By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
How did it come to this?
It's simple. He lied. He lied some more. And then he lied about the lies.
That's what federal prosecutors allege.
Symington doesn't deny the inaccuracy of more than a dozen personal financial statements submitted to lending institutions from which he got hundreds of millions of dollars in loans. He admits they contain "errors and omissions."
The crux of Symington's defense is that the lenders paid no attention to the statements when they decided to issue the loans--and therefore the statements were immaterial.
Symington has been dodging this day of reckoning for more than a decade. While the Arizona Republic last Sunday pronounced Symington a "warrior" for surviving seven years of civil and criminal investigation, the reality is that he has hidden behind the multimillion-dollar skirts of his late mother and his compliant wife.
He's spent their money on expensive attorneys and public relations experts who have attempted to deflect civil and criminal charges and portray Symington as a successful businessman caught in the "great real estate depression."
The facts betray this defense.
Symington wanted to build massive commercial projects in a grossly overbuilt market. By 1987, warning lights were flashing all over Arizona--the real estate economy was overextended. By 1988, Arizona thrifts were collapsing like overdone souffles.
Symington propped up his real estate company and his personal wealth with phony financial statements that exaggerated his assets and understated his liabilities. This was not a difficult thing for Symington to do; he's spent most of his life masquerading as a wealthy man. Until he inherited millions from his late mother last winter, Symington never personally controlled the kind of wealth he grew up with on a Baltimore County estate. His first wife noted in 1970s divorce records that he constantly was in debt and lacked gainful employment.
However, he had the right bloodlines. Fife Symington is the great-grandson of one of America's robber barons, Henry Clay Frick. The patina of Eastern Establishment money opened doors for Symington, who came to Arizona fresh out of the Air Force and landed a seat on the board of directors of Southwest Savings and Loan. He was 27.
Southwest Savings became Symington's piggy bank. During the early 1980s, he used Southwest's money to fuel his tiny development company, which built small office complexes and warehouses in the Valley. He made his living by paying himself development and leasing fees.
But nickel-and-dime developments were not enough for Symington. The Harvard University graduate (major: Dutch art) yearned to make his mark. He wanted something lavish that also would generate millions of dollars in development fees for his firm, The Symington Company.
He wanted the Camelback Esplanade.
In September 1983, Symington convinced his fellow Southwest Savings board members to invest more than $30 million in land at the corner of 24th Street and Camelback Road so his company could develop a huge commercial, retail and hotel complex--the Camelback Esplanade.
Relying on the oldest principle in development--use other people's money--Symington borrowed most of the money he needed to set up the Esplanade partnerships from Southwest Savings. He became the managing partner in the Esplanade project by investing $216 of his own money.
But 20-story office towers didn't go over well with the neighbors; the towers also violated Phoenix zoning ordinances. Symington used Southwest Savings money to launch a massive publicity campaign and convince the Phoenix City Council to revise its zoning and approve a scaled-back, eight-story version of the complex.
Storm clouds continued to gather over the Phoenix real estate market. Years of overbuilding fueled by thrift deregulation and real estate tax breaks ended with congressional approval of the 1986 Tax Reform Act.
Southwest Savings notified Symington that it would not finance construction of the Esplanade. About the same time, Symington and his partner, I. Jerome Hirsch, had a falling out. (Hirsch presciently had urged Symington to more closely manage the Esplanade project lest it become a "white elephant.")
Symington needed millions of dollars to buy out Hirsch's share of the project--and hundreds of millions to build the Esplanade. So he borrowed.
In 1985, he borrowed $2.25 million from construction magnate Robert Hunt so he could buy out a portion of Hirsch's stake in the Esplanade. This loan would be the first of many Symington would fail to list on subsequent personal financial statements, prosecutors allege.
But Symington needed more money to build the Esplanade, and Arizona lenders were wary of such massive projects.
So Symington went to Japan, where he found bankers willing to invest in Arizona's shaky real estate market. Dai-Ichi Kangyo Bank lent Symington's company $77 million in 1987 and another $50 million in 1988 to build the Ritz-Carlton hotel and two office towers at the Esplanade. Symington convinced Shimizu Development Company to be his equity partner and invest more than $30 million in the project.
Symington was home free, almost.
Dai-Ichi did require a few safeguards. It demanded that Symington personally guarantee to repay up to $9 million of the loans. It also won a provision that would put the loan into default if Symington's net worth dipped below $4 million.