By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
Governor J. Fife Symington III is all but surrounded.
Creditors who allege he committed fraud are seeking to prevent him from erasing $25 million of debts in bankruptcy court. One creditor has even raised the suggestion in court filings that the governor used a front company to hide assets.
The federal government says Symington's a crook, alleging he committed 23 felonies in connection with obtaining hundreds of millions of dollars' worth of loans. Conviction on even one count will strip Symington of his office and, perhaps, send him to prison.
His former top aide, George Leckie, faces a federal criminal trial next month on seven counts of fraud related to the awarding of a state contract to Symington's personal accounting firm. Attorney General Grant Woods is also investigating Leckie and others in a purchasing scandal at the Department of Corrections, a spokeswoman for Woods confirmed last week.
Bad as it may seem on the surface for Symington, his legal situation is worse than it first appears. The bankruptcy and criminal cases are cross-pollinating each other with every new damaging revelation. Symington's legal bills are rapidly mounting; one expert has estimated them at a minimum of $10,000 a week.
Now, adding fuel to the fire that seems about to engulf the governor, a recall campaign organized by prominent Democrats, including former secretary of state Richard Mahoney, is cranking up this week.
Never before has an Arizona politician faced such a formidable, multipronged attack. Evidence the governor gives in any one of the legal cases may wind up being used against him in another. And as the cases against him and Leckie continue, they will provide the press with a steady stream of information about Symington's collapsed and questionable finances. Those stories will be seized by recall supporters as they round up signatures.
In his increasingly desperate fight for personal, economic and financial survival, the governor and his attorneys have followed one strategy above others. They have stonewalled.
So far, stonewalling has delayed the legal assaults against Symington. Whether the strategy will in the end help his public standing is another question entirely.
For the past four months, Phoenix attorney Michael Manning has been demanding access to records of long-distance telephone calls the governor made on state-owned phones. Manning is the lead attorney representing a consortium of union pension funds challenging Symington's bankruptcy filing. Symington owes the pension funds $12 million stemming from his default on a loan for the Mercado development in downtown Phoenix.
Manning has not been alone in seeking the telephone records. Several newspapers, including New Times, along with a couple of Phoenix television stations, have also requested the governor's phone records under the state public records law.
The governor has refused to produce the records.
His bankruptcy attorney, Robert Shull, claims they are not subject to review under bankruptcy rules. The legal counsel for the Governor's Office, Lisa Hauser, has rejected media requests to see the records, claiming the governor's phone records are exempt from the Arizona public records law under the doctrine of--shades of Watergate--executive privilege. Hauser has asserted this novel legal theory even though Symington released an early set of his phone records to the press in 1991.
Symington's refusal to produce the phone records triggered Manning's decision to file a detailed pleading last month in bankruptcy court. That pleading asks the bankruptcy judge to issue a subpoena for the telephone records based on suggestions that the governor has used his business associations to hide assets from his creditors.
Those suggestions are hotly denied by Symington's attorney, but they are backed by significant amounts of circumstantial evidence.
It's December 1993, and Governor J. Fife Symington III is playing hardball with an investor in two failing commercial projects he developed--the Camelback Esplanade and the Scottsdale Seville.
The company has a potential buyer for the properties waiting in the wings; a sale would end Shimizu's six-year nightmare of a partnership with Symington.
But there is a snag.
The governor won't sign over to Shimizu control of key partnerships in the Esplanade and Seville. The partnerships have no equity value because both projects are losing money. Nevertheless, Symington is unwilling to give up control unless Shimizu makes concessions.
The negotiations begin. Symington and Shimizu officials did not return New Times phone calls seeking comment. But a source close to the transaction tells New Times that Symington threatened to throw the partnerships into bankruptcy, which could have delayed Shimizu's sale of the properties and increased the company's losses, if he did not get concessions.
And bankruptcy records suggest that Symington did, indeed, have leverage in his negotiations with Shimizu. By December 14, Shimizu agrees to pay $500,000 for Symington's partnership interest in the Seville and another $360,000 "in an appropriate manner that suits the governor's requirement," Shimizu records cryptically reveal.
Then, Symington adds more demands.
He wants the $500,000 for his Seville interest paid to his mother, Martha Symington, who lives outside Baltimore and who was told by a financial expert hired by the governor earlier in 1993 that her stake in the Seville was worthless. And, the governor says, he wants $300,000 for himself.