By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Yeoman is particularly vulnerable. The fraud and perjury charges each carry five-year maximum prison terms; the obstruction charge could bring ten years. Each count also carries a fine of up to $250,000.
Yeoman is also alone. Coopers & Lybrand fired him last week; he had been on administrative leave from the firm for months. Coopers & Lybrand is no longer providing Yeoman with legal counsel and, to make matters worse, the firm is cooperating with federal investigators.
And it is Yeoman who knows the intimate details of Symington's financial matters. New Times' source says these matters--particularly Symington's practice of preparing financial statements of varying net worths--are of great interest to the grand jury.
Yeoman's attorney, Douglas Behm, declined to comment on the indictments. Neither Leckie nor Symington returned phone calls.
As if the indictments of two former aides weren't enough, Symington continues to fare poorly in his federal bankruptcy case. Symington filed bankruptcy in September, seeking to erase $25 million in debts while claiming only $61,000 in assets.
The governor already has been accused of fraud in the bankruptcy case by his former business partner, Jerome Hirsch, who claims he was cheated out of hundreds of thousands of dollars in a business deal with Symington.
Bankruptcy court Judge George B. Nielsen has hinted in rulings that the extensive estate held by the governor's wife, Ann Symington, may be vulnerable to creditors. Ann Symington has not filed bankruptcy; she and her husband claim they maintain separate finances.
But the union pension funds' attorney has submitted documents that appear to show the Symingtons have commingled their finances and transferred assets back and forth during the past five years.
The pension funds also have discovered several examples in which Symington appears to have issued false and misleading financial statements to lending institutions. If true, the bankruptcy court could reject Symington's request to dismiss his debts. In addition, Symington could face federal bank-fraud charges.
Ironically, Symington is attempting to keep the pension funds from seeing his personal and business records by claiming they have been turned over to the grand jury and are therefore confidential.
The pension funds have asked a U.S. District Court in Phoenix to allow them to copy the records Symington has turned over to the grand jury. Significantly, the bankruptcy trustee, Louis Movitz, has joined the pension funds in asking that the documents be made available.
The U.S. Attorney's Office in Los Angeles, which is directing the investigation, has no objection to the pension funds' request.
Among the records the governor is refusing to release are income tax returns prepared by Yeoman.
Project SLIM dates to Symington's first campaign for governor. During the winter of 1990-91, Leckie, who was Symington's campaign finance chairman, and Yeoman, who was campaign treasurer, began discussing with Symington ways in which Coopers & Lybrand could obtain state business if Symington were elected.
Yeoman testified in a 1994 civil case that Symington reacted "positively" when told about the services Coopers & Lybrand could offer the state.
He testified that "almost immediately" after Symington was elected, the governor made Project SLIM "a high priority." Yeoman continued talks with Leckie and Symington concerning the "scope of services" Coopers & Lybrand could provide.
By June 5, 1991, Coopers & Lybrand officials were formally meeting to develop a strategy to win the Project SLIM contract. Yeoman continued to meet with Leckie and Symington and pressed them to "move forward with some of the things you talked about in the campaign" with the hope of Coopers & Lybrand landing some business, Yeoman testified.
Symington appointed Leckie in July 1991 to a state selection panel reviewing bids for the Project SLIM consulting contract.
The federal indictment alleges that Leckie, in violation of a confidentiality pledge he signed, met with Yeoman at Paradise Valley Country Club and illegally told Yeoman the amounts of other bids submitted.
Yeoman apparently was confident that Coopers & Lybrand would land the contract; five days before it was awarded, he sent an unsigned letter to Leckie discussing the accounting firm's "plans for the second phase of Project SLIM," according to the federal indictment.
The second phase of Project SLIM--implementation of the programs designed during the first phase--has been overlooked by the media as well as by investigators for Maricopa County Attorney Richard Romley and Attorney General Grant Woods. Neither prosecutor filed criminal charges, although Woods won a $725,000 civil settlement from Coopers & Lybrand and a $25,000 civil settlement from Leckie.
The second phase of Project SLIM was worth $3.1 million, nearly twice as much as the $1.53 million contract allegedly rigged by Leckie and Yeoman. Symington's role in making sure Coopers & Lybrand won the second-phase contract is clearly documented in the accounting firm's internal files.
Although the second phase had never been publicly advertised and Coopers & Lybrand had no contract to do such work, Symington and Leckie offered the firm a deal in early 1992.
"They asked that we begin implementation on one of the [state] agencies in good faith 'on the come' with the understanding that we would be paid in the next fiscal year," a January 1992 Coopers & Lybrand memo states.
Coopers & Lybrand agreed to the deal, butdidn't have to do the work "on the come." Instead, the company won an $80,960 no-bid contract from the Arizona Department of Transportation. The federal grand jury has subpoenaed ADOT's records concerning the awarding of the contract.
The ADOT contract served as a springboard for Coopers & Lybrand to land thestatewide implementation contract thatwas finally put out to bid in July 1992. That same month, Coopers & Lybrand won the bulk of the Project SLIM second-phase contract, which paid the firm more than $3.1million.