By Stephen Lemons
By Weston Phippen
By New Times Staff
By Stephen Lemons
By Kathleen Vanesian
By Stephen Lemons
By New Times Staff
By Stephen Lemons
Riebel poleaxed court observers by claiming the governor's crooked financial statements were partly the result of her typing errors. She added that her word processor caused the banking fraud.
Riebel claimed that when Symington wanted seven-figure loans, he inadvertently told the banks he was rich when, in fact, he was bankrupt, because of computer error.
Clearly, a certain sort of secretary never loses the taste for running with the big dogs.
Years ago, President Richard Nixon's infamous Ms. Woods demonstrated how she accidentally erased 18 minutes of a critical Watergate tape. Woods' contortions were so extreme as she stretched toward the erase button that it looked like chiropractors would need hours to straighten out her spine.
I had much the same queasy reaction to Riebel's dodge that poor typing was at the root of the governor's 22-count federal indictment.
And so did everyone else in the gallery.
When Riebel laid off the governor's multimillion-dollar banking corruption on poor clerical skills, spectators in the courtroom shot incredulous glances at one another.
You see, Joyce Riebel isn't some bumbling Kelly girl. For years she worked for men who bled Arizona's banks dry with their big-buck hustles.
Bollenbach was chairman and chief financial officer of Southwest Savings & Loan. He rode the S&L into the ground, and the collapse cost taxpayers nearly a billion dollars, triggered a federal probe, criminal referrals and a nasty lawsuit. Riebel had a ringside seat for the entire debacle. And Symington sat on Southwest's board with Bollenbach. The S&L's biggest investment, and its heaviest millstone, was Symington's cost-plus Esplanade high-rise.
Far from being a mere clerk, Joyce Riebel, and only Joyce Riebel, helped Fife Symington fill out bogus financial statements for development loans. She spent 12 years aiding and abetting one of Arizona's great con men.
When Symington was indicted, Riebel's loyalty and skills were so highly valued that Bollenbach, who now runs the Hilton hotel chain, hired her back.
Riebel, for example, admitted that even after the accountants corrected erroneous data, she and Symington kept three different versions of the same financial statement. Only one reflected the truth that his developments were in the toilet.
To avoid loan payments, Symington sent Dai-Ichi Kangyo Bank bad numbers while stateside banks got rosy financials for the same time period so that the governor could continue to borrow.
The deception was cold-blooded and calculated.
Symington's net worth swung by millions of dollars. When he wanted to borrow money, he forgot to include seven-figure debts and obligations while his percentage of ownership in developments mushroomed magically. Not content with lying about how much of the building he owned, Symington also grossly inflated the value of the building itself.
Helen Keller couldn't have made those kinds of typing errors.
If they had not figured it out for themselves, the jurors learned that a secretary willing to participate in lies to bankers was certainly capable of lying under oath.
Schindler forced Riebel to confess that she'd misled the grand jury that handed up the indictment when she claimed she couldn't recall who tampered with sensitive files. In fact, it was Riebel herself, and accountant John Yeoman, who scribbled on the paperwork.
Pausing to collect herself, she alibied that she was afraid that if she was truthful with the grand jury, she might have violated Symington's attorney-client privilege.
Her explanation was a crock: She was not an attorney. She was not a client. She had no privilege.
Riebel's testimony devastated Symington.
After the disingenuous Riebel, the prosecution called the painfully straightforward Noel Thompson, a Citicorp executive who oversaw a $10.6 million loan to Symington.
A cornerstone of the governor's defense is the insistence of his attorney, John Dowd, that banks pay no attention to financial statements. Dowd portrays financial statements as annoying paperwork only required by picayune federal bureaucrats.
Of course Thompson testified that Symington's phony financial statements were a critical part of the bank's decision to lend money. You'd expect a banker to say that.
But jurors got to see Symington's financial statement enlarged on their computer screens. They saw that these particular financials were pored over by bank officers who filled the statement's margins with handwritten figures, notations and projections based upon data Symington supplied.
These financial statements weren't just slapped away in a file.
When Thompson and his staff at Citicorp were finished with Symington's financial statement, the paperwork was kicked upstairs to Thompson's regional boss, Michael Nobbs, and to Nobbs' boss, John Pipia.
Far from being irrelevant, the financial statement prompted Pipia to insist that as a condition of the loan, Symington must agree to maintain $500,000 in readily available cash.
Pipia's caution demonstrated just how far Symington would go to break the law.
Thompson testified that Symington proposed satisfying Citicorp's concern by offering to pledge his Mellon Bank trust fund, which, according to the governor, was worth more than a half-million dollars and contained stocks such as IBM and Du Pont. Symington had already identified these securities in his financial statement as "readily marketable."
Which was a lie. Symington was paid interest, or dividends, from the stocks, but under the terms of the trust, he can never sell them for their principal. Nor is he allowed to pledge them as collateral.
Symington lied when he listed the trust as a half-million dollars of readily marketable securities. He compounded the fraud when he proposed to satisfy Citicorp's loan conditions with the Mellon trust.
And under the terms of the $10.6 million loan to Symington, the governor sent a statement to Citicorp every three months demonstrating that his "readily marketable trust" was still worth more than $500,000.
Each of these quarterly statements was a fraud.
Dowd did not defend his client.
Instead, he put the banker on trial.
Dowd repeatedly attacked Thompson because the Citicorp executive had not personally contacted Mellon Bank to ask about the details of Symington's trust.
From Dowd's point of view, Thompson should have learned that Symington was a liar.
But Thompson was too dazzled with Symington's relatives to smell a thief; the banker literally gushed from the witness stand that, after all, the governor was a Maryland blue blood. In an eye-opening section of his report to his superiors, Thompson enthused that Symington's ancestors had run blockades for the Confederacy.
But the banker is not on trial. Thompson relied upon Symington to tell the truth about his trusts. The governor was required to do so by the law.
On June 21, 1990, the law firm representing Mellon Bank wrote to Fife Symington and pointedly warned the governor that his trust was not readily marketable and that the governor was not allowed to pledge the trust's assets.
Symington continued to send out quarterly statements to Citicorp pledging the trust as readily marketable.
And Joyce Riebel did her part to create an 18-minute gap in the record.
When paperwork surfaced with the names of the people who administered the Mellon Bank trusts, Riebel used White-Out to hide their identity, just in case Noel Thompson or some other lender got nosy.
Even aristocrats need loyal handmaidens.