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All Muck Is Local: D.C. Data Disposal
It was still dark last Wednesday morning when the cleaning crews pulled into the alley behind a Washington, D.C., mall, but not so dark that they didn’t notice some unusual items left for them to pick up with the rest of the trash. The two 3-foot-high servers were clearly labeled “PROPERTY OF D.C. OFFICE OF TAX AND REVENUE.”
Now, who puts a server out on the street? More to the point, who would dump servers belonging to an agency that’s in the midst of a federal investigation of what’s described as the biggest corruption scandal in the city’s history? (See our artful rendering of what it might have looked like above.)
The garbage collectors notified Melvin Barnes, the building maintenance man.
“At first, I was thinking, ‘Man, who's putting this stuff here?’” said Barnes. “But when I saw the labels of the tax office, with all this stuff going on, I was like, ‘Uh oh.’”
“All this stuff”—the alleged embezzlement of at least $20 million in a money-laundering scheme and its investigation— has been front-page news in Washington for months. Two employees of the city tax office are among the ten people who’ve been arrested in connection with the scandal.
The former supervisor of the tax office, Harriette Walters, has been charged with approving hundreds of fraudulent property tax refund checks made out to to phony companies and handing them over to a group of her relatives and friends. She allegedly instructed her co-conspirators to cash the checks at a Baltimore branch of Bank of America, where Walter Jones, the former assistant bank manager of the branch, would accept them. In one month alone, three bogus checks totaling $1.1 million were cashed through Bank of America. Jones was arrested last December.
Walters’s niece, Jayrece Turnbull, who’s charged as one of the principal conspirators in the case, maintained several accounts at Bank of America in the name of companies that were either non-existent or didn’t own property in D.C. Federal prosecutors say Turnbull used these as fronts to launder the money generated by the illegal checks.
The Washington Post analyzed records and found $44.3 million in 160 suspicious property tax refund checks issued by the city since 1999. For at least 10 years, the scam proceeded unimpeded.
On Wednesday morning, Barnes consulted with the Tivoli Square property manager, Mary Ellen Bayer. They called the office of Chief Financial Officer Natwar M. Gandhi, whose agency oversees the tax office, as well as the Police Department.
“When I remembered the scandal that happened in that office, I thought giving it back to the tax office wasn't necessarily the right thing to do,” said Bayer on Thursday. “There was no way this was the standard procedure to get rid of D.C. government computers. It appeared someone was trying to get rid of information.”
Police officers picked up the servers and delivered them to the city technological office.
But after inquiries from The Washington Post, the police retrieved the computers from the city. By late Thursday they were in F.B.I. custody. The agency will examine them for data that may be used as evidence of corruption in the D.C. Office of Tax and Revenue.
According to Barnes, he received calls on Thursday from the tax office and the office of the Chief Financial Officer. Both were looking for the servers and asking that they be returned.
“I told them,” said Barnes, “‘You'll have to call the police. They have them now.’”
Josh
Zachary
Wowzer! $44 million is a pretty big haul for municipal crooks.
Speaking of crooks, George Will wrote about Rep Don Young and the Coconut Road earmark scandal in his Washington Post column today and he seems to have gotten the facts right. Maybe he's been reading the TPM Muckraker?
BTW, when I try to access Don Young posts through "All Topics", I keep getting sent back to the TPM MR front page.
February 10, 2008 12:08 PM | Reply | Permalink
If only the FBI would get involved in the Billion dollar scams a few blocks away.
February 10, 2008 12:58 PM | Reply | Permalink
Check the DC webcams along the route between [a] Tivoli Square where the servers were found near the trash, and [b] the government offices where there servers were originally located.
February 10, 2008 2:12 PM | Reply | Permalink
It appears the servers were dumped not at a planned dumping site, but a site which the crew thought nobody would detect. It appears the crew was told to remove the servers, but was not provided guidance on how to destroy the evidence, or ensure the evidence was unavailable. This suggests there was more of an internal concern with removing physical evidence by a date-certain, rather than planning destruction of that evidence.
The DC Webcams do not appear sufficiently saturated along the most likely routes to provide photographic evidence of the server transfer or dumping. It remains to be seen whether the Tivoli-area security cameras provide anything useful. However, if the crew rented a truck, then the credit card receipts of the gas station would show a refil. Yet, a crew quickly moving would most likely not bother will refilling gas.
Perhaps there could be an alert sent to the people living along particular routes, asking them if they observed a specific/likely truck before sunrise. Here are some links to the possible routes from the DC Tax office and the site where the servers were dumped.
However, not all computer servers are necessarily located on site. We don't know yet whether these were all the servers; or whether only servers from one location were dumped, and they didn't get the backup servers; or wehther there are or are not backup servers at an unknown location. These links below may incorrectly assume that the servers were located at the DC Tax Office; perhaps they were located at another location, not at the address listed below.
If all the servers are missing at both the original site and the backup locations, then someone wold have had to talk to the IT area to ensure the records were removed from all the servers. They would have had to talk to someone inside IT to know which servers to remove; which backup servers to also remove; and which servers they didn't need to touch. We don't yet know what percentage of the servers are missing.
Tivoli Square is located here; the DC Tax office is located here. That route is here.
Let's consider the possible background of someone who would load servers to a vehicle, but not place them in a dumpster; and not have enough money to dispose of them. Would it be reasonable to preseume that they didn't have their own truck, and rented the truck? Let's assume someone rented a Uhaul truck from one of these locations. The Uhaul locations near the start/end points are here.
- Which webcams along all the routes between the Uhaul, start/end points, might offer some ideas of who traveled along this route to dump the servers?
Note also that one of the addresses is near the columbia Heights Metro station.
- Do any of the Metroline webcams have a nice view of the DC Tax Office along this route?
The above links and comments do not consider the following:
- Someone outside the organization may have been hired to remove/transport the servers, and that group had their own vehicles, and didn ot rent any equipment from a vendor.
- They may have taken an indirect route. Someone who was dumping something at a mall would want to get the equipment out quickly and is not likely to have planned a longer route than necessary. They may have loaded the servers, and drove until they found a place that appeared to be a place nowoby would look. This suggests they didn't monitor the dumping site prior to dumping.
- There may have been a transfer between vehicles between the start and end points. This would increase the number of vehicles and crews involved, and require more planning.
- There were other servers also removed, and dumped at other locations. check with the IT department to find out how many servers are missing, but have not been yet reported missing; reasons for the delay; and why the Tax office did not report the servers as missing.
- The DC Tax office may have had an independent contractor to do "routine" moving, and the truck driver/crew never knew what was inside the truck. Look for a financial person who could point to contracts providing this transfer capability.
- There were three crews: Upload, transfer, and download; and they never saw the entire route; or were not told all the information. This would suggest there were more people involved, complicating the assumed speed required to move the evidence.
February 10, 2008 3:20 PM | Reply | Permalink
It appears the servers were dumped not at a planned dumping site, but a site which the crew thought nobody would detect. It appears the crew was told to remove the servers, but was not provided guidance on how to destroy the evidence, or ensure the evidence was unavailable. This suggests there was more of an internal concern with removing physical evidence by a date-certain, rather than planning destruction of that evidence.
The DC Webcams do not appear sufficiently saturated along the most likely routes to provide photographic evidence of the server transfer or dumping. It remains to be seen whether the Tivoli-area security cameras provide anything useful. However, if the crew rented a truck, then the credit card receipts of the gas station would show a refil. Yet, a crew quickly moving would most likely not bother will refilling gas.
Perhaps there could be an alert sent to the people living along particular routes, asking them if they observed a specific/likely truck before sunrise. Here are some links to the possible routes from the DC Tax office and the site where the servers were dumped.
However, not all computer servers are necessarily located on site. We don't know yet whether these were all the servers; or whether only servers from one location were dumped, and they didn't get the backup servers; or wehther there are or are not backup servers at an unknown location. These links below may incorrectly assume that the servers were located at the DC Tax Office; perhaps they were located at another location, not at the address listed below.
If all the servers are missing at both the original site and the backup locations, then someone wold have had to talk to the IT area to ensure the records were removed from all the servers. They would have had to talk to someone inside IT to know which servers to remove; which backup servers to also remove; and which servers they didn't need to touch. We don't yet know what percentage of the servers are missing.
Tivoli Square [snipurl.com/1zeaa ] is located here [ http://snipurl.com/1zeab ] ; the DC Tax office is located here [snipurl.com/1zead ] . That route is here [ http://snipurl.com/1zead ].
Let's consider the possible background of someone who would load servers to a vehicle, but not place them in a dumpster; and not have enough money to dispose of them. Would it be reasonable to preseume that they didn't have their own truck, and rented the truck? Let's assume someone rented a Uhaul truck from one of these locations [ snipurl.com/1zeab ]. The Uhaul locations near the start/end points are here [ snipurl.com/1zeah ].
- Which webcams along all the routes between the Uhaul, start/end points, might offer some ideas of who traveled along this route to dump the servers?
Note also that one of the addresses is near the columbia Heights Metro station [ snipurl.com/1zeai ].
- Do any of the Metroline webcams have a nice view of the DC Tax Office along this route [ snipurl.com/1zeaj ] ?
The above links and comments do not consider the following:
- Someone outside the organization may have been hired to remove/transport the servers, and that group had their own vehicles, and didn ot rent any equipment from a vendor.
- They may have taken an indirect route. Someone who was dumping something at a mall would want to get the equipment out quickly and is not likely to have planned a longer route than necessary. They may have loaded the servers, and drove until they found a place that appeared to be a place nowoby would look. This suggests they didn't monitor the dumping site prior to dumping.
- There may have been a transfer between vehicles between the start and end points. This would increase the number of vehicles and crews involved, and require more planning.
- There were other servers also removed, and dumped at other locations. check with the IT department to find out how many servers are missing, but have not been yet reported missing; reasons for the delay; and why the Tax office did not report the servers as missing.
- The DC Tax office may have had an independent contractor to do "routine" moving, and the truck driver/crew never knew what was inside the truck. Look for a financial person who could point to contracts providing this transfer capability.
- There were three crews: Upload, transfer, and download; and they never saw the entire route; or were not told all the information. This would suggest there were more people involved, complicating the assumed speed required to move the evidence.
February 10, 2008 3:26 PM | Reply | Permalink
Extraordinary. For such a seemingly clever plan, that was a pretty stupid way to get rid of evidence. How about just taking the servers to the dump themselves?
Was the person given the task of disposing of the servers performing his or her version of whistleblowing?
And I have a question I hope someone can answer: When (and I certainly hope it's when) the malefactors in this scandal are given a guilty verdict, does everything they've used their ill-gotten gains for get sold and DC get reimbursed as completely as possible?
I ask this because, since the FBI is involved (for the federal aspects of the crime), I'm hoping that in the next Administration with a cleaned-up DoJ, Justice will go after all of the Iraq contractors (corporations and individuals) who've stolen from the public, then all of the political appointees of Federal agencies who have felt free to take public money through whatever means (no-bid contracts, sweetheart deals--such as all the student loans the Department of Education let go through without oversight--and on and on), and all who benefited from avarice or incompetence will have to give back any and all money (or property bought with it) to the government entity that got it from taxpayers in the first place.
Fines will not be enough. A percentage settlement will not be enough.
There will be little or no incentive to give those who are working on their own schemes to defraud the American people pause, and perhaps really stop them from proceeding, unless the financial (and punitive) consequences are severe and comprehensive. No deals, no reduced sentences unless they expose everyone else involved, no white-collar prisons, and no compromises on restitution will do, I believe.
So please let me know what the penalties from the DC thievery can be and if they can serve as precedents for all those future arrests and trials I look forward to seeing happen after January 20, 2009.
February 10, 2008 3:29 PM | Reply | Permalink
Here are the still images from Flickr along the most direct route from the tax office to the dump site: [ snipurl.com/1zeon ]. Maybe someone with a cell/camera phone have some images they may wish to add to Flickr related to this specific "dumping issue":
- Pictures of the dump site;
- Images alone the route;
- Images of the Tax Office.
February 10, 2008 6:41 PM | Reply | Permalink
The other angle of course is getting rid of all of those records that entitled many a Congressman and Senator to take the "DC Homestead Tax Deduction" when they really weren't entitled to it.
And then bully the DC bureaucracy into covering it up.
You know what I'm talking about, Senator Stevens.
February 10, 2008 11:12 PM | Reply | Permalink
The other angle of course is getting rid of all of those records that entitled many a Congressman and Senator to take the "DC Homestead Tax Deduction" when they really weren't entitled to it.
And then bully the DC bureaucracy into covering it up.
You know what I'm talking about, Senator Stevens.
February 10, 2008 11:12 PM | Reply | Permalink
C92,
OT but I googled Susan Arceneaux out of curiousity and I think I may have found an accounting irregularity involving Swift Boat Vets.
Arceneaux, as you know, is or very recently was partners in Political Compliance Services with Christopher J. Ward. Ward is the former NRCC treasurer who is under investigation by the FBI.
Arceneaux and PCS handle the accounting for Swift Boat Vets which is a 527 for tax purposes. Arceneaux also handles the books for the Admiral Roy F. Hoffmann Foundation. In fact, the foundation's address is the same as PCS's.
Roy Hoffman is a co-founder of Swift Boats.
According to the Swift Boat Vets 8872 filed with the IRS for the first quarter of 2006, Swift Boat Vets contributed $100,000 to the Admiral Hoffman Foundation on 2/8/06.
But, according to the 2006 990 filed with the IRS by the foundation, the foundation either never received or never recorded the $100,000 contribution from Swift Boat Vets.
The foundation did record a $10,000 contribution from Swift Boat Vets in 2005.
Where did the $100,000 disappear to?
February 11, 2008 12:28 AM | Reply | Permalink
Mrs. P:
As you know, the GOP has used nonprofits to launder money in previous cycles. I think you have an interesting lead there. $100,000 is not an insiginificant amount in an election - in fact, that's the going rate to become a Bush Pioneer.
February 11, 2008 9:55 AM | Reply | Permalink
C92,
The discrepancy could be a bookkeeping error but I think that is unlikely. In 2006, the Admiral Roy F. Hoffmann Foundation 990 listed only three contributions: $1 million from Boone Pickens, $171k from John O'Neill and $5k from Weymouth Symmes. These contributions account for all but $400 in contributions for 2006.
No matter where the $100k ended up, it demonstrates that Susan Arceneaux is, at best, a sloppy bookeeper. At worst, she and Political Compliance Services are laundering money for clients.
The issue is black and white as far as actual accounting for the missing $100k contribution.
Check the IRS website for the Swift Boat Vets 3/31/06 8872 (I hope this link works.)
The 2006 Admiral Roy F. Hoffmann Foundation 990 is on file at the Foundation Center's 990 Finder. Enter "admiral roy" to search.
February 11, 2008 10:29 AM | Reply | Permalink
I have no doubt there is all sorts of sleaziness connected with SBVT and Hoffmann's attempt at rehabilitating his shameful image.
However, the treasurer of the foundation evidently said this about the $100K transaction:
"SBVFT made two donations to the Admiral Roy F. Hoffmann Foundation. A $10,000 donation was made, as was a $100,000 donation, which was later reimbursed back to SBVFT by the Foundation. In the interim the Foundation used the money for payments to soldiers and Marines who had suffered grievous wounds during the fighting in Iraq and Afghanistan."
http://www.democracy-project.com/archives/002664.html
It should show up somewhere in their bookwork, though perhaps not in the Form 990.
Another great SBVT "investment": they donated $100K to the so-called "Vietnam Veterans' Legacy Foundation" just in time for them to launch a bogus lawsuit against John Kerry. That donation should appear on the SBVT reports.
February 18, 2008 3:46 AM | Reply | Permalink
I have no doubt there is all sorts of sleaziness connected with SBVT and Hoffmann's attempt at rehabilitating his shameful image.
However, the treasurer of the foundation evidently said this about the $100K transaction:
"SBVFT made two donations to the Admiral Roy F. Hoffmann Foundation. A $10,000 donation was made, as was a $100,000 donation, which was later reimbursed back to SBVFT by the Foundation. In the interim the Foundation used the money for payments to soldiers and Marines who had suffered grievous wounds during the fighting in Iraq and Afghanistan."
http://www.democracy-project.com/archives/002664.html
It should show up somewhere in their bookwork, though perhaps not in the Form 990.
Another great SBVT "investment": they donated $100K to the so-called "Vietnam Veterans' Legacy Foundation" just in time for them to launch a bogus lawsuit against John Kerry. That donation should appear on the SBVT reports.
February 18, 2008 3:44 AM | Reply | Permalink