First Interstate Blank Check

Bank gave governor loan write-downs, despite evidence of false financial statements

By December 1991, Symington's partnerships owed $1.98 million on the Alta Mesa project and $1.1 million on the Mercado construction note, according to the workout agreements.

First Interstate modified both of the loans, giving Symington generous repayment terms: For every $1 Symington paid, the bank would credit his account with an additional $2.

The three-for-one deal was not the only portion of the workouts that benefited Symington.

The bank also slashed the normal monthly interest charges by about 90 percent.

And First Interstate delayed interest payments until November 15, 1995, and extended the due date for principal to September 1, 1998.

The $1.98 million Alta Mesa indebtedness was reduced to $681,104 if the governor paid that amount in principal by September 1, 1998. The $12,000 monthly interest bill under the previous terms was reduced to $1,500 a month commencing on November 15, 1995, loan documents show.

The $1.1 million Mercado indebtedness was reduced to $547,469 if paid by September 1, 1998. The approximately $6,000-a-month interest rate under the previous terms was reduced to $1,000 a month commencing on November 15, 1995.

Even under the generous workout agreements, Symington was unable to repay the First Interstate loans.

The loan modifications came nine months after Symington took office in March 1991. A former First Interstate Bank executive, Gerard Tobin, headed Symington's transition team and later became acting director of the state Department of Administration.

The department controls a $125 million-a-year budget and oversees operations of all state office buildings, leasing of private property and awarding of state contracts.

The latter role brought Tobin into the middle of Symington's troubled Project SLIM. Tobin attended meetings in July 1991 between Symington aide George Leckie and Coopers & Lybrand tax accountant John Yeoman. Yeoman also had served as Symington's campaign treasurer.

Coopers & Lybrand later won a $1.5 million contract for the first phase of Project SLIM, after lowering its bid at the last minute by $400,000.

The bid triggered an investigation by the state Attorney General's Office that determined Yeoman had obtained inside knowledge of competitors' bids. Coopers & Lybrand paid $725,000 to settle a bid-rigging investigation without admitting wrongdoing.

Tobin also attracted attention after he purchased Apple Macintosh computers for his office in July 1991. Lawmakers complained that the purchase circumvented the appropriations process, and they questioned the computers' compatibility with equipment already installed at other state agencies.

The purchase was made shortly after Apple agreed to lease space inside Symington's Esplanade commercial, retail and hotel development at 24th Street and Camelback. Symington no longer controls the Esplanade.

Tobin's appointment as Administration Department director was rejected by the state Senate, and Tobin left state government in March 1992.

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