News & Politics

“Dr No” The District’s Natwar Gandhi

Remember when Marion Barry was mayor and the District was a financial mess? The man who fixed things arrived here from India with $7 in his pocket.

The DC government often has presented itself as a multibillion-dollar enterprise in need of adult supervision. Marion Barry, a night owl for most of his 16 years as mayor, did not instill executive confidence, and the DC government floundered.

The DC council tried to supervise but often was ineffectual. Members legislated and squabbled in equal proportions.

Anthony Williams seemed to offer grown-up qualities when he took office as mayor in 1999, but he lacked the bearing that signals that "no" means "no."

DC finally got an authentic adult manager in the person of an accountant from halfway around the world. Natwar Gandhi was born in India 64 years ago. He has been handling DC's finances since 1997, when Tony Williams begged him to leave his safe job with the federal government's General Accounting Office to try to track the funds flowing to and from the District's coffers.

He is no relation to the legendary Indian leader Mahatma Gandhi, "but I was born in the same place where the other Gandhi comes from," the state of Gujarat. His village had no electricity or running water–"profound poverty," he says.

Now Natwar Gandhi is the public official who wields the most power over the city of Washington, DC.

President George W. Bush has the highest statutory power, but like most presidents he has largely ignored the city. As mayor, Tony Williams is DC's titular head, and he hired Gandhi, but he can fire him only with the approval of Congress and the DC council.

Gandhi is the last vestige of the federal financial-control board established in 1996 to keep the District from going broke. It controlled District purse strings; now that's Gandhi's job.

Can the District build a publicly financed baseball stadium? Only if Gandhi certifies the plan.

Can same-sex couples file joint tax returns? Not if Gandhi declares that it would violate tax law.

Want to start a gambling casino using the District's lottery? You have to get the idea past Gandhi.

Want to float a bond? Not if Gandhi gives it a thumbs-down.

"Before Gandhi arrived," says one former DC budget officer, "we balanced the books with funny money."

The laughs are over.

As chief financial officer and head of DC's finance-and-revenue department, Gandhi is responsible for collecting taxes, estimating revenues, counting the money, preparing budgets, all aspects of borrowing, the lottery, financial presentations to Wall Street and Congress, and the annual audit. Ultimately, his job is to balance DC's books.

City-council member David Catania accuses Gandhi of making up numbers and underestimating revenues to prevent the council from overspending. He has dubbed Gandhi "chief fictional officer."

"Call me what you like," says Gandhi. "At the end of the day I have to come to you with a balanced budget."

Gandhi says this with the imperious voice and dignified manner that come from his upbringing in an ancient culture that is a former British colony. The glint of his eyes through his wire-rim glasses and the clipped British accent give him an unassailable bearing.

What's unusual is that Gandhi is one of the few powerful men in Washington who doesn't flaunt his power. He has never been covered in an extensive profile.

It took weeks and a breakfast and a lunch before Gandhi relented to a series of interviews. First he sent me his recently published book of sonnets, America, America, based on his travels across the United States. It's written in Gujarati, his native tongue.

The chief bean counter is a poet. Who knew?

The celebration of Gandhi's fifth year as chief financial officer was held one spring afternoon on the grand second-floor landing of the John Wilson Building. On hand were staff members, a few business, labor, and government luminaries, and one reporter.

Steve Harlan, a pillar of the accounting community and member of the now-defunct financial-control board, toasted Gandhi. Alice Rivlin, budget director in the Clinton administration and former chair of the control board, thanked him for guiding the District from financial chaos to its current standing as maybe the nation's most financially solid city.

Said Jack Evans, chair of the DC council's finance committee: "It's been five years since we asked, 'Who's in charge here?' "

Before Gandhi took charge, the District was in financial ruin. In 1996 it ran a $518-million deficit. Gandhi arrived on the scene in 1997 as deputy to then-chief financial officer Anthony Williams. Marion Barry was mayor. That year the team headed by Williams and Gandhi produced a clean audit and a surplus of $186 million. After Williams was elected mayor in 1998, Gandhi became his second chief financial officer, and the city's financial fortunes continued their recovery.

"In Virginia they're fighting budget deficits," Evans reminded the celebrants. "In Maryland they're trying to balance the budget on slot machines. Yet here in DC we have budget surpluses and double-A bond ratings.

"Five more years," Evans said.

Perhaps the greatest testament to Gandhi's success came from the natural enemy of numbers crunchers in municipal government, the unions. Geo T. Johnson, executive director of AFSCME, which represents many DC-government employees, stepped up after Evans.

"We started out doing business together," said Johnson, "but business turned to friendship. I credit Nat Gandhi with keeping jobs and keeping the government healthy. Thank you, thank you so very, very much."

I caught Geo T. Johnson on his way out and asked what he thought of Gandhi. At one of their first negotiating sessions, after Gandhi had fired DC workers and had refused to honor claims for back pay, Johnson had called him "an SOB," threatened to run him out of town, and stalked out of the meeting.

What about now?

"I love the guy," he said.

Anthony Williams called Gandhi in late 1996, shortly after becoming the city's first chief financial officer under the control board while Marion Barry was mayor. They met over lunch at the Old Ebbitt Grill.

"Why me?" Gandhi asked. "I can't imagine a city that is 60- to 70-percent black would want an Asian immigrant with an accent to be head of the taxoffice."

Williams convinced him that competence would win out over color or accent. Gandhi accepted.

His decision was in keeping with a life of taking on challenges. His first was the decision to leave his village as a teenager to seek work and an education in Bombay.

"My father was a grocer," Gandhi says in a booth in the Old Ebbitt Grill, his favorite meeting spot. A slender man, he's wearing his trademark dark suit. "I was the oldest in a family with three brothers and three sisters. My father expected me to stay and take care of the family."

But the eldest son had other plans. He landed a job with a trading firm in Bombay and enrolled in college.

"At heart I am a literary person," he says. There were no books in the grocer's home, but a teacher in the village introduced young Gandhi to the library, where he fell in love with Thoreau and Robert Frost, Emerson and Wallace Stevens. "But being literary and loving books doesn't put bread on the table."

He settled on accounting as a safe career. He returned to the village and asked his father if he could continue in college. His father said no. Gandhi returned to Bombay and enrolled in Sydenham College, the first business college in Asia, established by the British to train clerks for the colonial government.

But Natwar Gandhi had always dreamed of living in another former British colony, the United States. He had been reading American authors and newspapers since childhood.

"In the 1920s, immigrants from India came as laborers until Congress established quotas," he says. "But in the mid-1960s the quotas were lifted, and the immigrants from India were skill-based. There was a mass migration of engineers and doctors."

A college friend encouraged Gandhi to apply for advanced education in the United States. He sent letters from Bombay and was admitted to a school in Atlanta. In 1965, with the help of Atlanta's Herndon Foundation, he flew to America. "I came literally with seven dollars in my wallet and a few clothes," he says.

After getting his master's degree in business at Atlanta University, he took a teaching job at North Carolina A&T, a historically black college in Greensboro, in 1966, the heart of the civil-rights movement. While he was there, Stokely Carmichael blew through.

"He was magnetic," Gandhi recalls, "mesmerizing. I began to realize that discrimination is a form of evil. It limits human potential."

Gandhi took some classes at the University of North Carolina at Chapel Hill. He'd brought his wife, Nalini, from India. They had the first of two children. Comparing the plush state school in Chapel Hill then peopled mostly by whites to the black state school in Greensboro, he asked: "How could they treat people so differently in the same state?"

Gandhi says he witnessed more racism when he got his accounting doctorate at Louisiana State University in Baton Rouge. He felt much more comfortable in Pittsburgh, where he taught accounting at the University of Pittsburgh from 1973 to 1976.

"But I believed my heart was in Washington," he says, mainly in the realm of policy and law. He landed a one-year fellowship at the General Accounting Office in 1976. He became expert in the arcana of taxing insurance companies.

Gandhi fell in love with Washington and never left.

Congress was in the mood for reform in those days. Chicago's Dan Rostenkowski and Pete Stark of Oakland were running the House Ways and Means Committee. In the young GAO accountant from India, they found someone who could boil the details of tax policy into a 15-minute briefing.

"Congress wanted more and more," says Gandhi, who helped rewrite laws and regulations that closed loopholes in the way insurance companies are taxed. He worked his way up to associate director of tax policy and administration.

"In 20 years at GAO," he says, "I lost all my hair." But he never lost his perspective.

In 1988, when Dan Quayle said in a debate with Lloyd Bentsen that "America is the envy of the world," Gandhi penned an essay for the Wall Street Journal.

"Even after more than 20 years," he wrote, "I never quite get used to how good life is–especially for the common man." That was quite different from India, where the caste system still sorts out untouchables, he pointed out.

"In singing America's song, I am not ignoring what is bad and ugly–crime, drugs, social promiscuity, the homeless. And yes, occasionally I do feel the sting of discrimination–crank calls from crazies saying they hate foreigners. But despite all the negatives, I say America is indeed the envy of the world."

Colleagues at GAO did not envy Nat Gandhi's decision to quit the federal agency for a job with a District government that was by all accounts inept and maybe corrupt. "You must be crazy," Gandhi says he heard from many.

He was 57, living in Silver Spring with his wife and two children. In the federal bureaucracy, he saw no great challenges before him. "I basically had had enough of GAO," he says.

So he accepted Tony Williams's offer to run the tax office. Gandhi's management method was to walk the floor, talk to his staff, and look behind doors. In an incident that has become legendary, he opened one door and discovered mounds of tax returns.

"What is this?" he asked an aide. It was piles of returns that had been received but not processed.

"I knew things were bad," Gandhi recalls, "but I didn't think they were that bad."

Gandhi started by doing something unusual in the District government: He fired virtually all of upper management. He replaced them with professionals he had worked with at GAO and the IRS. He called the new and old staff members together and said, "We are a joke! Our pride is at stake. We can do better than Virginia and Maryland."

He challenged staff members to process returns and send refunds in two weeks. They did. He challenged them to create a way for taxpayers to file on the Internet. They created the first such system in the country.

In June 2000, Williams appointed Gandhi chief financial officer. He had one simple priority set forth by the financial-control board: Continue to balance DC's books. There had been surpluses in 1997, 1998, and 1999. One more year would make four years, at which point the control board would return financial autonomy to the District.

"I am obsessed with deficits," he says.

On January 30, 2001, the Washington Post ran a banner headline: DISTRICT COMPLETES ITS FISCAL COMEBACK. Gandhi had turned in the fourth-consecutive balanced budget, this one with a $241-million surplus. The District took control of its books.

In November 2001, the city council approved Gandhi's nomination for a full five-year term.

When gambling interests began their quest last year to bring gaming to the District, their first stop was to visit Nat Gandhi.

"You have control over the lottery," Gandhi recalls one of the lobbyists saying. "We can set up video-gambling terminals as part of the lottery. We don't need approval from the mayor or the council. How about it?"

Gandhi took a field trip alone to Dover Downs, a racetrack in Delaware that has gambling on video terminals.

"I saw plenty of older women playing the terminals," Gandhi recalls. "It was raw gambling without the glitz of a place like Atlantic City."

Back in the District, he met again with the gambling group's fixer. "I'm independent," Gandhi told him, "but I'm not a fool." He refused to fold the gambling terminals into the lottery. The gambling group tried to bring the proposal to a referendum, but it failed to make the ballot amid charges of fraud and forgery.

Gandhi's independence and his tight hold on the city's money have won him some critics. When Gandhi first fired city workers, Delegate Eleanor Holmes Norton suggested he was the one who should be fired.

Councilmember David Catania seems continually peeved by Gandhi's lowballing of revenue estimates. The two have had some testy exchanges, most recently when Gandhi backed a plan to build a baseball stadium with public funds.

School-board president Peggy Cooper Cafritz has been infuriated each time Gandhi tells her she must remain within her budget and cannot run a deficit. "She questioned my integrity," he says.

But no one, he says, has accused him of making decisions based on race–the factor that controls much of DC's political life.

Says Gandhi: "Race has never become an issue for me."

When Natwar Gandhi became DC's chief financial officer, he and his wife moved into a condominium along Connecticut Avenue near Van Ness.

If you drive down Connecticut Avenue around 3:30 AM and see a glow from a condo window, it might well be Gandhi's. "By 4 AM I have my first cup of tea," he says.

He scans five newspapers on the Web: the Post, New York Times, Wall Street Journal, Washington Times, and Washington Examiner. He might send an article or two to his staff and review documents that have deadlines that day.

"If I have time left, I might revise some poetry," he says. His first book of poetry was about the United States; his second will be about India and what it's like to visit after 35 years. •

By 6:15 he's usually on the treadmill in the gym in his condo building. While he sweats, he listens to books on tape. He loved Barnard College political scientist Dennis Dalton's lectures on human dignity. He recently finished Maestro, Bob Woodward's book on Alan Greenspan.

At 8 AM, after a light breakfast, he hops into his car and drives 20 minutes through Rock Creek Park to the District Building. What does he drive?

"I don't know," he says. "I think it's a Toyota. My kids made me buy a new one in 1999."

Before that he bought used rental cars from Avis or Hertz. It was not for lack of income. His annual salary is $180,100.

Gandhi spends much of his day in meetings, often with groups he has created. He has set up a tax advisory council and a business advisory council and a community advisory council. He meets regularly with members of the city council.

"Even with Catania," he says, "my most bitter critic."

Nat Gandhi's term is up in June 2007. What will the man who left his village to face challenges in Bombay, who left a comfortable job to tame a runaway city budget, take on next–besides creating an independent construction authority to rebuild the DC schools?

"The federal government," he says. "It imposes costs on the city and does not reimburse us."

He looks around at the lunch crowd in the Old Ebbitt Grill. "What would happen if a third of the people eating here paid for their food and two-thirds ate for free?" he asks. "The place would go broke.

"That's what we face in the District: People work here but don't pay taxes to support our services," he says. "We are subsidizing the two richest suburbs in the nation, Montgomery and Fairfax.

"Roughly half of the real property in the District is tax-exempt," he says. "We pay for state functions like DMV and school construction. The University of Pennsylvania pays taxes to Philadelphia; Harvard pays taxes in Boston. George Washington University doesn't pay a dime. All of our colleges are tax-exempt.

"Don't get me started," he says.

The tax predicament Gandhi describes is well known and maybe intractable. But Gandhi, with his connections in the federal government and his grasp of accounting and taxation, just might be the person who can change it.

The World Bank, for example, is a tax-exempt institution. Gandhi had been invited to many lunches at the bank's cafeteria, where he was served fine wine and gourmet food. He asked the bank to pay taxes on the meals. The bank said no. Gandhi went to court–and won.

Says Gandhi: "I just want to start the process of seeking more revenue for the city. I'll look anywhere and everywhere."

Gandhi would consider several solutions that have been proposed over the years: making DC federal-income-tax free; having the federal government pay for some "state" functions; allowing the District to collect a 2-percent commuter tax.

But there's one problem: Gandhi has produced so many balanced budgets and salted away so much money that DC is now one of the most solvent cities in the nation.

"That's the Catch-22," he says. "How can we cry poverty when we have $1.2 billion in fund balance and $300 million in cash reserve? The only time we're going to get any sympathy from Congress is when we go bankrupt again."