Eric Payne
Eric Payne Credit: Darrow Montgomery

Our Christian friends assure us that, wretched sinners that we are, salvation may yet be afforded us if we cast lots over our goats, plucking two unlucky beasts from the heard: The first belongs to the Lord himself (he is, by his own admission, “a jealous god”), but the second is all ours.

“And Aaron shall lay both his hands upon the head of the live goat, and confess over him all the iniquities of the children of Israel, and all their transgressions in all their sins, putting them upon the head of the goat, and shall send him away by the hand of a fit man into the wilderness” (Leviticus, 16: 21). 

Four hundred years of Enlightenment have brought us to the point when not even our most devout brethren use the word “scapegoat” to signify joy. And yet the ritual itself continues, even in secular temples.  

Two days before Thanksgiving, a civil jury in U.S. District Judge Paul Friedman’s courtroom called a halt to at least one such sacrifice. In ruling in favor of former city finance official Eric W. Payne, and ordering the District to pay him $1.7 million in damages, it not only called Payne back from the wilderness, it offered the District’s own jealous gods a rebuke.  

“This verdict shows a community commitment to combat government waste, fraud and abuse,” says attorney Brian K. McDaniel, who, along with Donald H. Temple, argued the case for Payne. “More acutely, the verdict vindicates the unbelievable personal and family struggles of Eric.”

A star from early days of the Clinton Administration, Payne was a procurement officer in the D.C. finance office until 2009, when, in a tribal battle over the city’s lottery contract, he found that his lot had been drawn and he was weighed down with all the iniquities of a corrupt city government.  

The lawsuit he filed took nearly seven years to litigate, but it’s not terribly complex. Payne claims that he was pressured by D.C. Council members to scrap a lottery contract that he had fairly, and painstakingly, awarded to a partnership between a Greek company and a local contractor. When he refused to do so, and when he exposed other corruption in the city finance office, he was ritually pulled apart, humiliated, and eventually exiled.  

Jurors in his case took about eight hours to deliberate. It wasn’t close: Payne had alleged 11 violations of the Whistleblower Protection Act, and the jury—seven women, three men—ruled in his favor in all 11. They ordered the District to pay Payne $1.7 million in damages, plus back pay and attorneys’ fees and expenses.  

The verdict seems to be a long-awaited vindication of an honorable man who has been horribly treated. Payne isn’t so sure. “I feel like my name has been cleared,” he says, “but this isn’t over yet, not by a long shot.” 

Indeed not. D.C. Attorney General Karl Racine is simultaneously beating his chest about trying to ensure honest government and threatening to appeal the verdict, presumably to whittle a few bucks from Payne’s award. His spokesman issued a two paragraph statement that boils down to “no comment.”  

“The Office of the Attorney General is required to represent the District of Columbia’s interests in lawsuits, and we take this responsibility very seriously,” the spokesman says. “Our role in this matter is that of the attorney for the city, and in that capacity, we cannot comment on the details of confidential negotiations or decisions regarding litigation.”

***

The record of the Payne case reads itself like an ancient prayer, summoning the ghosts of those long thought buried: The specters of former Councilmember Jim Graham and former D.C. Chief Financial Officer Natwar Gandhi (as well as a finance official who actually died during this litigation but whose deposition was read during the two-week trial), all haunted the case. To most of local D.C., these figures are consigned to the mystic memories or vinegary grudges of a few old timers who still gather in the temple to keep up the old ceremonies.  

The Payne case also calls us, prophetically, to the sins of the here and now. David Tseng, whom Payne came to see as a central villain and who did not respond to City Paper’s request for comment, remains ensconced in his job as the top lawyer for the finance office, as do several other executives who drove Payne out of the District. (Finance office flack David Umansky, who had been all too eager to smear Payne when he was fired in 2009, didn’t respond to requests for comment.) Vincent Gray, who has spent the better part of a year claiming that the U.S. attorney’s unwillingness to prosecute him for a shadow mayoral campaign is the same thing as vindication, was another key figure in the trial. He takes his old Ward 7 D.C. Council seat next month and also declined comment for this story.

Finally, the Payne case points us to future revelations. The city seems intent on figuring out those noises it has been hearing in the Department of General Services attic: There is legitimate worry that city bureaucrats were punished for not taking care of political cronies, which means we may be destined for deja vu. 

“I don’t think we’re even trying now, to be honest with you,” says Patrick Burns, who leads the Taxpayers Against Fraud Education Fund, a nonprofit group funded by plaintiff’s lawyers that advocates for systemic overhauls of corporate and government whistleblower rules. “D.C. government is not trying to change its culture, but neither is any other agency, so why should they be different?”

***

Payne’s friends had warned him about coming to D.C. government when he was offered two separate jobs in 2004. “I was encouraged to really think long and hard about whether it was a good career move, given my federal background,” he recalls. “I was just told that local D.C. government was a different beast. But I dismissed it.”

One job offer was in the mayor’s office, the other in the city finance office. He took the finance job largely because, thanks to his consulting work, he’d had a belly full of mayor’s offices. “I wasn’t worried about mayoral politics there,” he says. “My presumption was, it would just be about the work.”

He rose rapidly in the ranks and saw, or thought he saw, that he was appreciated and respected. By 2005, he was asked to take over the Office of Contracts and Procurements. The office, even Payne’s enemies concede, was a shit show: It had chewed through five directors in less than three years, and was a constant source of negative audits, and, worst of all from the perspective of Natwar Gandhi,who did not respond to a request for comment, negative news stories.  

“As long as I addressed those issues,” Payne says of his marching orders, “I was golden.” 

Payne was happy in the job, proud of the work, and spent long hours getting things right. He felt he was making a difference: For the first time in years, the contracting office got clean audits and the scandals were gone.  

But then, in early 2006, the FBI came calling. Someone had hacked the city’s lottery and was printing off phony tickets. The FBI had run its high-tech traps and zeroed in on a suspect machine, but wanted to wait for the hackers to get comfortable before making any arrests. As the FBI had predicted, the scammers printed off a few tickets the first day they were monitored, a few more the day after, and so on. A raid, long deliberated and planned, was ready for launch in the spring of 2006.  

Payne came to work that morning expecting jubilation.  

“And everybody’s crestfallen,” he recalls. “The announcement is made, ‘The raid has failed.’” 

The suspect machine, which had been furiously printing tickets just the day before, had fallen silent. 

“We’ve got a system that’s compromised, and the machine that was used to print the fake tickets is probably at the bottom of the Potomac,” Payne says. “Someone had tipped them off. And that somebody had to have been in the finance office.”  

Gandhi called his top aides together to discuss the crisis. But to Payne’s surprise, fixing the problem in the lottery seemed a second-order concern. “We spent more time talking about how to keep this out of the papers, how to not report it to the multistate lottery regulators, than we did talking about the fraudulent tickets, how the leak occurred, and why we didn’t catch the culprit,” Payne says.  

There was one action that Gandhi was willing to take, beyond protecting his reputation, though, Payne says. Leonard Manning, the colorful east-of-the-river operator who had run the city’s lottery contract going back to the Marion Barry days, had to go.  

“Gandhi wanted the contract terminated immediately,” Payne recalls. “I told him that we couldn’t do it because we had to put it out for bid.” 

It may take an effort of memory to recall this, but there was a time when Natwar Gandhi was the closest thing the District government had ever come to an actual celebrity. He had helped pull D.C. from its deathbed: The finance office had finally balanced the city’s books and gotten it out from under Congressional control. Even better, yuppies were flocking to the District and the tax revenues were flowing in. Gandhi, who stepped down from the job in 2013, gleefully took the credit.  

Friends and colleagues called him “Dr. No,” and he relished the title. His best constituency was the local press corps. A well-chosen leak from “finance officials” could—and often did—scrap years of political horse-trading and could wreck the ambitions of the mightiest developer or best-intentioned nonprofit group. While Gandhi still occasionally remembered to affect false modesty (“I’m just a bean counter,” he often said at his council appearances), the fact was, you weren’t anyone in local politics until Gandhi had invited you to breakfast at the Old Ebbitt Grill.  

Payne didn’t understand the risks inherent in saying “no” to Gandhi because he was still relatively new to D.C. government. But Payne won the point: It was agreed that, since Manning’s lottery contract was going to expire the next year anyway, it would be put out for public bid. Payne was to be in charge of it.  

Payne admits that he can be rigid, a stickler for procedure. Even his friends say that he sometimes talks as if he were under oath. (We were fully four hours into one of our conversations for this story before he dropped his first F-bomb—and then he begged it to be kept off the record.)  

Many bureaucrats will tell you they believe in process. But Payne really, really means it.

Eric Payne Credit: Darrow Montgomery

***

One morning in 1976, Payne was watching TV in his family’s crowded, two-bedroom apartment in Rogers Park, an imperfectly gentrified neighborhood on Chicago’s far North Side that, to this day, is a disorienting blend of extreme urban wealth and extreme urban poverty.  

“The door, literally, was kicked in, and a stream of men with guns drawn come pouring in. They were shouting, ‘Freeze, nobody move,’” he says. “I remember screams, I remember crying. Just terror.”

The men, Brill Cream-flecked FBI agents and some of the less sentimental members of Chicago’s notoriously unsentimental police department, were looking for Eric’s dad. Winfred Payne had been in and out of jail since 1969, when he began robbing banks—ostensibly to help the Black Panther Party and its revolutions. By the time young Eric got his introduction to the forces of law and order, in 1976, Winfred Payne had been busting out of state and federal jails for nearly five years. This time, he’d bribed his way out of Cook County Jail. 

Eric Payne doesn’t have a youthful memory of his dad that isn’t filtered through the foggy plate glass or crusty phone lines of federal prison visiting rooms.  

“When I was young, people asked me about my mom and my dad and I would say my father worked in government,” Payne says. “He never apologized. In his mind, he did what he needed to do to support his family. He would frequently say that this was his way of sort of participating.” 

(Years later, the elder Payne was still slightly defensive about his career: “We’d say we were doing it for the right reasons, but really a lot of the money went to us,” he told an interviewer in 2004. “But a lot of it went to help the party and help people. …It helped black folk.”

Young Eric settled on a couple of things very early. First, he was going to be a lawyer; second, he was never going to jail.  

“Things have always been pretty black and white for me,” he says. “If you can’t find a white-collar job, then you get a blue-collar job. You do what we need to do to stay on the right side of the law.”

Payne was a gifted but indifferent studentwho bored easily. He skipped school, spending his days with friends on State Street. A mainspring snapped when he was about 14. 

“I got in trouble, got this suspension, and my mother jumped all over me about it,” Payne recalls. Linda Payne had often threatened to send Eric down to Arkansas, where his father’s family lived, and she renewed the threat. “I said to my mother in a fit of anger, ‘If you’re going to send me to Arkansas, do it.’ And the next day, I was on a bus.”

Little Rock was tough. It was a strange country, peopled by folk who’d never heard of house music. His grandmother, Dorothy Walker, was one of the heroes of the Civil Rights era and someone the folks of Little Rock knew was the woman to see when the landlord demanded the rent or your kids might not have toys for Christmas. But she was also a strict, Christian woman, and Winfred’s jailing weighed on her heavily. Eric lost count of the number of trips he had made to the backyard in those early months to pick out a switch for his grandmother’s ministrations.  

“I think for me it was like a bad dream,” he recalls. “It just was tough.” 

But there were a few bright spots. For one, he had his own room, in an actual house. Then there was church. There was school, where he was allowed to skip ahead until he found topics that could hold his interest. 

Finally, and most importantly, there was Tice. Robbie Latrice Martin was Winfred Payne’s baby sister. She was, in every sense, the life of the party. It was she who took young Eric aside after his sessions with Grandma’s switches, who gave him a place to crash on weekends, driving lessons on the long, barren roads between Arkansas and whatever federal prison his father was stewing in, and a malt shop for him and his new friends to come hang in, cheeseburgers on the house.  

About a year after young Eric had come to Little Rock, he and Tice made plans to go visit Winfred Payne in prison. As soon as Eric finished church on Sunday, she and Eric would head off to Oklahoma. As he and his grandparents were coming home from church, though, an unmarked police car pulled up.  

“I heard my grandmother screaming from the other room,” Payne recalls. 

Police had found Tice in a parking lot outside an apartment in West Little Rock. She had been shot several times. Authorities would later tell Tice’s family that she might have survived the shots. “But no one called the police or ambulance,” Payne says. “If someone had said something, she’d still be alive.” 

Tice’s death remains unsolved.  

***

Like so many people before him—and others who will come after—Payne didn’t plan to be a whistleblower; he had his lot cast for him.  

“I know I’ve got a client who’ll go the distance when I hear them say, ‘Well, I had to do something,’” says Colette Matzzie, a partner at Phillips & Cohen who successfully represented D.C. schools whistleblower Jeff Mills. “It’s usually a very eye-opening and disappointing experience that they go through. It dawns on them at some point that, no, not only are they being ignored and there’s no interest in fixing the problem, but they find themselves under increased scrutiny, demotion, ostracism and ultimately, for many, termination.” 

In the spring of 2006, Payne took the first steps toward a new lottery contract. Worried about the seemingly endless litigation surrounding other state lotteries, Payne created three layers of impartial review, marshalling technical experts from within and outside the government to evaluate every possible angle of incoming bids. His bosses, he says, stayed out of the way.  

But the next year, while the lottery bids were being considered, the air of the finance office turned poisonous. Federal officials raided the city’s tax office and frog-marched out mid-level bureaucrat Harriette Walters. “Mother Harriette,” as some colleagues knew her, had been shoveling gobs of money into a series of pathetically shabby front companies for decades. A full accounting of the theft doesn’t appear to have been done, but the feds and Walters eventually agreed that it was upwards of $50 million. It remains the District’s biggest public corruption scandal.  

It was one thing for the city to lose that kind of money so idiotically—this was, after all, D.C. It was another for it to happen in the very temple of Dr. No himself. Finance officials quickly learned what it meant to provoke the wrath of such a jealous god, Payne says. 

“Gandhi’s political stature was beginning to falter,” Payne recalls. “He was not as strong as he had been. He was a bit more—humbled’s not the right word—but he just knew he was in trouble.”

As longtime colleagues were falling in the ritual sacrifices that followed the Walters scandal, Payne heard an ominous prophecy from a friend in the finance office who’d been around D.C. for a while. “There’s no way,” she said, “that Leonard Manning is going to lose the lottery contract.”  

“I battened down the hatches,” Payne recalls, burying himself in his work and creating even more levels of review for the lottery bids. He was relieved by the end of 2007, when the blue-ribbon panels had done their work and—Payne thought—he could move on to other projects. The selection committees had chosen the bid of a Greek conglomerate and their local partner, a company that, Payne would only learn after the fact, was run by the wife of Warren Williams, one of then-Mayor Adrian Fenty’s favorite developers. 

In putting the bid forward, Payne had inadvertently stepped into a vicious battle between D.C.’s high priests: Then-D.C. Council Chairman Vince Gray was a longtime pal of Leonard Manning and would eventually run against—and defeat—Fenty for the mayor’s seat. Then-Councilmember Jim Graham sat on Metro’s board and was peeved that one of Williams’ companies had been given a fat development contract. Jack Evans, who chaired the finance committee and was Gandhi’s council rabbi, had his own problems with Williams and his own loyalties to Manning. Payne, though, wouldn’t learn any of this information until it was too late, and his lot had been cast. 

District law requires the D.C. Council to approve all public contracts worth more than $1 million. In December 2007, Payne forwarded the proposed new lottery contract to his bosses for review. There were “some administrative changes”—housekeeping formalities—but nothing substantive, Payne says. Gandhi’s office duly passed the contract off to the council in early 2008. 

And then, nothing. 

“I began firing flares, sending emails asking, ‘What’s going on with the lottery contract?’” Payne recalls. He also talked to his bosses, worried that “there’s some political horse-trading going on.”  

In February 2008, Payne got a call from David Tseng, the finance office general counsel who had clashed with Payne in the months before over whether Tseng had the authority to select and approve his department’s contracts, or whether that had to be done through Payne’s office. Now, though, Tseng wanted to talk about the lottery contract.  

“He calls and says we’re working to get the lottery contract approved via passive approval,” Payne recalls.  

Under D.C. law, the council has 10 days to review and approve contracts. If it doesn’t act, the contract automatically becomes law. Some government types had used passive approval to sneak through sweetheart deals, buried among dozens of mundane or even terminally boring resolutions or actions.  

Payne says he would have none of it. “What I was hearing from the general counsel was they were going to get this approved via the back door. I questioned whether it was legal, and the words he used were, ‘Eric, I’m the general counsel. We’ve looked at what the requirements are, and we can get this done.’” 

Payne remained firm, and Tseng relented. But Tseng and Gandhi demanded that Payne and another finance official appear before the council to defend the lottery contract in two separate public meetings in early April 2008, Payne says. Whenever finance officials had appeared before the council previously, the finance office had prepped them carefully, but Payne and his comrade were offered no prep.  “It felt like a setup,” he says.  

Before the hearing, Payne says he and other senior finance officials sat down with Evans. As Payne tells it, Evans said that “everybody hated” Williams and that it would be better to give the contract back to Leonard Manning and let him partner with the Greek conglomerate. In Payne’s view, it’s “improper at best” for an elected official to push a publicly solicited contract toward a more favored company. Even worse, though, Payne says, Gandhi himself parroted Evans’ line. 

Evans didn’t respond to requests for comment about this story.  

The council’s Committee of the Whole met April 9, and Payne says Evans and Graham grilled him the hardest but that he had already heard that then-Chairman Gray was adamant about protecting Leonard Manning’s contract. Graham, who lost reelection in 2014, is still fending off a civil suit alleging that he tried to get Williams to withdraw from his development deal at Metro in exchange for supporting the lottery contract. 

In a brief interview, Graham denied any wrongdoing. “Myself, Vince Gray, and Jack Evans had a vote on that contract. We were obligated to cast those votes. And that’s what we did.”  

Payne says he approached Gray after his grilling, hoping to learn what the council chairman was worried about. But Gray wasn’t interested in “fixing” the contract, Payne says. 

Gray declined comment for this story.  

***

On the same afternoon of that meeting, Payne says, he had one of his regularly scheduled meetings with his staff and boss. Underlings in the meeting mentioned, almost in passing, that they were worried about a contract that had been let by the finance office’s technology department. The contracting company was being paid to provide professional staffers to the tech office, but nobody had seen any of the staffers. Payne turned to his boss and asked whether they should alert the finance office’s integrity unit.  

In the wake of the Walters scandal (which was then still working its way through federal court), Gandhi’s loyalists had completely overhauled the finance office’s ethics manual. More than that, they had put every employee through days of training and had them each sign a disclosure admitting that they had been trained proper-like.  

“The rule was, if you see something, say something,” Payne says. “I just was stupid enough to believe that they meant it.”

It sounded to Payne that his staff were talking about a ghost-payrolling scandal in the technology department, and he thought it best to bring in the integrity investigators. His boss agreed, and a day later Payne called internal investigators to set up a meeting. The following week, though, the city’s lottery system—the one that Graham, Gray, and Evans were fighting to preserve—collapsed. It went offline and tickets could be neither bought nor sold. It took a while to sort out, which meant that Payne wasn’t ready to sit down with integrity office investigators until May 2008.  

By that time, he had more to talk about. Sometime in April, Payne got a phone call from a lawyer in private practice, who told Payne that he’d just been given advance copies of bid specifications for a legal procurement that Tseng’s office was about to announce. A scant few days later, an email came from a minority law firm the finance office favored. The email mentioned a public contract that the firm had won. It went on to mention that the minority firm was, in fact, only a front for the actual, intended beneficiary, and that the firm would be happy to act as a “pass through” for public dollars for the low price of $100,000 off the top.  

Payne was shocked. He sat down with integrity office investigators to report his findings and concerns. He returned from that meeting not sure what would happen but confident, at least, that he’d done his duty.  

But then Gandhi went to lunch with Graham, Payne says. When he returned, Gandhi ordered Tseng to request a criminal investigation of Eric Payne. Payne later learned that Graham had accused him of offering ghost-payrolling jobs to Graham’s political allies in exchange for his vote on the lottery contract. The allegation went nowhere: Investigators assured Payne within a few weeks that he had been cleared, but it convinced Payne that he had unwittingly made some powerful, determined enemies. Finance office investigators agreed and urged him to take his concerns about the lottery and other contracting “irregularities” to the city’s inspector general, even the FBI. The inspector general’s criminal division opened a probe into the ghost-payrolling and bid-rigging concerns on June 26, 2008, Payne says.  

***

Within five days, Payne was called into his boss’ office. He was told that he was no longer the director of contracting and procurement, that he would instead report to one of his former underlings. He was moved to an office across the building filled with storage boxes. He was cut out of senior meetings and no longer had any responsibilities—except, of course, to be “the public face of the lottery contract,” Payne says.  

For the next few months, whenever reporters had questions about the lottery contract, or the D.C. Council wanted to rage publicly against the finance office (until recently, a popular adjective at the Wilson Building was “Graham-standing”), Payne would be the one sent to pull the switch off the tree.  

In December 2008, the council, led by Graham and Gray, voted against the new lottery contract. Two weeks later, Payne was fired. 

At first, Payne was feeling confident that he’d be back on his feet. He had some consulting contracts ready to go, thanks to some old friends from the Clinton years, and the city’s then-attorney general had assured Payne that all would be well.  

“I sent a demand letter, and I expected that the case would settle quickly and I would just go on my merry way,” he says. “What became very obvious in the press stories was the narrative adopted by the finance office that Eric was a horrible supervisor, horrible employee, and we should have fired him a long time ago.”  

***

The demand letter went nowhere, the consulting gigs slowly dried up. Former friends seemed suddenly less eager to pick up their phones. It got harder to get out of bed. He gained more than 100 pounds. He and his wife were evicted from their Virginia home after the landlord—who admired Payne’s moxie and who was willing to cut the family a break—died suddenly and a distant nephew demanded back rent.  

Payne didn’t have a monopoly on the stress. His wife Brandy miscarried—twice. They were able to stay afloat, briefly, with family loans. By the spring of 2013, Payne’s friends were hosting a fundraiser just to keep the family from having their car repossessed. A job finally opened in 2014—in Saudi Arabia. Payne and his family spent nearly three years in the desert.  

Sadly, Payne’s case is not unique. In 2010, the New England Journal of Medicine studied the wellbeing of nearly two dozen whistleblowers in government healthcare fraud cases. Some reported marital problems, even divorce, as a consequence of their crusade, while a majority reported stress-related health problems, from psoriasis to shingles.  

Meanwhile, the District fought dagger-to-hilt against Payne’s lawsuit. City lawyers tried to subpoena Bill Clinton and ABC News host George Stephanopoulos, which made it even harder for Payne to find friends willing to pick up the phone. He lost more than once at Superior Court and only had his wrongful termination case reinstated at federal court after the judge reconsidered his decision. The District didn’t make a settlement offer until a week before the case went to trial.  

When Payne’s lawyers called Graham, Gray, and Evans to testify, the D.C. Council sent its own lawyers to assert parliamentary immunity. Payne wanted to get the officials on the stand—especially Graham, whom he believed had wronged him most—but his lawyers convinced him that even if Judge Friedman ruled in their favor on the immunity, it would give the District an issue to appeal.  

Payne has his verdict now, even if he’s uncertain that it will stand. He says he’s breathing easier than he has in years. For him, the important thing is that an impartial panel heard his story and believed he was right. No appeal can take that away.  

He’s also proud to have made it through the ordeal. “They tried their best to break me,” he says of the city. “They just couldn’t do it, that’s all.” 

Yet the ritual sacrifice from which he has just been spared seems certain to continue. Even his erstwhile fans acknowledge that.  

“I’m very pleased for Eric,” says Ward 3 Councilmember Mary Cheh. “He was put through hell, he was vilified, and it turned out that he was right all along. It’s very, very hard to bring these whistleblower suits—you have to have a lot of stamina, you have to have a lot courage. It’s unfortunate, but that’s how the system works.”

And that’s what makes Payne despair the most. Even if he gets all the money at stake now, he often asks himself, was it worth it?  

His answer: “No comment.”