By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
Has Governor Fife Symington, who campaigned for governor on his business prowess but has since watched his financial empire crumble, now stiffed his wife and mother for hundreds of thousands of dollars' worth of campaign loans?
With his three campaign committees operating in the red, no repayments on the principal on loans from his wife and mother in two years and five loans now due, the evidence all points to a default. Unless Symington's kin have extended the terms, which then begs the question of whether the loans were ever really loans at all--but a convenient way to avoid campaign-finance laws.
Three years ago, Symington was in the middle of a tough Republican primary for governor and he needed money. Rather than tapping his personal real estate fortune, which at the time he valued at $12 million, he turned to his wealthy mother, Martha, who lives on an estate near Baltimore.
She consented to his request, sending Symington the first of seven loans totaling at least $669,000. Symington also hit up his wife, Ann, who loaned her husband, who keeps separate personal finances, at least $625,000.
Although state election laws limit individual campaign contributions to $550, Symington used the money to fund his various campaign committees during the primary and later during the general and run-off elections against Democrat Terry Goddard. The 1986 law overwhelmingly passed by voters makes no exception for loans from family members.
The Symington campaign stepped around the $550 limitation by pointing to a 1988 opinion by then-attorney general Bob Corbin which said loans from family members to candidates were exempt from campaign-contribution limits if the loans were accompanied by a promissory note and a reasonable interest rate.
So Symington and his wife and mother drew up a batch of promissory notes, which the governor refuses to release for public review. He did, however, allow assistant attorney general Lisa Howser to see the notes in October 1991.
According to Howser's notes, five loans totaling $356,000 plus interest are now due. Four of the loans from his mother, carrying an 8 percent interest rate, were due in January and February, and the fifth loan, a $225,000 note carrying a hefty 10.5 percent tab, is due in Ann's hands today.
Martha Symington's attorney, Tom Washburn, who drew up the promissory notes, declined on Monday to discuss the status of her loans. Jay Wiley, Ann Symington's attorney, said he didn't know what was going on with the loans. "I guess I'm not keeping as current on this as you are," he said.
The governor's office did not return New Times' telephone calls, but Symington's campaign treasurer, John Yoeman, says no loan payments were made from the Symington campaigns to the governor, so he could repay his wife and mother, in 1992. Campaign records show no payments were made in 1991, either, although $115,000 in interest was paid to Symington.
Asked whether Symington has refinanced the loans to his wife and mother or had the terms extended, Yoeman says he wouldn't know the arrangements between the family members. But as far as the campaign repaying Symington so the governor could repay his wife and mother, Yoeman says, "I don't think anything is going on."
Which raises the obvious question of whether the loans, which appear to be in default, were in fact nothing more than disguised campaign contributions.
A spokesman for the Attorney General's Office says just because the loans could be in arrears doesn't mean they could be considered campaign contributions or that they were negotiated in bad faith.
"Absent at the time of the origination of the loans some evidence that shows you never intended to pay the loan back, absent that evidence, a loan is a loan is a loan," spokesman Steve Tseffos says.
The murkiness surrounding the Symington family loans, which were crucial to Symington's come-from-behind win over Goddard, is conclusive evidence that all loans should be subject to campaign-finance laws, according to Dana Larsen, executive director of Arizona Common Cause.
"Loans from any source have a potential of turning into campaign contributions, and that's why we have always argued they should be subject to campaign limitations law," Larsen says.
Symington's three campaign committees have not taken out any new loans this year, and fund raising in 1992 was described by Yoeman as "slow." Yoeman is preparing Symington's 1992 campaign finance reports to be filed with the Secretary of State's Office on April 1.
Others familiar with Symington's upcoming campaign finance reports say "slow" is a gross overstatement of Symington's fund-raising machine.
"All three funds are in the red," says one political observer.
While Symington's campaign committees received a small jolt of juice from a January fund raiser, the present financial situation is bleak, especially for an incumbent governor facing a likely primary in the fall of 1994.
That might explain Symington's brazen request to Republican legislators last week to exempt the governor from portions of a 1991 campaign finance reform law--a bill that he signed.
The law prevents anyone who is doing business before the legislature from making campaign contributions to lawmakers, including the governor, while the legislature is in session and while bills are awaiting gubernatorial action. The intent of the law was to prevent lawmakers from being swayed on matters before them by lobbyists bearing gifts. Symington claims the law is unfair because it restricts him from raising money from lobbyists, while possible opponents don't face the same constraints.
Calling Symington's proposal "so blatantly self-serving it is amazing," Larsen vowed to fight the measure in the legislature, where few members have publicly embraced the idea.
Symington has little room to maneuver as the 1994 campaign bears down.
He's lost his real estate fortune, he's facing an unknown financial liability if he loses his lawsuit with the federal Resolution Trust Corporation, his legal bills are steadily mounting, his campaign committees are foundering, the legislature appears reluctant to cut him a special fund-raising exemption and he still owes at least $1 million, plus interest, to his wife and mother.
Yoeman, for one, is keeping a stiff upper lip.
"We are looking forward to a very aggressive fund-raising year in 1993," he says.