d.c.

States Go Old School to Fight Tax Fraud

D.C. and more than a dozen states are shunning paperless refunds to avoid being conned out of hundreds of millions of dollars.
BY  | MARCH 22, 2017

As fraudsters go high-tech to scam governments for tax refunds, some states are employing decidedly low-tech ways of stopping them.

In 15 states and the District of Columbia, tax returns that are flagged as unusual are issued as a paper refund check. The old-school method comes as tax filers are more susceptible to having their identity stolen. "When there's a suspicious situation, we send paper checks because that has to go to a physical person," says D.C. CFO Jeff DeWitt.

Things that could flag a return include the filer having a new mailing address or using a bank account from previous years.

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This Government Bond Insures Against Failure

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The first-ever environmental impact bond gives an agency some of its money back if its idea doesn't pan out.
BY  | NOVEMBER 10, 2016

As the drive for accountability in government spending increases, many are looking for ways to keep from paying the full price for programs that don't work.

In Washington, D.C., that desire has led to the first-ever environmental impact bond, issued this fall by DC Water, the city's water and sewer authority. The $25 million bond will pay for new, green infrastructure like rain gardens and permeable pavement to reduce stormwater runoff.

But if the projects don't work as expected, that's where the new financing structure comes in. Under the terms of the bond, which DC Water sold directly to Goldman Sachs Urban Investment Group and the nonprofit Calvert Foundation, the utility stands to get a multimillion discount on its total borrowing costs if the project doesn't meet a certain threshold.

It's essentially an insurance policy on the project's effectiveness. Here's how it works: After five years, the new infrastructure will be evaluated. If stormwater runoff isn't reduced by at least 18.6 percent, investors will owe DC Water a $3.3 million "risk share" payment. The payment represents a near-full refund of the 3.43 percent interest rate payments DC Water made during the first five years of the bond. After that, the bonds would likely be refinanced into 25-year bonds. DC Water would also drop green infrastructure projects and go back to so-called gray ones (like pumps and water tunnels) to reduce runoff.

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Is Paying People Not to Commit Crimes Effective?

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Washington, D.C., may offer some people financial incentives to follow the law. It wouldn't be the first.
BY  | FEBRUARY 8, 2016

If the threat of jail or job loss isn’t enough incentive not to commit a crime, here’s one more: cash money.

That’s the tactic Washington, D.C., is considering after the city suffered an alarming 54 percent increase in its murder rate last year. A similar approach in Richmond, Calif., has helped to reduce crime.

The city council in D.C. gave unanimous but preliminary approval to a bill earlier this month that would identify up to 200 young people a year considered at risk of either committing or becoming victims of violent crime. If they complete behavioral therapy, life planning and mentorship programs run by the Office of Neighborhood Safety and Engagement -- and stay crime-free the entire year -- they would get paid.

The bill doesn't specify how much participants could earn, but the program would cost an average of $1.2 million a year for the first four years, including $460,000 for stipends.

Angry council members tired of drama as Kwame charged again

Liz Farmer and Alan Blinder, Examiner Staff Writers

The Examiner (Washington, DC) June 8, 2012 

As news of another charge against former D.C. Council Chairman Kwame Brown rippled through city hall one day after he resigned in disgrace, his former colleagues said theyre shell shocked and done with the drama that has rocked the John A. Wilson Building this year. 

"I'm angry. Im furious. Those people Harry Tommy Thomas [Jr.], Kwame their behavior has disgraced the District of Columbia," the councils acting chairwoman, Mary Cheh, of Ward 3, said Thursday.

It has been an unprecedented year for the city, during which two lawmakers have resigned in the face of federal charges.

In January, Thomas became the first council member of the Home Rule era to resign when he abruptly left office before pleading guilty to stealing more than $353,000 in city funds.

Five months later, Browns resignation came hours after prosecutors charged him with bank fraud for allegedly lying about his income on a loan application.

Marion Barry lectures on ethics during chaotic Council session

June 13, 2012

Liz Farmer
Washington Examiner Staff Writer

The D.C. Council is in such disarray that Marion Barry -- convicted of drug and tax offenses -- is lecturing his colleagues on ethics.

"We are the laughingstock of the nation," Barry said Wednesday.

At-large Councilman David Catania took a shot back at the "Mayor for life."

"The worst perpetrators are sitting on this dais," Catania said, lamenting the fact that a "member of the [Finance and Revenue] Committee is a convicted criminal, hasn't paid his taxes and yet he's allowed to lecture others on ethics and vote on tax policy."

The exchange was part of a 100-minute session to select a new chairman that saw another legislator in tears, a would-be chairman declaring he is "the best" and plenty of gavel-pounding and fist-banging for effect.

D.C. Council chair resigns after fraud charge

June 6, 2012 

By Liz Farmer and Alan Blinder
Washington Examiner Staff Writers

D.C. Council Chairman Kwame Brown was charged Wednesday with bank fraud and quickly resigned, making him the second District politician this year taken down by federal prosecutors who have been probing corruption throughout city government.

Brown, whose 2008 re-election campaign has been under investigation for nearly a year, is facing a single felony count of bank fraud. The charge is not linked to any of his political campaigns.

Brown was charged in a criminal information -- a type of filing that indicates a guilty plea is imminent -- with lying on an application to extend a line of credit on his home. Brown used some of the loaned money to purchase a 38-foot powerboat named Bullet Proof, prosecutors said.

Former Councilman Harry Thomas Jr. gets 3-plus years in prison

Liz Farmer and Alan Blinder
The Washington Examiner

May 3, 2012 

Former D.C. Councilman Harry Thomas Jr.was sentenced to more than three years in prison Thursday for stealing $353,500 in public money meant for youth sports, an act that prosecutors described as a betrayal of the public trust.

Thomas, who represented Ward 5 for five years until he resigned in January as part of his guilty plea, was allowed to leave court with his family and has agreed to surrender at a federal prison to serve his 38-month term when ordered.

"This is my weakest moment in my life," Thomas, 51, told U.S. District Court Judge John Bates, adding that he has had time to reflect on his crimes after a lifetime of working with local kids through sports programs.

"I concluded I took that money because there was a sense of entitlement," he said. "What happened, clearly, was I took office and lost touch with the values I cling to now more than ever."

On sentencing day, Ward 5 residents split on Harry Thomas Jr.

May 2, 2012
Liz Farmer
Washington Examiner

As their former council member is set to be sentenced in federal court Thursday, the District's Ward 5 residents are split among those who forgive Harry Thomas Jr. and those who don't.

Bob King, the longest-serving advisory neighborhood commissioner in the city and a Ward 5 resident, said the split tends to fall along racial and age lines.

"When you talk with the seniors, they're very passionate about their love for Thomas," said King, who also worked on Thomas' 2006 election campaign. "But it's also true ... that candidates are hearing from people, 'If I vote from you, will you steal the money?' There's a lot of shame and anger."

And even as residents and officials are looking for closure Thursday with Thomas' sentencing, the investigation into the Children and Youth Investment Trust Corp. continues. Thomas used the corporation to funnel more than $350,000 in grant money into his pockets, and both the feds and the city are still looking into how that happened.

Former exec: Pressure from city leaders aided misuse of funds

April 28, 2012
Liz Farmer
Washington Examiner Staff Writer

The organization that a former D.C. councilman used to steal money from kids became inundated by pet projects of the former administration and council members, a former board member told The Washington Examiner.

The result was that private funding for the city-run Children and Youth Investment Trust Corp. nearly dried up as foundations' faith in the organization's political independence plummeted, said former board chair John Hill. The trust typically hands out between $14 million and $19 million annually.

When the trust was founded in 1999, private funders were often able to stipulate where their money went and work with local nonprofits to maximize results, Hill said.

"And all of that changed when the administration changed [to former Mayor Adrian Fenty], and there was a feeling that there should be greater control over where the money went within the government," Hill said. "That's certainly what [former] Councilmember Harry Thomas exploited and also what led to concerns by outside funders."

No swearing rule highlights D.C. council tensions

February 21, 2012
Liz Farmer
Washington Examiner Staff Writer

The D.C. Council has banned swearing from all its public meetings after a dustup last week between two members at a council retreat led to outrage from some residents.

But the swift action pushed through by Council Chairman Kwame Brown on the matter has some people saying the ban is just meaningless posturing.

At-Large Councilman David Catania, whose expletive-laced outburstlast week at Ward 8 Councilman Marion Barry prompted the change to the council code of conduct, said he's still not apologizing for swearing at another member -- although he did vote in favor of Tuesday's resolution.

D.C. auditor says more fraud possible in city grants

January 23, 2012
Liz Farmer
Washington Examiner Staff Writer

A District auditor has warned that more fraud could lie ahead if the D.C. Council does not immediately take steps to enforce better oversight by the city organization that former Councilman Harry Thomas Jr. used to embezzle more than $300,000.

In a letter to Council Chairman Kwame Brown, City Auditor Yolanda Branche said a lack of sufficient internal controls "enabled the embezzlement" of District funds.

"We strongly urge the Council to immediately take steps toward restoring the public trust and protecting the resources of the District of Columbia from further fraud mismanagement and abuse by implementing the recommendations in this memorandum," Branche said.

The memo was written in response to Brown's request for

City hall rocked by charges against one of their own

January 6, 2012
Liz Farmer
Washington Examiner Staff Writer

The District's John A. Wilson Building was the scene of frantic scrambling for information and then shock and sadness Thursday as city hall officials and staff members absorbed the news that their colleague Harry Thomas Jr. faced prison time on charges of stealing from the city.

"He's disgracing himself, the District and his family," said Ward 3 Councilwoman Mary Cheh. "It's really been a lot to take on. I don't think he's a bad person -- I've known him for four years and I consider him my friend. But nobody's above the law."

Thomas said he would plead guilty in court Friday to the theft and tax fraud that federal prosecutors said began just months after he entered office in 2007. He resigned from office "effective immediately," according to a statement issued Thursday night.

In that statement, he acknowledged that he had caused pain to his family, friends and constituents.

"I made some poor decisions and acted in ways I simply should not have," he said in the statement. "I was wrong. I want to apologize to those I have let down, including my constituents, neighbors and friends."

D.C. Councilman Harry Thomas Jr. resigns, will plead guilty

January 5, 2012 

By Liz Farmer
Washington Examiner Staff Writer

Embattled D.C. Councilman Harry Thomas Jr. resigned Thursday night, and said he would plead guilty to charges of stealing $365,000 from federal grants meant for youth baseball programs at a court hearing Friday.

Thomas, who represents Ward 5, faces up to 13 years in prison if convicted on counts of tax fraud and theft brought against him by federal prosecutors.

"I made some very serious mistakes and exhibited inadequate and flawed judgment," Thomas said in a statement released Thursday night. After admitting he committed "two federal crimes," Thomas said he would enter the guilty plea when he appears before U.S. District Judge John D. Bates on Friday.

"I take full responsibility for my actions. I am truly sorry," he said in the statement.

D.C. Council passes ethics reform

December 20,2012
Liz Farmer
Washington Examiner Staff Writer

The D.C. Council on Tuesday passed a sweeping ethics reform bill after a year that saw five of the city's council members -- and the mayor -- touched by scandal.

But some say the reform doesn't go far enough and question how long it will take to implement changes that include establishing a new city board at a time when the District is tightly managing its budget.

Council Chairman Kwame Brown, whose 2008 campaign is under federal investigation, had been adamant about passing ethics legislation before the end of the year. But when asked whether he'd institute a similar deadline for establishing the Board of Ethics outlined in the bill, he was vague.

"We're going to do everything we can to move quickly," he said after the vote.

Dorothy Brizill, a council critic and founder of DC Watch,said she was skeptical residents would see any quick results.