The Handwriting's on the Wall

Fife Symington's own scrawls reveal a plot to suppress evidence of his plunging net worth

"VNB has always accepted a compilation in the form I have given--never required more," Symington's notes state.

So had other lenders, including Citicorp and MeraBank, his notes state.
"MeraBank--recent loan/past--has never required a review--have accepted the VNB form, a compilation," Symington's notes state.

Besides insisting on using a compilation based on his financial statement prepared on the Valley National form, Symington also was prepared to argue that he knew far more about the value of his real estate assets than professional appraisers or accountants.

"I have sold properties over the years for values higher than appraised value," his notes state. "I am the best judge of these values and will be happy to explain them to DKB [Dai-Ichi]."

Symington's notes also sketch out his fallback position in case Dai-Ichi insisted on a full-blown audit. The notes show that Symington would accept a review and determination of "net worth x," but in that case, he would insist on a release from the $4 million net-worth requirement.

"As long as I'm solvent, not . . . default," his notes state.
Dai-Ichi agreed to Symington's demands to accept a compilation letter prepared by his accounting firm, Coopers & Lybrand. The letter was attached to Symington's personal financial statement prepared on the Valley National Bank form.

On May 29, 1987, nine days after he had jotted his strategy, Dai-Ichi lent Symington's Esplanade partnerships $77 million.

Coopers & Lybrand prepared its first compilation letter for Symington when he submitted a year-end financial statement for December 31, 1987, to Dai-Ichi to show he was maintaining a $4 million net worth as required by terms of the loan.

The compilation letter made it clear that Coopers & Lybrand had not conducted an audit of Symington's finances but merely had reviewed his methodology in preparing his December 31, 1987, financial statement to see if it was consistent with previous statements.

Symington submitted year-end personal financial statements and compilation letters from Coopers & Lybrand to Dai-Ichi for 1988 and 1989 showing net worth of $10.8 million and $11.9 million, respectively.

But Symington did not provide Dai-Ichi with his December 31, 1990, or 1991 financial statements until the bank requested the information in May 1992; Coopers & Lybrand did not prepare compilation letters for those year-end statements.

Symington did, however, prepare 1990 and '91 year-end financial statements for other lenders. One of Symington's December 31, 1990, statements reported a net worth of negative $4.1 million--another reported a positive net worth of $5.4 million. By December 31, 1991, Symington reported a net worth of negative $22.6 million.

Prosecutor Schindler introduced Symington's handwritten notes during his redirect examination of Riebel. Schindler had Riebel read from about a dozen other memos in which Symington expressed a desire to sell numerous real estate projects that were losing money.

Symington's notes belie his claims that his real estate investment strategy was to hold properties for long periods. Instead, his notes indicate that Symington was attempting to shed losing real estate projects while maintaining their inflated values on his financial statement so he could get loans to develop ever larger and more expensive projects.

Symington's purported strategy of holding properties for the long haul is central to his claimed values of his holdings, which propped up his claimed net worth. In depositions, Symington said he determined the value of his real estate projects by the prices he hoped to get when he eventually sold them.

Yet his own notes now suggest he had no intention of holding properties for the long run and instead was desperate to sell ailing properties.

Symington's notes also provide a glimpse into Symington's evolving political interests. Scattered through the memos are several references to John McCain, who was member of the U.S. House of Representatives for four years before winning election to the U.S. Senate in 1986.

McCain has long been one of Symington's staunchest supporters. The two men share many of the same legal and campaign advisers, including Dowd, who represented McCain during the Senate Ethics Committee hearings on McCain's relationship with Charles H Keating Jr.

In one of Symington's undated "To Do List" memos that appears to have been prepared in 1986, McCain's name appears under the second listing where Symington simply writes:

"Checks to John McCain.

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