SHE WAS ONLY FOLLOWING ORDERS

Thanks to a breach in Governor Fife Symington's security, I now know the nature of his executive secretary's testimony before the grand jury last week.

Joyce Reibel's statements occurred behind closed doors and are, of course, privileged. But her testimony before the grand jury was preceded by a government interrogation last October 7.

The prosecutor's questions that October day zeroed in on Symington's paperwork, his financial statements, and fresh allegations of white-collar fraud in the collapse of his real estate empire.

That information is contained in a confidential, 15-page, single-spaced report written by secretary Joyce Reibel's own attorney. The memorandum, prepared by Ivan Mathew following the October meeting "pursuant to a joint defense agreement" between Symington and Reibel, charts the government's questions and Reibel's responses. But the secret memorandum is no longer secret.

The document in my hands maps out the territory the prosecutors would have explored with Reibel in front of the grand jury.

It is a hostile landscape for a mere secretary.
@rule:
@body:Joyce Reibel could not have imagined herself testifying in front of a grand jury when she first went to work for Symington in 1982. The governor's secretary was a woman with aspirations. She had hopes. Symington took advantage of Reibel and milked her dreams.

Now Reibel is in an impossible position with the prosecutors because of the bind Symington put her in.

At the very beginning of her October grilling, as Reibel outlined her 11 years with Symington, she told the prosecutors about the governor making a statement to her "that she is more than just a secretary to him, that she is an associate of his."

But Reibel did not know anything about real estate except what Symington taught her. She never had a real estate license or any sort of professional license. Her schooling consisted of a junior-college degree in education.

Reibel did rudimentary bookkeeping and, in a more candid reflection of her status in the Symington Company, told prosecutors that she fetched his kids and picked up his prescriptions. She wasn't an associate, she was a secretary.

And yet Symington had her sign a "management representation letter."
This document is a sophisticated accounting instrument used by financial institutions. For example, before a reputable firm like Peat Marwick will vouch for its audit of your company's business health, it asks you to sign a management representation letter swearing that the numbers you gave it to work with are honest and accurate.

According to a senior partner in a Big Six accounting firm, the industry standard is that those letters are signed by a company's chief executive officer or the chief financial officer. Not the woman you send out on errands.

By having her sign the letter, Symington put Reibel in the position of vouching for the integrity of the numbers given out by his highflying, multimillion-dollar real estate mirage.

The woman who dashed out for Symington's pills and chauffeured the Symington children and worked for an hourly wage found her neck on the chopping block as the prosecutors raised their ax.

Confronted with pointed questions about allegations of felonious criminal fraud, Reibel's pose of company insider crumbled. She admitted that, far from being an associate, her job was "mechanical" and she did what she was told.

Here is all you need to know about the tenor of her remarks to the prosecutors: One of her deepest feelings is that she was underpaid.

The picture of Joyce Reibel that emerges from her lawyer's confidential memorandum is that she is every bit as loyal as Richard Nixon's Rosemary Woods. But Joyce Reibel is nobody's fall guy. When push came to shove, she gave up her boss, Governor Fife Symington.

@rule:
@body:Throughout the Eighties, Joyce Reibel helped Fife Symington fill out the financial statements now being gone over with a fine-toothed comb by the federal government. A reading of Mathew's memorandum makes one thing clear: Prosecutors are concerned that when Symington and Reibel filled out those financial statements, the two lied about his income, inflated the value of Symington's holdings and failed to include debts and obligations. It also appears that the government suspects Symington maintained several sets of records, coding them to keep track of what he was telling various lending institutions.

If the government's most recent line of inquiry is an accurate reflection of its case, the feds suspect Symington of propping up his now-worthless, but once multimillion-dollar, real estate portfolio with phony financial statements. Credit lines, loans, investments, partnerships, bankruptcies, debt restructuring, write-downs--the whole shooting match of the go-go S&Ls of the Eighties--were constructed on that most fundamental building block: the financial statement.

It is both a federal and state felony to knowingly falsify financial statements, and the government can put you away for 30 years and fine you up to $1 million for such chicanery.

As government investigators confronted her last October with subpoenaed Symington files and questioned her about possible fraud, Reibel's answers incriminated the governor as well as herself. For example, she was shown a December 88 financial statement containing a real estate schedule listing Symington's obligation as a guarantor of a $4 million loan.

According to her attorney, "Ms. Reibel stated that she typed this in."
But when she was shown a second financial statement from the same period that was given to Valley National Bank, the $4 million loan was missing.

Asked to explain the discrepancy, Reibel said she would have added or deleted the $4 million obligation based upon instructions from Symington or his accountants, Coopers & Lybrand.

Informed that the accounting firm was on the record denying any involvement, Reibel responded, "Then it was the governor."

Shown a financial statement from a year earlier, December 31, 1987, Reibel's attention was called to the line containing the governor's salary of $200,000 from the Symington Company.

Reibel admitted that when she filled out the financial statement, she was in possession of a W-2 showing Symington's salary as less than $200,000 for 1987. Her lawyer's notes say she knew "the numbers were wrong."

She explained this deception saying she was told "by the governor to put this amount down."

Although Reibel acknowledged that she had the paperwork on loans owed by Symington to his mother, Martha, she could not explain why a $300,000 debt to this woman was missing from the governor's 1989 financial statement.

"Ms. Reibel stated that it was not her place to place a note payable on the financial statement. The governor did not tell her to add the notes," claims her lawyer in his memorandum.

Now this is an odd piece of business.
Reibel overlooked a $300,000 Symington debt the governor neglected to include on a financial statement because "it wasn't her place" to question the governor. She also told federal investigators that "her job was typing and that she oftentimes did not even consider what she was typing."

And yet the feds produced management representation letters signed by Reibel, one inked as recently as 1991.

Why was someone who inflated salaries, overlooked $300,000 debts and neglected $4 million obligations signing papers swearing to the accuracy of the very forms she habitually lied on?

The most troubling page of the Reibel memorandum covers "coded" financial statements and multiple financial statements for the same date.

Asked if Symington "coded" his financial statements to identify where the records were going, Reibel at first said she was unaware of any such activity. Then she "clarified" her answer to say that business reports had started to be coded during the gubernatorial campaign. Reibel said the coding was done to trace the origin of leaks about Symington's finances during the election.

This plausible explanation was contradicted by the prosecutors, who told Reibel, "They believe the governor had coded financial statements prior to the campaign."

The significance of the prosecutor's suspicion was underscored when Reibel was then asked if different financial statements existed for the same date. Reibel admitted that, yes, the files contained multiple, and differing, sets of financial statements for the very same date.

This creates the possibility that Symington could have sent contradictory financial statements out to different lending institutions and regulatory bodies, depending upon what he needed to tell whom. Then he kept track of the various versions with a system of codes.

If this happened, it is not marginally unethical. It is highly illegal.
Reibel's explanation for multiple financial statements is not reassuring.
"She stated that whenever a bank needed financial information, she would pull out a financial statement, type it and then the governor would make the necessary changes on it," and "no," Symington never explained why financial statements for the same date were altered. The one time Reibel remembered Symington elaborating "was when he stated that the Mellon Bank did not need information they already had."
Which is a hilarious recollection.
There may be perfectly reasonable explanations for the problems the government's investigators have found in Symington's financial statements.

But prosecutors interviewed the governor before they interviewed Reibel. If Symington's answers had put the matter to rest, you could not tell from the pointed cross-examination of Reibel.

It is clear from the government's interrogation of Reibel, as well as a federal subpoena first disclosed in New Times last October, that the United States Attorney's Office is expanding its probe into allegations of financial fraud aimed at Symington.

Both Symington and his Washington, D.C., attorney, John Dowd, declined comment when contacted last Monday.

@rule:
@body:The original criminal referral sent to the Justice Department by the RTC focused upon Symington's role in the collapse of Southwest Savings and Loan. He was accused of violating federal guidelines in the S&L's investment in the Esplanade, a project Symington developed and Southwest's largest single loss.

Specifically, Symington, as a board member of Southwest, was accused of bypassing conflict-of-interest regulations when his S&L invested in the governor's own high-rise.

Symington was also charged with failure to obtain a proper appraisal.
In addition to the criminal investigation, the RTC sued Symington and his fellow directors at Southwest for $197 million, citing their negligence as the root cause of the S&L's failure. The governor was personally identified as reaping "millions of dollars in unwarranted revenue."

From the beginning, Symington has said that he is the target of a political witch hunt. The governor has always maintained the troubled Esplanade investment will prove itself if federal regulators will just give the project enough time.

Meanwhile, Joyce Reibel has run out of time.
The presence of her lawyer must have been cold comfort as she faced her interrogators last October.

Sitting across the table from her were two prosecutors from the United States Attorney's Office in Los Angeles, an FBI agent and a forensic accounting investigator whose specialty is white-collar rip-offs, bookkeeping fraud, embezzlement, document forgery, ledger manipulations and financial theft.

When they finished grilling Joyce Reibel, the government's lawyers told her that her alibi for the coded financial statements didn't wash. They also told her they thought she knew more than she was letting on.

And so Joyce Reibel, the underpaid secretary, was marched into the grand jury room last week like every other witness. Alone.

And the noose around Governor Fife Symington's neck continued to tighten.

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