By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
With the exception of the union pension funds, no lender pressed Symington for full repayment of his loans. In July 1995, the pension funds obtained a judgment against Symington for defaulting on the Mercado loan. Symington filed for bankruptcy protection in September 1995, declaring $25 million in debts and $69,000 in assets.
During his sworn bankruptcy examination on October 31, 1995, Symington allegedly lied when asked about the accuracy of his December 31, 1989, financial statement. That testimony led to a charge of perjury.
The pension funds have sued Symington in bankruptcy court claiming he fraudulently obtained the pension-fund loan for the Mercado by submitting a false financial statement. The case is expected to go to trial this fall.
Symington's house of cards might have stood if it hadn't been for the Resolution Trust Corporation, created in 1989 to liquidate the assets of the nation's failed thrifts. In December 1991, RTC sued Symington and other members of the Southwest Savings and Loan board of directors in connection with the failure of the thrift, which cost taxpayers nearly $1 billion.
RTC settled with the defendants in July 1994 after the estate of the thrift's late owner, billionaire Daniel Ludwig, agreed to pay a $12.1 million settlement. Symington was dropped as a defendant in the civil suit after RTC reviewed his financial statements and determined that he had no assets that could be recovered.
But the RTC investigation turned up enough information about Symington's finances that it led to a criminal referral to the Department of Justice in September 1991.
Symington and his advisers attempted to focus attention on the RTC civil suit while the governor's Washington, D.C., attorney, John Dowd, quietly tried to derail the criminal probe.
In October 1992, Dowd offered to make Symington available to the U.S. attorney for the "stated purpose of bringing the investigation to quick close," court records show. In January 1993, Symington was informed he was a target of a criminal investigation.
At Dowd's request, Symington was interviewed on February 4 and 5, 1993, under oath by federal attorneys in Phoenix. Dowd agreed at the conclusion of the interview to provide further written comments to the U.S. attorney.
Over the next 15 months, Dowd submitted four lengthy statements to prosecutors, attempting to convince them not to indict the governor.
Nevertheless, the grand jury investigation continued and gathered more evidence from hundreds of witnesses.
By 1995, prosecutors were convinced that Symington had lied to them during the initial 1993 interviews and that Dowd's four written statements were misleading.
"After conducting a thorough investigation of those statements and assertions, this Office determined that many of them were inaccurate, without evidentiary support, misleading, or just plain false," federal prosecutor Jeffery Issacs states in court filings.
In November 1995, prosecutors wrote Dowd informing him that the U.S. attorney was considering filing charges "relating to false statements made by Mr. Symington to the Department of Justice . . . and false statements on behalf of Mr. Symington in subsequent written submissions to the Department of Justice."
In repeated conferences and letters in early 1996, Dowd vigorously contested the government's position that Symington lied and should be indicted. Dowd was successful, at least in part.
On May 30, 1996, prosecutors told Dowd that Symington would not be indicted on charges of making false statements during his February 1993 interview. A week later, Dowd was informed that the grand jury would be asked to indict Symington on more than 20 felony counts.
On June 13, 1996, Arizona Governor J. Fife Symington III was indicted on 23 felony counts. (Judge Strand dismissed one count last week.)
Eleven months later, Symington's opportunity to tell his side of the story is finally at hand.
As for the Esplanade, Symington lost his stake in the property when RTC took it over and sold it to a Boston investment company in 1994 for $69 million.
The sales price was about one third of the amount of money Southwest Savings, Dai-Ichi and Shimizu poured into Symington's ill-fated project.