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Over the years, Americans have learned various approaches to outfoxing legislative committees stacked with hostile inquisitors. First off is the Ollie North model, which entails strapping on a uniform, wrapping yourself in the flag, and looking like a puppy dog. On the other hand, if you don’t cut a sufficiently telegenic figure, you could try the approach favored by North’s Iran-Contra crony John Poindexter—just say you forgot everything.
Local D.C. added a sly variation last year. Invited by a livid D.C. Council to testify on the renovation of the Wilson Building, developer T. Conrad Monts simply blew off the meeting.
None of those folks, however, possessed the durable evasive acumen of Chief Financial Officer Valerie Holt. A 14-year veteran of the District bureaucracy, Holt doesn’t lie, diss, or duck out. She simply strings together non sequiturs, sentence fragments, tautologies, tangents, and afterthoughts designed to make her audience forget the question that brought them all on.
Holt’s gibberish filled three hours of air time Feb. 25 during a meeting of Ward 2 Councilmember Jack Evans’ Committee on Finance and Revenue, whose members wanted answers on the likely postponement of the March 15 deadline for completion of the city’s fiscal year 1999 audit. If the councilmembers appeared tired of the issue, it was because they’d visited it before: As first reported by the Washington City Paper (Loose Lips, “Playing the Numbers,” 1/28), Holt in late January whiffed on the original, congressionally mandated Feb. 1 deadline but pledged to deliver six weeks later. On Feb. 18, though, she failed to deliver key documents to the city’s private auditor, Mitchell & Titus LLP, and thereby threw off the timetable for the second deadline.
Asked by Ward 3 Councilmember Kathy Patterson what she was doing to prevent a similar debacle next year, Holt offered a response certain to foil even the most determined semiotician:
“First of all,” she said, “we think that our going-forward approach to the SOAR system1 needs to be really internally driven2—and by that, we need to make sure that we’re paying attention to how the District functions: how it interacts with its auditors, how its books roll up, and that that needs to be internally driven rather than externally driven.”3
As the eyes of her interlocutors grew wider, Holt slipped further into her linguistic cubicle and even alluded to something that she dubbed “iterations of analysis outside the system.”4
Her response concluded with this flourish: “We need to make the changes that we can to narrow the accounts5, and then we need to be prepared in the year 2000 to make some more changes—in 2001—to make some changes in the charter of accounts6 and to the accounting structure roll-up.”
We’ll get right on it, Val.
If Holt had only ditched the bullshit for three simple words—”I screwed up”—she might have ended up in a better spot. As it is, eight councilmembers on Tuesday asked the control board to sack Holt for various offenses outlined in a four-page letter each of them signed. If their fury were aimed at virtually any other D.C. government appointee—like, say, the public works director or the health director—their machinations might actually mean something. As it is, they can’t touch her.
The CFO remains a sui generis offspring of the 1995 legislation that created D.C.’s financial control board. Like every document handed down from Capitol Hill in that period, the legislation was written on the premise that the council could never be trusted on fiscal matters. Accordingly, the council was given no authority to confirm or remove the CFO. Those powers rest with the control board and its stubborn chair, Alice Rivlin.
If you were charged with overseeing the financial renaissance of the District—as Rivlin is—you’d want a loyal surrogate in the CFO’s chair. The CFO, after all, presides over every fiduciary activity—budgeting, tax collection, project finance, and so on—that shows up on the city’s bottom line. Former CFO and current Mayor Anthony A. Williams taught Rivlin’s predecessor, Andrew Brimmer, what a pain in the ass it is to have an independent thinker managing the books.
Holt’s fealty to Rivlin stretches back to 1990, when the D.C. bureaucrat worked on the staff of the Rivlin Commission, which produced a prophetic report on the District’s impending fiscal disaster. Their cozy professional relationship peaked last year, when Rivlin persuaded Williams to nominate Holt as CFO.
Holt’s nomination was controversial from the beginning. Though Rivlin trusted her as a loyal staffer, locals who’ve been around city politics longer than, say, five years remember her complicity in the fiscal recklessness of the Sharon Pratt Kelly administration. As the District’s controller, Holt, for example, projected a modest deficit of $57 million for fiscal year 1994; the actual figure turned out to be $335 million. Hello, Mr. Brimmer—and a newly created control board.
Rivlin is still sticking by Holt. In January, she tried to force Evans to cancel a hearing to interrogate Holt on the audit postponement, on the rationale that a public airing of the matter would interfere with the ongoing effort to straighten out the books. Evans said no.
For a city now struggling with proposals to appoint members of its elected school board, the irony here is delicious. According to the unwritten political theory favoring appointed officials, Rivlin is insulated from the sinister political forces that account for bad decisions. She’s not elected, so she doesn’t have to answer to special interests. She doesn’t have to campaign, so she can spend more time scouring financial documents. And secrecy is in her job description, so she can feel good about snubbing the press and shutting the public out of her meetings.
Yet even in her politics-free bunker at One Thomas Circle, Rivlin falls prey to the same compulsion that has gripped politicos from Huey “Kingfish” Long to Mayor-for-Life Marion S. Barry Jr.: cronyism.
Rivlin, the appointed guarantor of D.C.’s solvency, is using the power of her office to protect a friend. Meanwhile, the council, that accountability-free zone of fiscal slackerdom, is hauling the culpable parties before the public—twice in three weeks—and asking tough, pointed questions. If the council can pull off that sort of role reversal, what’s to stop Wilma Harvey, Westy Byrd, Dwight Singleton, and their colleagues on the elected school board?
OK, LL won’t think too much about that one.
Although the resurgent council may not have the statutory power to dislodge Holt, it is doing the next best thing: namely, putting her dodges into the public record. And it’s a voluminous record, at that. Last spring, councilmembers grilled nominee Holt about how she could have served in top financial positions throughout the ’90s and still managed to avoid responsibility for record-shattering deficits. In a brilliant display of jargoneering and triangulation, Holt slithered by. “She was very, very good,” said Ward 6 Councilmember Sharon Ambrose after last spring’s hearing.
Nowadays, Ambrose isn’t quite so complimentary. “I’m hearing the same CPA-speak, which I don’t, frankly, understand. I don’t need to know what IT accounts are….I don’t understand bank reconciliations, and I don’t understand suspense accounts.”
Ambrose and seven colleagues provide an example of clearer language in their letter demanding Holt’s ouster, which reads: “Her failure to act on what she acknowledges as sound financial practice is a dereliction of duty with substantial negative consequences for the District of Columbia.”
In the control board’s worldview, every municipal problem can be cured with the proper consulting contract. When the city’s financial management system had all but collapsed by the mid-’90s, the board gave KPMG Peat Marwick a $21 million contract to install SOAR, which was billed as a 21st-century panacea to the city’s archaic accounting methods.
Two-and-a-half years later, the system doesn’t work right and has lived up to its billing only in the literal sense—by requiring $11 million in upgrades.
The solution? What else? The board on Tuesday issued a request for proposals for a consulting contract to examine all the problems associated with SOAR dating back to the very day in September 1997 that the board announced the award.The document calls for an “independent assessment of the financial system plus recommendations to ensure its ‘successful implementation.’”
As it prepares to choose a contractor, the board had better procure a new filing cabinet for SOAR assessments. The General Accounting Office and the D.C. inspector general’s office have both completed studies of SOAR—a collection that the council has supplemented in its recent hearings on the delayed audit.
Then again, the plan might help the city diversify its stable of financial consultants, dominated in recent years by KPMG. “I think KPMG would be disqualified from this one,” says Evans.
* Mayor Williams didn’t want the public to think he was raiding the city treasury for the $19,000 to fund his citywide telephonic apology for poor snow removal and trash pickup. So his aides came up with a clever alibi: The money, they said, would come from the $20,000 fine assessed to Waste Management of Greater Washington for its failure to collect recyclables in the aftermath of the January snow and ice storms.
It appears that the Williams folks have yet to clear their shelves of that dusty volume, Marion Barry’s Encyclopedia of Financial Gimmickry. For one thing, the fine doesn’t work like a parking ticket. Any fines assessed to Waste Management are simply deducted from the amount the city pays to the company over time; so the general fund won’t expand anytime soon on the strength of a check from the company. “That’s just the way it’s done,” says Jim Stone, a Waste Management spokesperson.
And as any seasoned bureaucrat will tell you, collecting a corporate fine isn’t as simple as gathering a few bottles from the curbside. According to Stone, Waste Management is appealing the fine because the contract allows for one-week pickup lags during inclement periods. “We actually performed over and above the contract,” says Stone. Williams’ recorded apology left out that piece of good news.
* D.C. fundraiser extraordinaire Kerry Pearson has given up seeking special considerations from the mayor’s office. Last year, Pearson was seeking VIP tags for his mother with the big-time number “12” to commemorate Mrs. Pearson’s having reared a dozen children. In his quest for the special tags, Pearson prevailed upon Evans and at least three other councilmembers for whom he has raised funds to petition the mayor on his behalf.
The entreaties went nowhere, even though Evans contacted mayoral aides Henry Sumner “Sandy” McCall and Max Brown for the guy who raised $900,000 during Evans’ 1998 mayoral run.
Clean-government advocates might be tempted to celebrate Pearson’s rejection as a sign that money can’t buy status in the new D.C. Pearson, however, suggests that the story says more about management practices than ethical standards. “The mayor personally told me that he wanted me to have it, but he was unaware of it in a timely fashion,” says Pearson, who professes to have “no interest” in renewing his request. CP
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