Fired, but Firing Back Over Dealings in Washington

But this is not a typical hard-luck story of setback amid a recession.

Since he was fired almost four years ago, Mr. Payne, 41, has been locked in a bitter dispute with the city’s chief financial officer, Natwar M. Gandhi, his former boss and one of the most powerful unelected officials in Washington. Mr. Payne asserted in a lawsuit filed in 2010 that he was fired for drawing attention to misconduct in city contracting; Mr. Gandhi has countered by calling him a disgruntled employee.

At least one federal criminal investigation has sprung directly from concerns that Mr. Payne says he raised when he was a contracting officer and included in a lawsuit over his dismissal. The Securities and Exchange Commission is investigating Mr. Gandhi’s office as well.

The legal feud has taken an unusually personal tone. In a second lawsuit, Mr. Payne accused Mr. Gandhi of defaming him in public statements and in private e-mail circulated to business leaders, preventing him from finding new work.

“The uncomfortable questions I’ve raised have made it difficult for district officials to continue those practices,” Mr. Payne said. “This feels like a measure of retribution.”

Mr. Payne was fired, he has said, for resisting efforts by city officials, including Mayor Vincent C. Gray and at least one City Council member, to scrap a $38 million lottery contract with the winning bidder. The fight has played out in the footlights of another scandal: an inquiry into Mr. Gray’s 2010 election, which has been tainted by revelations that a wealthy supporter bankrolled an off-the-books “shadow campaign.” In unrelated scandals, two City Council members resigned this year after one pleaded guilty to bank fraud and the other to theft.

Mr. Payne has been something of a voice in the wilderness as intrigue has swirled around the mayor and the Council. But his accusations about misconduct in the lottery contracting process have gained attention recently as new controversies have emerged over Mr. Gandhi’s stewardship of his office.

In October, his internal affairs chief, William J. DiVello, abruptly stepped down over what he said was pressure to shield internal audits from public view. The S.E.C. is investigating. Mr. Gandhi’s office denies that such a policy exists.

In early December, Mr. Gandhi faced blunt questions at a tense City Council committee hearing that touched on his dispute with Mr. Payne.

A former council member, William P. Lightfoot, called Mr. Payne’s account “a story about villains and a hero.”

“I think Mr. Payne spoke truth to power, and power decided they were going to crush him,” he said. “It’s just that simple.”

Council members who sought a public airing of the circumstances around Mr. Payne’s firing left disappointed. Mr. Gandhi sat silently as his lawyer told frustrated council members he could not discuss the case because of the litigation.

Jack Evans, a council member and chairman of the finance committee, said: “Someone is going to explain to this committee what happened. We can do it today, we can do it next week, we can do it next month, but at some point, someone is going to explain.”

A spokesman for Mr. Gandhi declined an interview request.

Mr. Gandhi is considered the guardian of Washington’s treasury, a position created during the city’s near-insolvency in the 1990s. But his credibility was damaged several years ago after Harriette M. Walters, a manager in the city tax office, pleaded guilty to stealing $48 million, raising questions about oversight in his office.

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