By New Times Staff
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Ray Stern
By New Times Staff
By Stephen Lemons
By Chris Parker
It makes sense, doesn't it?
Symington cheated those who banked at Southwest Savings and Loan on the $30 million Esplanade investment; he cheated the taxpayers who had to cover the billion-dollar collapse of the S&L; and he cheated the construction-worker retirees out of $10 million in pension funds.
Would he cheat his uncle?
According to new legal documents in my possession, the FBI and the United States Attorney are examining the preparation of the governor's tax returns step by step. These investigators for the federal grand jury, which has targeted Symington, have interviewed the accountants who worked on the governor's returns.
It is always Tagamet time when the FBI begins nosing around your creative April 15 declarations.
But there is more bad news for Symington in the legal document on my desk--the "Van Voorhees Memorandum."
Whatever else emerges from the grand jury probe regarding Symington's tax situation, the investigation is bringing into sharper focus the dubious relationship between the governor and his high-powered accounting firm, Coopers & Lybrand.
For the first time, there are records from within Coopers & Lybrand that suggest why the governor's man, George Leckie, helped grease the multimillion-dollar bids on Project SLIM, enabling the Symington accountants to get a lock on lucrative state contracts.
The paperwork leads me to believe that the bid-greasing was a payoff.
"And why not? We bought the governor of Arizona fair and square," might well be the reasonable response from any bean-counter at Coopers & Lybrand.
You see, Coopers & Lybrand billed Symington at a phenomenal discount. In preparing one of the governor's complicated tax returns, for example, the accounting firm performed work that should have been worth 500 percent more than what was reflected in the bill to Symington.
Specifically, tax return preparation that should have cost roughly $12,000 was billed at approximately $2,000. This is just one item on Symington's accounting bill. To grasp what this sort of bargain pricing meant to Symington, you need to know that the governor was the largest client for one of Coopers & Lybrand's senior partners.
All of this is astonishing.
It's almost as though Fife Symington was Coopers & Lybrand's very own March of Dimes poster child, a fiscal clubfoot so pitiable that the accountants could not bring themselves to bill him.
But we all know that the bookkeeper's largess was not a simple matter of charity.
Fife and his charming wife, Ann, both possess enormous trusts courtesy of their ancestors, Henry Clay Frick and the founders of Olin Chemical, respectively. While Symington watched his creditors repossess his smarmy real estate developments, the regal couple had no excuse not to pay their full debts to their accountants, since the trusts that underwrite the Symington lifestyle were not subject to the creditors.
Why, then, didn't Coopers & Lybrand bill the unperturbed trust-funders for doing their tax return?
We cannot know with absolute certainty why the government is looking at Coopers & Lybrand billings unless the grand jury indicts. But it clearly appears that Coopers & Lybrand, by discounting Fife's bill, sought to curry favor for anticipated work from the State of Arizona.
Here is what we know.
Two members of Coopers & Lybrand were interrogated by the government in July of this year, according to the internal "Van Voorhees Memorandum," prepared by the accounting firm's attorney, Robert C. Van Voorhees.
Van Voorhees summarized the interviews in a letter prepared for Coopers & Lybrand's corporate counsel in New York, Michael Garrett.
When one of the accountants said he was unfamiliar with the governor's tax returns, the questioning then focused on senior partner Dan Windnagle.
"Significant time was spent," wrote Van Voorhees, "in going over the procedures Coopers & Lybrand used in preparing the tax returns: Who worked on the returns, what responsibilities did each have, who signed the returns, from whom did the information utilized to prepare those returns come, were those returns reviewed with Symington or Symington personnel . . ."
Federal investigators zeroed in on Coopers' recordkeeping regarding Symington's personal and business records.
"Considerable time was spent," continued Van Voorhees, "explaining what documents were received in the course of the preparation of the individual and entity tax returns, in which files they were kept, what those files were called, and where in the office those files were stored. Windnagle was asked to what extent tax preparation materials were on the computer. . . . The materials with respect to the Symington financial disclosure statements were not kept in the file room but were kept in a locked cabinet in the tax-staff room, whose keys were in John Yeoman's office."
Coopers & Lybrand partner John Yeoman served as the finance chair for candidate Symington. He was the campaign's bagman.
The feds seemed to understand that, in a more ethical world, the person in charge of keeping the financial records clean--the accountant--should not also be in charge of raising the money.
The federal prosecutors, understandably, paid particular attention to Yeoman."[David] Schindler [assistant United States attorney] also spent time exploring the relative significance of the Symington engagement for John Yeoman compared to his total mix of clients," noted Van Voorhees. "This was approached in several ways at various points in the interview. Generally, Windnagle said that all Mr. Yeoman's clients were important to him, but that Symington was probably Yeoman's largest client, and Yeoman appeared to have more than general knowledge of his financial affairs."
Find everything you're looking for in your city
Find the best happy hour deals in your city
Get today's exclusive deals at savings of anywhere from 50-90%
Check out the hottest list of places and things to do around your city