By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
There exists a remarkable memorandum, written by a Coopers & Lybrand executive, suggesting that Symington was in the loop during negotiations on the second Project SLIM contract. That memo is as close to an admission of bid-rigging as I have ever seen in print. When New Times' John Dougherty wrote about the memo months ago, it begged these questions: How much did Symington owe to Coopers before the Project SLIM contracts were awarded? Has any of that amount been forgiven by that firm? If so, when was the bill reduced, and why?
Those questions are raised all over again--in spades--by a bankruptcy filing listing a debt to Coopers & Lybrand that is "unknown." Of course, there may be a simple explanation for this odd "unknown" debt.
But a series of such unknowns, should they become the subject of media scrutiny, could raise the ambient temperature in the governor's office to uncomfortable levels.
Because of the circumstances of this bankruptcy, there are people who are going to be looking very hard, and very publicly, at just these types of discrepancies. These are people who are determined to follow . . .
Symington was forced into bankruptcy by McMorgan & Co., a San Francisco money manager that has been trying to collect an $11 million judgment that a group of union pension funds obtained against Symington. The debt stemmed from loans the pension funds made for the development of the Mercado, a failed downtown minimall.
It is clear that McMorgan is unhappy with our governor. McMorgan doesn't want to believe his net worth is just $61,000. McMorgan, therefore, wants to explore the financial situation of both the governor and his wife, Ann, who was co-guarantor of the pension funds' Mercado loan. Symington contends that his wife's guarantee only extends to her interest in their community estate--meaning that her significant personal wealth is beyond the reach of the pension funds.
McMorgan doesn't much care what the governor contends. The pension funds were set to begin rooting around in Ann Symington's estate when the governor decided to file bankruptcy.
McMorgan has suggested it may assume an adversary role in the bankruptcy court. It may contend that Symington should not be allowed to erase the $11 million debt to the pension funds through bankruptcy. You see, McMorgan claims that Symington submitted a financial statement indicating he had a multimillion-dollar positive net worth to obtain the loans and then, a year and a half later, reported that he was in the hole by millions and millions of dollars.
Those types of financial games are exactly what the U.S. Department of Justice and a grand jury have been investigating for--Lord knows--years now in regard to Symington's borrowing practices. And after months of apparent inaction, the feds are once again looking at Symington-related documents and deals.
So here's the situation, resignation handicappers:
Eleven million dollars in union retirement funds are gone. McMorgan and the unions appear to be especially upset with the governor's media stance, the Symington-as-victim pose. The unions probably think of the workers who lost $11 million as the victims in this little scenario. The unions see a governor who has raked in millions of dollars in development fees over the last decade or so--and now claims to have a net worth approximately equal to mine. They don't buy it.
Deep Throat told Woodward and Bernstein to follow the money. McMorgan & Co. wants to do just that, in a forum--bankruptcy court--that is public. Tax returns, bank accounts--many, many details that Symington has fought to keep private may be thrown into open court records. Meanwhile, the Justice Department will be sniffing around the edges.
The daily press will be hard-pressed to avoid learning newsworthy information about the governor's sorry financial state.
And three or five or eight months down the line, after a lot of grilling by the local and, perhaps, the national press, Fife Symington could well wind up regretting the following quote:
"We in the business community are being hurt every day because people in the rest of the country perceive us as being a state hopelessly mired in political turmoil."
It was published on November 1, 1987, just a few weeks after Symington called on then-governor Evan Mecham to resign.