By New Times Staff
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Ray Stern
By New Times Staff
By Stephen Lemons
By Chris Parker
The pension-fund representatives viewed Symington's statements as "serious threats to use his position as governor to cause the pension funds financial harm and embarrassment if they did not bend to his demands," court records state.
Symington's financial costume changes continued. On July 18, the day after meeting with the pension-funds managers, Mallery had a letter hand-delivered to First Interstate. It claimed that Symington had "had a constructive negotiating session" with the pension funds and that there was a "preliminary understanding" that Symington would be released from his personal guarantee.
The letter, prosecutors allege, was a fraudulent attempt to convince First Interstate that Symington's financial condition was improving.
Symington's Mercado partnership failed to make payments the next three months, and on October 11, 1991, Symington had another conversation with pension-funds manager Donald Eaton.
According to Eaton's notes of the conversation, Symington "threatened that if the pension funds filed a notice of default," Symington would not deliver the ASU lease, would "call off" the county from leasing space and "steer away" a congressman who might lease space.
The government has charged Symington with attempted extortion for his dealings with the pension funds over the Mercado loan.
The pension funds ignored the threats and proceeded toward foreclosure on the Mercado.
During the Mercado negotiations, the pension funds insisted that Symington's accountants prepare a certified financial statement for the governor. The pension funds weren't alone. First Interstate also wanted a report.
In July 1991, the governor's personal, business and campaign accounting firm, Coopers & Lybrand, received several versions of Symington's 1990 and 1991 financial statements. C&L had been reviewing Symington's statements for a number of years. But when it received the 1990 and 1991 statements, C&L accountants realized that Symington had failed to provide accurate information for the firm's 1987, 1988 and 1989 reviews.
Despite the discrepancies, the firm agreed to prepare a certified confidential statement for Symington at the urging of C&L partner John Yeoman.
At the time, Symington was Yeoman's largest client; Yeoman had served as Symington's campaign treasurer. Symington owed C&L tens of thousands of dollars. In July 1991, C&L was also bidding to run Symington's government-reform proposal, Project SLIM. (C&L won the $1.5 million contract, and Yeoman and former gubernatorial aide George Leckie were indicted for rigging it. Yeoman subsequently was killed in a traffic accident; Leckie is currently on trial in U.S. District Court.)
C&L finished its report on Symington in August 1991; it showed his net worth to be negative $22.6 million as of May 31, 1991.
The confidential report revealed that there had been "many material errors and omissions" in Symington's December 31, 1989, statement, which he had used repeatedly during the 1990 campaign.
The C&L report was carefully controlled and only released to certain lenders. Copies were sent to the pension funds, Citicorp Real Estate, Inc., Valley National and First Interstate.
The report was instrumental in allowing Symington to renegotiate favorable settlements with Valley National, First Interstate and Citicorp, all of which required small payments for several years and then a balloon payment in late 1995. Symington borrowed money from his mother to make periodic payments. Not long before the balloon payment came due, he filed for bankruptcy.
The workout negotiations with Citicorp on a $10 million loan were more difficult than with other lenders. In November 1991, Citicorp asked Symington for a copy of his December 31, 1990, financial statement.
C&L prepared a letter for Symington to send to Citicorp that simply stated: "A December 31, 1990, financial statement was not prepared." Symington signed the letter on November 22, 1991, and submitted it to Citicorp.
The government alleges that Symington committed wire fraud when he sent the letter to Citicorp because he had prepared two December 31, 1990, financial statements: one showing a net worth of $5.4 million and the other showing a negative net worth of $4.1 million.
While the C&L report was submitted to several lenders, it was never sent to Symington's most important creditor, Dai-Ichi Kangyo Bank. It was imperative that Symington maintain a net worth of $4 million or he could lose his share in the Esplanade, which he believed would one day recover its value.
During construction and initial startup operations of the Esplanade, Symington was required to submit monthly statements so he could get operating funds from Dai-Ichi. In these statements, the governor had to reaffirm he had a net worth of at least $4 million.
Symington continued to tell Dai-Ichi he was worth $4 million even after C&L had prepared its certified financial report showing he had a net worth of negative $22.6 million. Three of the criminal counts against Symington are related to the submission of the monthly statements.
On May 4, 1992, Dai-Ichi wrote Symington and asked him to send copies of his 1990 and 1991 financial statements as required under the loan agreements. Symington sent a copy of a 1991 financial statement showing a negative net worth of $22.6 million.
Dai-Ichi responded by saying it wouldn't take immediate action against Symington, but it reserved the right to declare him in default in the future. The bank also asked Symington for a copy of his 1990 financial statement.
Instead of sending a copy of the statement, Symington wrote Dai-Ichi a letter saying his net worth on December 31, 1990, was $5.4 million even though he had submitted another December 31, 1990, statement to First Interstate showing a negative $4.1 million net worth. That letter inspired another criminal count.
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