the city remains financially viable. And that if you ever miss that, then you basically have no business being here,” Gandhi says. “So you have to be obsessed about this. And your staff around you, up and down the line, must know that this is the paramount obligation of the CFO.”
Still, Gandhi’s tenure has not been without major missteps. The most egregious was in 2007, when investigators said D.C. Office of Tax and Revenue Manager Harriette Walters had stolen $48 million in the largest public corruption scandal in city history. Walters had siphoned off the money by manipulating an antiquated property tax refund system over 17 years. Investigators found Walters spent most of the money on gambling and lavish buying sprees. In a raid on her home, investigators found 100 pieces of jewelry, a mink coat, 90 designer handbags and piles of cash reportedly stored in her bathtub.
Gandhi, whose resignation in response to the revelations was rejected by then-Mayor Adrian Fenty, calls that time “one of the darkest moments of my professional career.” The lesson he learned, he says, is that one must be eternally vigilant. Additionally, a government can have all the controls in place but until that matching mindset and a code of ethics is truly embraced by employees, there will always be holes. After all, Walters didn’t act alone – she and 10 co-conspirators in the scheme eventually pleaded guilty to theft. “You can teach them all that [ethical] stuff and we do every year,” Gandhi says. “But until it’s part of their psychic makeup, way of life, then no matter what you do, you always have people who want to cheat.”
Advice for a Successor
Although he announced his planned retirement in February, Gandhi has agreed to stay on with the city until mid-July, after the council breaks for the summer and a 2014 budget is expected to be approved. That, he hopes, will also give time for a search committee formed this winter to find his successor. Although the independence of the office makes it uniquely powerful, Gandhi warns that being the D.C. CFO is “extremely difficult” and “among the most stressful jobs in Washington,” already a high-stress town. His successor “should be prepared to lose hair,” jokes Gandhi, who is mostly bald.
But above all, the city’s CFO’s independence should not separate him from the rest of government. In fact, it’s quite the opposite – Gandhi meets regularly with council members, the mayor, deputy mayors, journalists, community leaders, business leaders, the Chamber of Commerce, the Federal City Council, to name a few. Above all, he says, his approach is to try to understand the perspective of the other side when it comes to debates about how D.C. spends its $10 billion budget.
“We don’t have to agree but at least we know where we are coming from,” he says. “So, that willingness to understand the opposite perspective, the opposite viewpoint gains you credibility. I can unilaterally say ‘Sorry, we’re not doing it.’ And that would not be the right thing to do.’”
A New Love in His Life
In retirement, this finance shark plans to finally loosen up. “I’m not going to do any nine-to-five jobs – I’m at an age where I can afford to do that,” he says. He added he has “a new love” in his life, referring to Panna Naik, an Indian poet and a longtime family friend whose husband passed away in 2011 (Gandhi was widowed in 2009). During a trip to India over the past winter holidays, Gandhi says the two agreed that with whatever time they had left, they would concentrate on poetry.
It means that Gandhi will leave his office after serving just one year of the five-year term he was reappointed to in 2012. But he says he’s doing so on his terms, at a time he feels he is leaving the city on solid financial ground.
“I would say at the end of the day as an immigrant I had a sense of obligation to do something for a country that has accepted me,” he says of taking the CFO job back in 2000. “And this was a rare opportunity for me to pay back what I have so profusely and profoundly received.”