By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
Dowd also organized the documents for Congress to explain Symington's failure to get an appraisal for the project that was the largest investment in Southwest's 32-year history. In order to evaluate the investment in the Esplanade, Symington and the other members of the Southwest board relied upon a four-page "letter of opinion" from real estate appraisers, Burke, Hansen and Homan Inc.
In a deal this large, a four-page letter of opinion is such a thin document that it is the accounting equivalent of anorexia.
The federal memorandum that covered Symington's deal called for a full-blown narrative appraisal.
The four-page document executed for Symington was no such thing. Indeed, the appraiser who signed his name to the report acknowledged the truth in the paragraph above his signature: "This is a preliminary opinion of value. A narrative report containing all the data and analyses will be prepared upon your request." Symington and Southwest never requested an appraisal.
Understand that the federal guidelines that describe what an appraisal ought to entail contain more pages than the Esplanade letter of opinion.
In fact, at the end of 1985, when Southwest could no longer fund the Esplanade and Symington was forced into the private sector for continued financing, he had to produce an actual appraisal. It ran to nearly 260 pages.
And yet Symington and Dowd were intransigent in front of Congress, insisting that, "The July 1983 preliminary appraisal complied with FHLBB regulations, [and] was given to the FHLBB by Southwest in January 1984 . . ."
Only a congressman could swallow such nonsense. Attorneys at the RTC had made the absence of an appraisal and the failure to get prior written approval from regulators the basis of their lawsuit. The effort by our governor to cover his tracks by having the federal regulators approve, after the fact, the Esplanade adventure stumbled when the San Francisco office of the FHLBB requested a copy of the appraisal on December 21, 1983. Three weeks later, on January 9, Southwest's CEO, Don Lewis, responded to the federal regulators' demand by forwarding the four-page document from Burke, Hansen and Homan. Lewis did not even bother to try to characterize his anemic numbers sketch as an appraisal. He was honest enough to admit that it was merely "a preliminary opinion of value."
Lewis' explanation is astounding.
"To save money," wrote the CEO of Southwest to the regulators, "this preliminary opinion was not finalized but can be if it would better serve your needs."
In other words, when Southwest and Symington were using depositors' savings, insured by taxpayers, to strike out on the largest investment in the S&L's history, an investment the RTC now describes as the largest single loss in the institution's nearly $1 billion collapse, Symington and his colleagues didn't bother to get a comprehensive appraisal, opting instead to microwave some numbers in order "to save money."
After the San Francisco regulators requested a copy of the Esplanade appraisal, Symington finessed the problem of belated approval by resigning from the board of Southwest. In their appearance before Congress, Symington and Dowd gambled that defiance would overcome any questions on the governor's business dealings.
And it worked.
The Washington, D.C., politicians were ignorant, absent or partisan. Under the headline, "Symington enjoyed gentle treatment from House panel," Kim Kelliher of the Arizona Daily Star analyzed the governor's Congressional appearance on February 20.
Describing the uninformed questions of the subcommittee chair, Representative Carroll Hubbard, Democrat from Kentucky, Kelliher wrote, ". . . the 18-year veteran of Congress admitted later that he had not studied the lawsuit or read the complaint."
The other representatives on the committee, all Republican, were described lobbing softballs to the governor.
"For instance," wrote Kelliher, "Representative Frank Riggs, a freshman Republican from California, began his dialogue by asking the governor to expound upon his years as a 'successful real estate developer.'"
Headlines throughout Arizona declared Symington the victor over Congress: "Symington takes on Capitol Hill," "Self-dealing charges against governor put to rest at hearing," "Symington alleges panel chairman biased," "Symington defends role with S&L, berates RTC."
Reporters were now covering the Southwest story as if the Congressional probe was a conspiracy of Democrats to embarrass the Republican Symington. In all honesty, much of the press coverage of Symington and Southwest has been on a par with Congressional questioning.
When the damaging RTC memo was leaked to the Washington Post, local papers did syndicate the bombshell story. But the Arizona Republic also turned over to the governor its Sunday opinion section, Perspective, so that Symington could write a lengthy reply characterized by its misleading irrelevance to the regulators' criticism.
Little wonder, then, that several months afterward, when Dowd went after the head of reporter Mary Jo Pitzl, the lawyer was quick to kiss the ring of Republic editors who have been cited nationally for their fawning coverage of the governor: ". . . Fife Symington believes he has always been treated fairly by the editorial section and editors of your paper."
Although John Dougherty at the Mesa Tribune has resumed looking into the governor's business dealings recently, the remainder of the media, from the state's largest daily to its weekly, has been largely silent on Symington's financial affairs.