By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
The governor turned to his family, and his wife and two eldest sons came close. The four stood in a tight circle behind the table where the governor sat as a defendant throughout a historic and an epic criminal trial.
His wife, Ann, who throughout the trial had remained composed, bore a contorted and puffy face.
Moments earlier, 12 jurors had been selected from the panel of 16 that heard testimony from 40 witnesses and saw more than 1,300 exhibits during Symington's 12-week trial.
The jurors filed from Judge Roger B. Strand's courtroom on the third floor of the U.S. District Courthouse and entered the jury room at 3:15 p.m. on Friday, August 8. There, they will deliberate five days a week, eight hours a day, until they reach verdicts on 19 counts of bank fraud, one count of perjury and one count of attempted extortion.
Before recessing to deliberate, the jury heard closing arguments from prosecutors and the defense. Harsh words like "con man" and "liar" cut deeply into Symington and his family.
If the jury agrees, Symington will lose his title and probably go to prison.
Closing arguments are not evidence to be weighed by the jury, but they do provide both sides the opportunity to draw conclusions that jurors might not otherwise consider. They provide an opportunity for the attorneys to make bold assertions of guilt or innocence.
The style and content of closing arguments usually reflect the substance and strength of a case. The Symington case was no exception.
Assistant prosecutor George Cardona initiated the final phase of the trial with a methodical reexamination of the key evidence. Cardona's undergraduate training in physics was apparent as he assembled blocks of evidence into a thick-walled fortress surrounding Symington.
Defense attorney John Dowd followed with an emotional, five-hour oration filled with theatrics worthy of a televangelist. Dowd's fiery performance moved the governor to tears and appeared to poke escape holes in the fortress walls.
But since the government has the burden of proving guilt, it also gets the last word. Prosecutor David Schindler doused Dowd's melodramatics by telling the jury to simply focus on the evidence. In the end, Schindler used Symington's own words against him.
The prosecution did not want to leave the jury with the image John Dowd attempted to create--of an irresponsible federal government engaged in a witch hunt to destroy a governor who has made bashing the feds a pastime.
Instead, prosecutors strove to present their voluminous evidence in a polite, dispassionate manner, to a jury selected from one of the nation's most politically conservative populations.
Keeping with the government's low-key approach, it was fitting that George Cardona delivered its closing argument. Cardona's demeanor and appearance are anything but threatening.
But behind the horn-rimmed glasses lies an encyclopedic mind immersed in the minutia of Fife Symington's business. He knows it like a sports junkie knows batting averages.
Ferreting out fraud is child's play compared to mastering physics, Cardona's major during undergraduate school at Yale. Understanding how forces interact over time is essential to physics--and also to the crimes Symington is accused of committing.
Cardona urged jurors to carefully consider who had said what, and when they had said it.
Symington, Cardona said, intentionally overstated his net worth when he submitted personal financial statements to lenders to obtain loans. Symington needed the loans to build the commercial projects that enabled him to collect millions of dollars in development and management fees. Once the buildings were completed, however, rents rarely covered the loan payments.
For a time, Symington attempted to make up the shortfall, investing hundreds of thousands of dollars into the projects. But when the real estate market began to unwind in the late 1980s, Symington's meager cash reserves were quickly depleted.
Rather than personally covering the shortfalls as Symington had guaranteed when his partnerships obtained the loans, Symington began giving some of his lenders dramatically weaker, although more realistic, financial statements. He hoped the bleak picture would convince lenders to release him from repayment obligations.
But during this crucial period in 1990 and 1991, Symington did not give consistent financial statements. At the same time he told First Interstate Bank during negotiations over a failing real estate project that his net worth was negative $4 million, Symington told Valley National Bank during discussions to renew more than $1 million in unsecured loans that his net worth was $5.4 million.
"It's important when you look at the statements to consider the time at which they were made and the purpose for which they were made," Cardona said.
Throughout the trial, the defense has admitted that errors appeared on the financial statements, but claims they were unintentional. Symington testified that he prepared the financial statements from memory and paid little attention to them because his lenders were only concerned about the real estate projects to be developed, not his net worth.
Cardona urged the jury to reject the excuse.
"One mistake, two mistakes, three mistakes, fine, you forgot," Cardona said. "But when you look at these financial statements, it's not one, two, three mistakes. It is 20, 30, 40 false entries."
And these errors, Cardona said, were not committed by some greenhorn who didn't understand financial statements, lending or real estate practices.
"This is a highly educated man who is highly intelligent," Cardona said before rattling off a synopsis of Symington's resume, including his Harvard education, head of The Symington Company for 10 years and a former director of Southwest Savings & Loan and American Savings & Loan.
"He is not the type of person who simply forgets," Cardona said.
Cardona insisted that Symington knew precisely what he was doing when he gave inflated net worths to lenders to get loans and then provided more detailed, negative information when it was time to repay. He knew this, Cardona said, because Symington was once a banker.
"Mr. Symington knows how to negotiate with banks. He knows how to threaten bankruptcy," Cardona said. "He knows how to get attorneys. He knows how to go to them and say, 'Look, I've got you over the table right now, so let me out of my guarantee.'"
When it was time to get out of guarantees, Symington was more than willing to provide lenders more accurate financial information.
"In fact, he wants to because he wants to convince them I can't repay, so give up, settle with me, don't come after me on my guarantees," Cardona told the jury.
Cardona meticulously reviewed each of the 21 counts, explaining why Symington is guilty of each and where to find the evidence. In doing so, Cardona focused on the central theme of the case: Symington lied on his financial statements, he lied to lenders, he lied to his accountants and, most important, he lied to jurors.
Rather than telling the truth, Cardona said, Symington sculpted his testimony to fit excuses defense attorney John Dowd had presented in opening arguments.
Cardona pointed to three counts accusing Symington of falsely certifying to Dai-Ichi Kangyo Bank that his net worth exceeded $4 million when Symington knew his net worth was negative $23 million. The certification allowed Symington to make draws from DKB to construct the Camelback Esplanade.
In opening arguments, Dowd claimed that Symington signed the draw requests because he wanted to make sure subcontractors were paid and that DKB received interest payments that were built into the loan.
"Mr. Symington basically parroted that theme and volunteered it every time he was given an opportunity," Cardona said.
The reality, Cardona said, was that Symington didn't want DKB to declare him in default on his largest, most visible real estate project.
Cardona gave the jury other examples of Symington lying on the stand, including claims that no lenders ever confronted him about his false financial statements (two had done so) and Symington's bizarre explanation of how he used "future values" to determine his share of the real estate projects.
"He told you what he thought he needed to tell you to try and get you to do what he wants [you] to do," Cardona said.
"Don't be fooled."
The defense needed far more than facts to crack the government's case. It needed to change the meaning of the facts already presented.
It was a job perfectly suited for John Dowd. For 12 weeks, Dowd slogged through the trial, frequently appearing befuddled by the profusion of exhibits and repeatedly asking prosecutors for assistance in identifying key documents. His examinations of witnesses often wandered aimlessly.
Dowd's expertise lies in negotiation. He was initially hired by Symington to derail the federal criminal investigation that began in late 1991. Although Dowd failed to stave off an indictment, he helped delay the action several years.
Closing arguments offered Dowd the opportunity to shift the jury's collective consciousness. To do so, he needed not only to penetrate their minds, but climb into their hearts and souls.
He needed to preach.
A large man with a streetwise Eastern accent and deep emotional well, Dowd understood the importance of keeping the jury's attention during his five-hour summation.
One moment his voice thundered across the courtroom, his arms thrusting to make a point. Later came the soft sell, as Dowd whispered lines from his prepared script as he moved close to the jury. At one point, Symington wiped tears from his eyes, and Dowd's voice choked as he concluded his comments.
By the end of the day, Dowd had employed every theatrical technique short of getting down on one knee and cuing the violins.
It was a powerful performance that convinced some courtroom observers and journalists that Symington would be acquitted on all 21 counts.
Dowd launched his statement by claiming that his client was the victim of a Romanesque persecution.
The government, Dowd said, scoured Symington's financial life, looking for anything that could be used to paint an evil picture while ignoring the collapse of the commercial real estate market in the late 1980s.
"Only the government would use another man's misfortune caused by market forces to build a case against them," Dowd said.
And the government agents are liars, Dowd said.
The prosecutors, Dowd told the jury, are ignoring facts simply to convict an honest man.
Cardona, Dowd said, is "doing precisely what he's accusing Mr. Symington of doing, omitting material facts from his case to give you a distorted picture."
Not only is Governor Symington a victim of the government, Dowd said, he also had inept accountants. Coopers & Lybrand, Dowd argued, approved Symington's financial statements in 1987, 1988 and 1989 even though they were filled with errors.
"It is absolutely uncontradicted in this case that Coopers had every single piece of financial information about John Fife Symington III that you could have," Dowd said. "The government says Coopers & Lybrand had no duty to serve their client. But an accounting firm which has been paid over a million dollars clearly has such a duty."
After portraying Symington as a victim, Dowd tried to polish Symington's image, saying he was an "incurable optimist with no quit in his blood"--and all his lenders understood that.
And he was honest, never taking a dime that was undeserved.
"Dishonest men do not bring $120 million projects in on time under budget and lien-free with no money missing," Dowd said.
But he also was human. Sure, Dowd said, Symington made mistakes on his financial statements. But who wouldn't? After all, Dowd said, valuing commercial real estate is such a tricky business that it is impossible to guarantee the accuracy of the valuation.
Dowd argued that Symington simply estimated the value of his real estate projects and his future share in them. Furthermore, Dowd said, no one cared about the financial statements.
The proof? When Symington hired Coopers & Lybrand in 1991 to prepare a detailed review of his personal finances, none of Symington's lenders was upset when it learned of his $35 million decline in net worth, Dowd claimed.
"He provided all the financial information the lenders wanted," Dowd said. "And lo and behold, the information reveals his bad memory, his lack of attention, his unbridled optimism in his own projects, his errors, his mistakes, his oversights, his undersights, every wart you can imagine.
"The lenders take it all in and work it out. They don't kick him when he's down. They don't pick over the carcass. They don't grill him about every entry on every financial statement. Why? Because they did not judge him by his statement. They judged him by his performance."
Dowd blasted the government for asking why Symington had no notes confirming conversations in which his mother told him not to worry about repaying millions of dollars.
"Can you imagine? Is this what we are coming to in this country?" Dowd asked. "Do you have to take notes when you talk to your mother? That shows how desperate they are."
The oration continued for hours, as Dowd skimmed through each of the charges, telling the jury Symington is innocent. Occasionally, Dowd would raise the specter of evil forces--his favorite being former Symington business partner Jerry Hirsch--bent on ruining Symington.
Dowd made Hirsch out to be a greedy man who "tortured" Symington for millions of dollars to buy out his share in the Camelback Esplanade and then was too afraid to appear in court, sending his lawyer instead.
Apparently, Dowd believed demonizing Hirsch was necessary to weaken evidence showing that Symington owed Hirsch far more money than Symington was reporting on his financial statements.
After blasting the motives and intentions of others, Dowd urged the jury to believe that Symington always acted in "an honest and good-faith basis," especially when he estimated real estate values on his financial statements.
"As the court will instruct you, his good faith is a complete defense to these charges," Dowd said.
Dowd concludes, "The government ridicules his belief and accuses him of a crime because he stood by his belief in his real estate values. There is no crime."
At least one member of the jury appeared to accept Dowd's argument. The juror, a middle-aged man with short hair and glasses, nodded when Dowd asked for the governor's acquittal on four counts related to DKB.
David Schindler leaned back in his courtroom chair, legal pad on his lap, his right hand under his chin.
He watched as John Dowd concluded his emotional arguments.
Schindler was honing his counterattack. Late on Thursday, August 7, he got the chance to launch it.
"I am not going to rant and rave," Schindler told the jury. "I'm not going to scream at you. I'm not going to yell. I'm not going to wave my hands. I'm not going to point my finger. I'm not going to move my glasses. I'm not going to jump up and down, because I don't need to, ladies and gentlemen," Shindler said.
"The evidence is there."
In an instant, the former University of California psychology major deflated what Dowd had spent the entire day constructing. And then Schindler asked the jury a simple question.
"Do we all have to play by the same set of rules?"
Schindler told the jury that "real estate developers" and "governor[s]" don't have their own standards.
"You need to say that it's time for the lies, the deception, the double-speak, the theatrics, for all of that to stop," Schindler said.
Schindler told jurors that the government has given them the opportunity to sit in judgment of a person who is at the heart of America's financial system and who intimately understands its inner workings.
Symington, Schindler said, deceived lenders who were in awe of his heritage and ties to East Coast wealth. The lenders believed Symington was a "good guy" who somehow managed to stay afloat while other developers fell by the wayside in the late 1980s.
"He deceived them the same way that he's tried to deceive you during this trial," Schindler said.
Under Symington's methodology of determining wealth, one could value $2,000 in stocks at $200,000 because of a hope that the value will increase to that amount in the year 2004, Schindler said.
"You don't get to do that, and you would never in your wildest dreams think about doing that," Schindler said.
"But that's exactly what, cleared of all of these mirrors and smoke and histrionics and screaming and yelling, that's what Mr. Dowd and Mr. [Terry] Lynam and Mr. Symington want you to think is okay."
Schindler scoffed at Dowd's assertion that Symington's financial statements didn't matter to lenders. Schindler reminded jurors that every banker who testified said that the loans would not have been made without Symington's personal financial statements.
Furthermore, he said, Symington knew his financial statements were important. He asked jurors to review more than 70 pages of Symington's handwritten notes, including several in which Symington writes of his need to supply the statements to lenders.
Schindler also attacked Symington's pat excuse that the errors and omissions on the financial statements were simply "unintentional mistakes."
"When confronted with the documents that showed he was lying, what could he say?" Schindler asked.
The prosecutor urged the jury to be wary of Symington's effort to blame Coopers & Lybrand for the multitude of errors on his financial statements. Schindler presented sworn testimony Symington gave in May 1996 where Symington said Coopers & Lybrand's role was simply to review the "methodology" he used to prepare his statements, not to establish values.
Schindler undermined Symington's contention that he intended to hold his buildings for long periods to earn bonuses built into the partnership agreements if he sold the property for substantial profit. Once again, Schindler told the jury to examine Symington's notes, which show he wanted to sell most of his properties during the real estate downturn.
The notes are "really a rich source of evidence for you to look at to get inside of what Mr. Symington was thinking at the time and not what he was testifying to here in the trial," Schindler said.
Symington's trial testimony, Schindler said, was riddled with inconsistencies.
Symington repeatedly testified that he determined the value of his share in real estate projects by selecting a future value he "hoped" the project would attain. This methodology led Symington to claim his value in the Scottsdale Centre was $1 million when partnership records showed his stake was some $26,000.
Absurd as the notion is, Symington stuck to the future-value rationale throughout the trial, except in one notable instance. During his cross-examination, Schindler introduced Symington Company files that showed the amount of money Symington owed to Jerry Hirsch was increasing because unpaid interest was accruing to the principal.
The October 1987 Symington Company file projected that Symington would owe Hirsch $5.3 million when the note came due in 1997. But for years thereafter, Symington only showed $3.9 million due on his financial statements. Schindler reminded the jury that he had asked Symington why he placed the lower debt on his statement.
"And what did he say to us? His answer was, 'You know what, Mr. Schindler, it's just impossible to predict into the future. That's why I put down $3.9 million.'"
Schindler told the jurors Symington's acknowledgments undermined a central plank of his defense.
"Isn't it just convenient that when it comes to reporting your liabilities, like the Hirsch note negative amortization, it's just too hard to predict in the future? But, boy, when it comes time to doing your assets, well, you pick your date in the future and that's okay."
Which left only one remaining question. Why did Symington commit crimes?
Schindler offered two reasons. The first was money.
But, Schindler said, that is of secondary importance. The primary reason, Schindler told jurors, was Symington's appetite for prestige and power.
"Ladies and gentlemen, he parlayed that illusion of being a successful real estate developer into the job he holds today, governor.