By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Symington's close ties with Todd and Core Properties, and their ties to Mexico and the state Department of Commerce, form a backdrop for Manning's investigation of the wind-up of Symington's involvement in the Esplanade and the Seville projects.
In conveying his interests in those developments to Shimizu, Symington required the Japanese firm to pay Todd a $60,000 consulting fee. Core Properties subsequently paid The Symington Company $57,500. But there was another element of the deal: The governor also insisted that Shimizu agree to retain Core Properties as property manager at the Esplanade and Seville projects and not to terminate Core Properties without his permission.
"Mr. Symington orchestrated each of these lucrative benefits for Core even though he supposedly retained no interest in Core or its profits," Manning states in the pleading.
Symington's bankruptcy attorney, Robert Shull, responded bitterly to Manning's pleading, claiming Manning's statements were false and scandalous.
"The Pension Funds' response offers nothing more than evidence that the Debtor [Symington] had ongoing business relationships after he became Governor--but the Pension Funds fail to comprehend that business relationships alone are not sinister, nor are they evidence of hidden assets, conspiracies, or bankruptcy crimes," Shull stated.
The governor's attorney then asked the court to impose sanctions on Manning for "unfounded accusations" concerning Symington's relationship with Todd and the Shimizu transactions. The court has not yet ruled on Shull's request.
Shull, however, continues to refuse to give up the governor's phone records--records that could help exonerate Symington or open another Pandora's box of problems for his crippled administration.
"Through analysis of the telephone records, the Pension Funds will be able to identify those persons with whom Mr. Symington had business and financial dealings," Manning says in court documents.
"The Pension Funds then may interview those persons to determine the extent of their knowledge of Mr. Symington's assets, investments, and other financial interests."
Manning's persistent investigation into Symington's finances already has affected the governor's criminal case--and hardly to his benefit. One of the 23 felony charges against Symington alleges he committed perjury when he testified in the bankruptcy case last Halloween.
In fact, there are many parallels between the criminal charges Symington faces and the detailed allegations made by the pension funds in a bankruptcy fraud suit they filed against the governor in July. The suit seeks to prevent Symington from erasing his $12 million debt to the pension funds.
The first four counts of the criminal indictment allege Symington committed crimes when obtaining construction loans from First Interstate Bank to build the Mercado. The pension-fund fraud suit, meanwhile, alleges Symington committed fraud when he submitted financial statements to obtain $10 million from the pension funds to repay a construction loan for the Mercado, a downtown minimall.
Both cases claim Symington knowingly submitted numerous false financial statements to lenders to obtain loans.
They both claim Symington deceived lenders into believing he had full access to about $800,000 worth of securities when the stocks, in fact, were under the control of trust funds that could not be tapped by creditors.
They both charge that the governor repeatedly overstated the value of his assets and understated his liabilities when seeking loans, and reversed the scenario when attempting to avoid repaying obligations.
The overlapping aspects of the two simultaneous cases place Symington in a difficult and unusual position.
"It's not common that you have a person held hostage on so many fronts," says former U.S. attorney Melvin McDonald, who now practices law in Phoenix and is a member of the Gilbert City Council.
Symington faces not only huge legal bills stemming from both cases, but also the possibility that a decision or activity in one case could have a negative impact on the other.
For example, in three days of sworn bankruptcy depositions, Symington admitted that he relied on what he "hope[d]" real estate values would be well in the future when he prepared his financial statements, instead of using then-current market values. That admission of extraordinarily unusual valuation methods may well turn up as evidence in a federal criminal case that charges him with misleading financial institutions with phony financial statements.
McDonald says Symington's best game plan may be to try to delay his bankruptcy case until the criminal case is concluded. Such delay, McDonald says, could prevent additional sworn disclosures in the bankruptcy case from spilling over to the criminal case.
So far, however, there is no indication the governor is seeking to delay the bankruptcy. Symington's bankruptcy lawyer, Shull, declines to comment on the case.
And it is far from a given that Symington could get a bankruptcy judge to approve such a delay. After all, the governor voluntarily placed himself in bankruptcy. And some experts have suggested that by testifying in the bankruptcy, he has waived his right to refuse further questioning on grounds he might incriminate himself.
As the fight over telephone records proceeds, Symington and his attorneys are also attempting to keep secret some records dealing with his criminal case. Oddly, those records were produced at the request of the Symington legal team.
While the extent and severity of the criminal indictment against the governor may have been a surprise to the public, Symington has long known why federal prosecutors were investigating him.