Sugar Mommy

Martha Symington's lawyer tells jury of governor's profligacy

Thomas Washburne has spent the past decade dealing with Governor J. Fife Symington III's insatiable appetite for spending other people's money. No wonder Washburne suffers from high blood pressure.

He has been the Symington family lawyer for 20 years. Most of that time, he helped manage Martha Symington's fortune from his Baltimore law office. Martha Symington, who died November 26, was the governor's mother.

Last Tuesday, July 1, Washburne found himself on the witness stand in Fife Symington's criminal trial. The testimony was just another in a series of irritations the governor has foisted on Washburne.

Yet despite his frail health, the elderly Washburne appeared to enjoy testifying. He joked with court clerks, smiled broadly, cracked one-liners and answered questions with flair and style.

Washburne's frank testimony seemed to lift the proceeding out of the realm of a complex criminal case and lighten it, making it seem like a hearing for a juvenile delinquent. Though Washburne may not want to see Fife Symington in prison, he seemed to relish the opportunity to crack the whip over his former client's wayward son.

Washburne's testimony portrayed Fife Symington as a man bereft of fiscal discipline who relied on his mother to bail him out of one mess after another.

In the span of 42 months, Fife Symington hit up his mother for $2.3 million in loans. Washburne drew up promissory notes for 32 loans between April 1989 and September 1992. He testified that Martha Symington expected her son to repay the loans within three years. He didn't.

The first loan, of $300,000, came on April 21, 1989, the same week Symington announced his run for governor. Martha Symington included a provision restricting her son from using any of the money on his campaign.

Martha Symington borrowed the money she lent to her son from Mellon Bank, posting 14,000 shares of Exxon stock as collateral. Fife Symington was supposed to repay the interest on the loan directly to Mellon Bank.

"Did you believe this to be a bona fide loan to Mr. Symington that he was expected to repay?" assistant U.S. attorney George Cardona asked Washburne.

"I believed that to be a bona fide loan and expected that it would--she expected it would be repaid," Washburne replied.

The loan was among several Fife Symington failed to list on personal financial statements submitted to lenders in 1990. In addition to the $2.3 million in loans, Fife Symington convinced his mother to guarantee another $810,000 in loans he obtained from other lenders. She also agreed to put up $150,000 cash and sign a $350,000 promissory note to get Symington's former Esplanade business partner, Jerome Hirsch, "off your back," as Washburne stated in a September 1992 letter to Fife Symington.

The grand total Fife Symington extracted from his mother in a 39-month span, including 18 months as governor: $3,568,592.24.

Fife Symington managed to pay Mellon Bank the interest on the first $300,000 loan until July 1992. But then he defaulted, forcing his mother to cover the interest payments.

His inability to pay interest forced Washburne and Martha Symington to devise a new tax strategy to protect her estate in case the Internal Revenue Service ruled the loans to her son were, in fact, gifts. Martha Symington sold the loans to Fife Symington's wife, Ann, for a nominal fee. Ann Symington then forgave the loans to her husband. The move kept Fife Symington from having to pay tax on what amounted to income, not loans.

By September 1992, Martha Symington and her attorney were weary of Fife Symington's sponging, and they realized he might never repay her.

"This is a level of debt that I know you are not happy about, your mother is not happy about, and I am not happy about," Washburne wrote to Fife Symington on September 18, 1992. ". . . Your mother simply cannot continue these advances."

Washburne's letter identified the root of Symington's financial problems: "A review of the material you recently sent in seems to indicate annual living expenses in the neighborhood $500-600,000 with an annual income for you and Ann, for all sources, of about $300,000."

The letter expressed Washburne's reluctance to "make another expensive trip to Phoenix to meet with financial advisers, accountants and the like."

Instead, Washburne urged Fife Symington to "take drastic action." In a twist of irony, he also suggested that the governor take a dose of the medicine he was inflicting on state employees through his government cost-cutting program, Project SLIM.

"I do not know if you can slash your living expenses in half, but some kind of 'Project Slim' for the family is clearly in order," Washburne jabbed.

Martha Symington would not be bailing out her son--at least for a while.
But her death restarted the gravy train, transferring trusts worth tens of millions of dollars from Martha Symington to Governor Symington.

The new trusts are off-limits to Symington's creditors in U.S. Bankruptcy Court, where Symington claims $25 million in debts and $69,000 in assets. The trusts are exempt because Martha Symington died more than six months after her son filed for bankruptcy in September 1995.

The result: Arizona's bankrupt governor is (and will remain even if convicted at his criminal trial) a multimillionaire.

Washburne's testimony clearly embarrassed the governor. It struck at the heart of Symington's public persona and exposed much of his political rhetoric as hypocritical.

1
 
2
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Loading...