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Natwar M. Gandhi 
Chief Financial Officer Announces Reforms at Tax and Revenue
November 14, 2007




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November 14, 2007
CONTACT: Natalie Wilson
(202) 442-8072


Chief Financial Officer Natwar M. Gandhi announced today reforms at the Office of Tax and Revenue as a result of the tax fraud allegations.

The reforms include:

  1. 10 employees have either been removed or resigned from the Office of Tax and Revenue.
    We are continuing to review the entire OTR structure and will take appropriate administrative action against those both directly and indirectly responsible for this situation.
  2. Interim appointments - 6
    1. Ben Lorigo, Director of OTR (Director of OCFO's Office of Integrity and Oversight) (bio attached)
    2. John Keenan, Director of Operations (OTR's Chief of Criminal Investigations) 
    3. Terry Hallihan, Director of Real Property Tax Administration (RPTA) (OTR's Deputy Director of Compliance)
    4. Philip Appelbaum, Chief Assessor
    5. Doris Brown, Chief of Assessment Services Division (ASD) f. TBD, Manager of Adjustments

Review of OTR Operations

  1. DC Inspector General:
    1. Ben Lorigo met with the IG November 9. A formal request to the IG was made November 13 to complete a review of the Real Property Tax Administration. The timeframe for completing the review depends on when IG can obtain clearances from the US Attorney.
  2. Internal Revenue Service:
    1. A formal request was made November 13 for any assistance the IRS can give, e.g., input to the information technology staff from the perspective of a user of tax systems.
  3. U.S. Treasury Inspector General:
    1. An informal request has already been made for auditors, retirees with backgrounds in tax administration.
  4. Judge Stanley Sporkin
    1. I have asked Judge Sporkin to be my personal advisor, and to review OTR operations and all elements of the investigation, and make recommendations to strengthen OTR controls.
    2. Judge Sporkin was Director of the Enforcement Division at the SEC before becoming General Counsel at the CIA and a federal judge.
  5. Expansion of 010 staff
    1. I am expanding our 010 staff to include 3 auditors who will have specialized experience in auditing tax systems, and who will be assigned full-time to conducting audits of OTR.
  6. All refunds $10,000 and over are being approved by upper management.
    1. A special unit will review all details of real property tax refunds before they are finally authorized and paid.
    2. This will be manually controlled immediately.
    3. Within 30 days an IT fix will be implemented - a "hold for review" queue in the Integrated Tax System (ITS) when an RPT refund is generated in the system. The refund will be held until an authorized user releases it.

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Sebastian (Ben) Lorigo
Executive Director, Office of Integrity and Oversight

As the head of 010, Mr. Lorigo created an audit and investigative organization that is responsible for assuring the integrity, efficiency and effectiveness of the operations of the Office of the Chief Financial Officer. 010 audits and reviews cover a wide range of significant financial operations and programs throughout the District Government. 010 investigates alleged misconduct by OCFO employees, conducts background investigations, and performs proactive integrity probes of high-risk areas of OCFO operations.

When Mr. Lorigo joined the Office of the Chief Financial Officer in 1998, he was charged with establishing an integrity program for the OCFO, with specific emphasis on creating an internal security program for the critical programs and operations of the Office of Tax and Revenue. Mr. Lorigo was selected for this position upon his retirement from the Internal Revenue Service where he capped a 30 year career in federal law enforcement in several agencies.

At the IRS, Mr. Lorigo was the senior executive in charge of the IRS Internal Security Division, which was responsible for maintaining the integrity of the Internal Revenue Service, one of the most sensitive and complex organizations in the federal government. In this capacity, Mr. Lorigo managed an annual budget of $20 million and directed a program performed by approximately 500 criminal investigators nationwide. In addition to overseeing investigations of fraud and corruption, he spearheaded the use of advanced computer technology in a coordinated approach by investigators, auditors and technology experts in developing proactive approaches to detect and prevent criminal activity. A recognized leader in the federal investigative community, Mr. Lorigo was responsible for briefing the Vice President on threats to federal tax administration and representing the IRS on integrity and security issues before Congress.

Mr. Lorigo, who has a Bachelor of Science degree in accounting and a Masters in Business Administration, has been active throughout his career in developing professional training courses, both in government and in the academic community. He served on the training committee of the President's Council on Integrity and Efficiency and was President of the Washington, D.C. Chapter of the Association of Criminal Investigators. A Certified Fraud Examiner, Mr. Lorigo has addressed groups in the U.S. and abroad on fraud and is recognized as an accomplished educator and speaker on that topic.

For over 25 years, Mr. Lorigo was an adjunct professor at George Washington University, where he developed and taught courses on forensic accounting and computer fraud. He remains involved in the academic area by serving as an instructor at the USDA Graduate School's Government Audit Training Institute, where he teaches Contract and Procurement Fraud and the Prevention and Detection of Fraud

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