Thursday, October 22, 2009

D.C. Auditor Deborah K. Nichols has asked a Superior Court judge to hold Mayor Adrian M. Fenty in contempt for refusing to comply with a court order for documents detailing real estate deals conducted by a pair of defunct city-run development corporations.

The dispute has led Ms. Nichols to seek outside legal counsel at public expense to enforce what she argues in court papers is her lawful authority to audit such transactions. An Oct. 6 court order by Superior Court Senior Judge Eugene N. Hamilton agreed with Ms. Nichols and granted the auditor “unrestricted access” to the documents.

D.C. Attorney General Peter J. Nickles, who defends city agencies against lawsuits, last week asked both Judge Hamilton and the D.C. Court of Appeals to delay enforcement of the order until he could file for an appeal.

In the meantime, the dispute has drawn in another independent government agency.

On Monday, the same day that Ms. Nichols filed her contempt-of-court motion, the city’s chief financial officer, Natwar M. Gandhi, refused the auditor’s staff access to financial records related to the corporations.

“Please be advised that the CFO will defer release of the documents pending outcome of the litigation,” Mr. Gandhi wrote to Ms. Nichols.

The refusal by the Fenty administration to comply with Ms. Nichols’ subpoena has drawn fire from D.C. Council members.

“I don’t understand the fear of transparency that comes out of the mayor’s office,” said Phil Mendelson, at-large Democrat. “It defeats the purpose of having an auditor if [she] can’t examine the government’s transactions. This is like adults fighting on a playground.”

Arguing that D.C. law and the federal Home Rule Act call for her to conduct audits of major real estate development deals, Ms. Nichols has been seeking for nearly a year to review records of property transfers to the District from the Anacostia Waterfront Corp. (AWC) and the National Capital Revitalization Corp. (NCRC), a pair of dissolved entities that had been established to eliminate blight through redevelopment.

The proposed audit hit a roadblock when Ms. Nichols and Mr. Fenty’s deputy mayor for planning and economic development, Valerie Santos, clashed over procedures for reviewing the documents.

On May 28, Ms. Nichols issued a subpoena for the records, but Mr. Nickles objected to it as too “burdensome.” On Aug. 31, Ms. Nichols filed an application in Superior Court to force the Fenty administration to comply with her subpoena.

Armed with Judge Hamilton’s Oct. 6 order, Ms. Nichols’ staff was nevertheless turned away when they attempted to review the documents on Oct. 14 - a day before the Court of Appeals agreed to delay Judge Hamilton’s order.

The judge will hear arguments Friday regarding Ms. Nichols’ contempt motion, and the request by Mr. Nickles to delay enforcement of the order.

Mr. Nickles on Wednesday said that Ms. Nichols is attempting to overstep her authority, and that the mayor’s legal privileges call for a more deliberate approach to releasing what he contends are “more than 1,000 boxes of documents.”

Mr. Nickles said that he would allow Ms. Nichols to review and label the documents she wishes to copy, and that his office would respond within 48 hours with the documents and a list of privileges his office would assert in withholding any documents.

“And to go the extra, extra, extra mile, to not be secretive or manipulative,” he added, his office would agree to let any privilege disputes be resolved by the lawyer for the D.C. Council, which approved Ms. Nichols’ appointment. Yet Mr. Nickles also vowed to appeal if the judge rules in favor of unrestricted access.

Thus far, the dispute has cost the city $75,000 in outside legal fees, according to D.C. officials.

On Tuesday, Mr. Gandhi’s decision to delay releasing the documents prompted council member Kwame Brown, at-large Democrat, to criticize the move as an attempt “to thwart” Ms. Nichols’ efforts. Mr. Mendelson said that he was “surprised” by the move. “I don’t agree with it,” he added.

Mr. Gandhi was unavailable for comment. “Our lawyers have reviewed the request and think that this is the prudent course of action,” said his spokesman, David J. Umansky.

“It’s surprising,” the council’s lawyer, Brian K. Flowers, said of the chief financial officer’s decision. “This is financial information that is supposed to be made available on request, without a Freedom of Information Act request. It should be available online.”

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