By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
By Pete Kotz
By Monica Alonzo
By New Times
J. Fife Symington III, our former governor, plopped about his yacht in the Pacific Ocean last August. He explained to former colleagues that he was about to double-cross them. Nuzzled by the harbor breezes in Santa Barbara and far from Arizona's maddening summer sun, Symington outlined how his consulting firm would oppose Proposition 400 despite previous assurances that he would stay out of the election.
Symington's timing for a second political debut was serendipitous: That very month, attorney Michael Manning was in court trying to recover the millions of dollars Symington swindled from local pension funds in 1990, part of a larger pattern of financial fraud that led to the governor's indictment in 1996. Although Manning has collected nearly $30 million in judgments, the retired carpenters, laborers and truck drivers he represents have not seen a dime. Fife and his corrupt bankers have fought, lied, obfuscated, delayed and stonewalled for 15 years. Symington and his bankers have paid no one.
This month Fife Symington took the next step in his political chrysalis: He announced that he is considering running, once more, for governor. He was on the cover of the morning newspaper twice, and within the editorial pages the normally stable Robert Robb gushed over Symington's "bracing agenda" under the headline: "Fife Could Drum Up a Fight for Napolitano."
Last Sunday's Viewpoints section of the Arizona Republic displayed a mortifying deluge of Symington detritus from five political observers, an attorney, an editorial page columnist, and the ex-governor himself. Never mind Fife's self-serving squeals; the others all regarded his candidacy as if he were one more legitimate horse in the race to run the state. This is brain vomit passing as commentary.
Look, if you are a larcenous greaseball -- and Symington is -- your polling numbers or your position on abortion are irrelevant. Swindlers are not allowed to govern.
Elected in 1991, Symington was sentenced in 1998 to 30 months in prison for bank and wire fraud. One year later, the 9th U.S. Circuit Court of Appeals overturned the conviction, finding that one juror had been improperly removed before the verdict. As federal prosecutors moved to retry feckless Fife, President Bill Clinton, in one of his last -- and lamest -- acts, pardoned Symington.
Although Clinton's Übermensch Vernon Jordan was a senior partner in the law firm that defended Symington against the Department of Justice, we have been told that the actual reason Clinton forgave our governor was because Fife saved the president from drowning when both of them were at the same beach as young men.
Today, Symington's varnished version of his criminal odyssey is that he is a victim.
I could just slap him.
He alleges that he was politically targeted by federal prosecutors. In any case, claims Symington, the federal conviction applied to his real estate development portfolio prior to his election to the governor's office in 1991.
This is a critical point: Symington told the press his troubles preceded his two terms in office and that as governor he was an exemplar of conservative reforms.
Fife's posture is that of a sociopath.
In fact, Fife Symington's history of fraud is a monument to rapacious greed that soaked investors, bankers, relatives, friends and the citizens of Arizona. And, once he assumed office, he brought the same sleazy tactics to the top of state government in Arizona.
His very first foray into branding his administration involved multimillion-dollar bid-rigging that rewarded those who got him elected as well as those who helped him perpetrate banking fraud.
Project SLIM, described by then-governor Symington as the keystone of his administration, was a cost-cutting program to trim the size and expense of state government.
Project SLIM was, less conveniently, the largest white-collar fraud ever perpetrated on the state. Two multimillion-dollar contracts to streamline state government offered the typical Symington mix: They appealed to conservative instincts, and they were executed with a winking corruption that benefited insiders and crooks.
The insidious aspect of the looting of the public treasury embodied in the Project SLIM scandal was that the depravity spread like an Asian bird virus that jumped species. Before long, other arms of government were exhibiting spots.
When evidence of bid-rigging in Project SLIM first surfaced, Symington moved quickly to have a political ally, County Attorney Richard Romley, investigate. The governor also attempted to cripple a second prosecutor who was actually getting to the bottom of this sordid mess, Attorney General Grant Woods. Symington urged the Legislature to strip the attorney general of his entire civil division, which, coincidentally, employed the very prosecutors investigating the greased skids in Project SLIM.
After four months, Romley announced he could find no evidence of wrongdoing. This was a finding more notable for its sheer gall than legal acumen.
George Leckie, Symington's deputy chief of staff, ran the search for the accounting firm that would head Project SLIM. After each search meeting, records possessed by the county attorney showed that Leckie phoned John Yeoman.
Yeoman, a partner in the Big Six accounting firm Coopers and Lybrand, was the governor's campaign treasurer. Yeoman also prepared Symington's tax returns and financial statements.
Coopers and Lybrand was one of the bidders on the Project SLIM contract.
Competitors feared that Leckie was leaking bid information to Yeoman.
But Leckie and Yeoman maintained that the phone calls had nothing to do with Project SLIM, despite the suspicious timing.
After submitting bids, all of the competitors were invited back to resubmit a second bid. Coopers dropped its final bid an astonishing $440,000 to become the lowest bidder where previously it had been the most expensive.
The county attorney said that despite having more evidence than the circumstantial phone records, he could find nothing to complain about legally.
George Blanco, an accountant at Coopers, had informed the county attorney that Coopers was slashing its second bid by hundreds of thousands of dollars days before it was officially informed that the state would ask for a second bid.
More damning, Ron Vincellette, a manager at Coopers, told the county attorney his fellow accountants had the numbers of their competitors' first bids, thanks to Yeoman.
"Yeoman had told [Joe Bonocore, a Coopers manager] who was on the short list and what the prices were," said Vincellette. "We just talked about the fact that we had to be very careful about the information. And I remember everybody being warned [to] make sure that nothing ever got out of that room. Because we weren't supposed to be getting that information."
Attorney General Woods' office refused to close its probe. It tracked down Yeoman's secretary, Marge Kendall.
"[Coopers and Lybrand] knew the numbers," said Kendall. "The discussions would be, this one came in at this level at this dollar amount. They kept a running tab. They knew. They would write it down and keep track. . . . They were not worried. . . . All they had to do was sit back and hear the numbers and just come in close to, or beat, the other numbers."
Then the attorney general uncovered a critical piece of evidence.
On September 6, 1991, the competing accounting firms had been notified that they could submit a second bid. The prosecutors, however, found a Coopers and Lybrand spreadsheet with its bid lowered by $440,000 dated September 4, a full two days before the announcement. Clearly, the firm had inside information.
"'Holy shit, the smoking gun!' is what I thought at the time. I'll never forget it," said Suzanne Dallimore, then an assistant AG.
Not long after it won the crooked Project SLIM contract, Coopers and Lybrand submitted a change order for $437,000, neatly recouping all of the funds it had slashed off its initial bid. Leckie approved the change order and instructed state personnel to process the payment two weeks before the accounting firm formally submitted the request for additional funding.
But this was not the end of the sleaze.
After winning the corrupt contract, state records show, Coopers and Lybrand slashed Symington's personal accounting bill by six figures.
Because of Attorney General Woods' perseverance, Coopers and Lybrand together with George Leckie paid $800,000 in fines, and both parties were forced to agree they would not participate in future state contracts.
The union pensioners represented by Michael Manning were not the only retirees fleeced by Symington. Furthermore, once in office, Symington took steps to make state pension funds accessible to other investors of his ilk.
In 1991, after being elected, Governor Symington defaulted on a nearly $1 million loan from the state retirement system that he had personally guaranteed.
Such disgraceful behavior did not shame Symington whatsoever. Instead, he used his appointment powers to expose the savings of the elderly to other developers who found more traditional sources of loans, such as banks, too irksome.
Like with Project SLIM, Governor Symington's thoughts about state pension funds combined a conservative agenda -- opening up retirees' savings to private entrepreneurs -- with a felon's fondness for easily accessible pools of cash.
As governor, Symington appointed a well-known Republican fund raiser to the multibillion-dollar board of the Arizona State Retirement System. John Stiteler immediately pressured other board members to increase investments in risky ways, to turn the pension funds over to real estate speculators like, well, like Symington.
"Stiteler lacks fiduciary temperament," Ron Pelton said at the time. A former chairman of the board, Pelton resigned once Stiteler announced his intention to increase speculative investments. Previously, the pension fund had operated with limits of no more than 1 percent of its $10.5 billion set aside for investment into economic development because of the inherent risks. The vast majority of the fund found its way into conservative bonds.
George Leckie, the governor's deputy chief of staff and campaign finance chair, said he helped get Stiteler appointed, in part, because Stiteler raised money for Symington.
Stiteler was a curious choice for this appointment. His background included six bankruptcies of commercial ventures, state and federal tax liens, a six-figure judgment against him from a failed New Mexico thrift, and a $15 million federal lawsuit filed against him and six other former officers and directors of the collapsed Century Bank. While on the board of Century, Stiteler borrowed but did not repay $500,000 from the bank, the government said. He sought dismissal of the suit on a statute-of-limitations technicality. Eventually, all of the directors paid a stipend to settle the suit with the feds.
Publicity on Stiteler's background forced his resignation from the state board.
Fife Symington ran for the governor's office by pitching himself as a successful real estate developer when, in fact, he was a brassy con artist.
He inflated the value of his projects, lied about income, grossly exaggerated his equity in numerous developments, and hid millions in debt when negotiating with lenders.
His secretary of 11 years, Joyce Riebel, admitted that she and Symington kept different financial statements for the same dates. For example, a December '88 statement listed Symington as guarantor on a $4 million loan. Another statement from the same time period omitted this obligation. If Symington was trying to avoid payment, his statement indicated acute financial stress. If Symington was trying to borrow, his statement looked glowing.
Federal prosecutors documented, and Joyce Riebel corroborated, that Symington submitted two varying financial statements to two different banks on April 1, 1986; three different statements to three different banks on December 31, 1987; two distinct statements on December 31, 1988; another four diverse statements on December 31, 1989; and yet another two conflicting financial statements on December 31, 1990. The fraud was so repetitive that Riebel said the governor kept his paperwork coded and filed so that he could track his lies.
In the end, Symington would tank 13 separate real estate projects that stuck the banks with millions in bad loans -- millions taxpayers had to eat.
Not surprisingly, the governor was eventually indicted. The original criminal referral to the Justice Department focused on Symington's role in the collapse of Southwest Savings and Loan. Symington's Esplanade project on 24th Street and Camelback was Southwest's single largest loss. The Resolution Trust Corporation sued Symington and fellow directors for $197 million and said Fife personally "reaped millions of dollars in unwarranted revenue." He was also charged with violating federal conflict-of-interest regulations. The collapse of the S&L cost taxpayers nearly one billion dollars.
But the prosecution did not occur until 1996, during Symington's second term in office. By then, he'd already declared bankruptcy, claiming he'd gone from a net worth of $12 million to a negative $24 million.
The way he handled the $10 million debt to Arizona's retired construction workers is an illuminating example of how Symington swindled folks by mixing politics and fraud.
Symington originally borrowed $10 million in construction money from First Interstate Bank to build the Mercado in downtown Phoenix. This construction loan from the bank was to be paid off by a $10 million note from the pension funds of several Arizona unions.
The unions' $10 million commitment came due in the middle of Symington's first run for the governor's office in 1990.
Here's the hitch: First Interstate knew that Symington was already bankrupt because he was in default on another multimillion-dollar loan it had extended to him for a Mesa development. But the bank understood that if it revealed the candidate's true financial picture, the unions would legally be entitled to walk away from Symington, and First Interstate would be stuck with a bad $10 million note on the Mercado as well as the bad Mesa note.
Although legally obligated to reveal Symington's disastrous financial condition, the bank entered into a conspiracy of silence. The unions subsequently funded the Mercado, which allowed the governor to pay off the bank debt. Symington then declared bankruptcy, and the pensioners got stuck for the $10 million.
Once safely in office, Governor Symington appointed two of First Interstate's top executives to the state agency that regulated banks.
Symington further rewarded First Interstate by depositing huge sums of the state treasury into its vaults.
It has been 15 years since Symington swindled the elderly retirees out of their pension monies. Although President Clinton's pardon spared him from criminal prosecution, Symington was hauled into civil court by the unions. Attorney Manning has sued both the bank and Symington and won judgments of $30 million from them.
Symington was found personally liable, and the judge specifically cited the ex-governor's "intent to deceive the Pension Funds" by submitting financial statements that were "false" in numerous areas.
Although he is an heir of 19th-century robber baron Henry Clay Frick, Symington has told the state's elderly pensioners that he has no money to repay them. He is broke. The yacht, the fancy house, all of that belongs to his wife, Ann, an heiress in her own right.
Symington did sign over to the pensioners a $2 million inheritance he is due when an elderly relative of his passes away.
Today J. Fife Symington III ponders another run for governor. His supporters argue that he will champion a conservative agenda, but his testimony under oath proves that he still has the soul of a thief.
Shown one of his own phony financial statements, he acknowledged telling a bank he was worth $4 million personally.
Lawyer: "And did you have $4 million net worth when you signed it?"
Symington: "I said I did not."
Lawyer: "Were you reaffirming that when you signed it?"
Symington: "According to the legal documents, yes."
Lawyer: "And how about in your own mind?"
Lawyer: "What were you doing?"
Symington: "I was fulfilling an administrative function."
So there he is, sitting on his yacht off the coast of California. From Santa Barbara's harbor, he can't see the swindled pensioners in Arizona. But Symington is within spitting distance of Michael Jackson's Neverland. Fife can envision running for the governor's chair not because he is innocent, but because he is a pardoned felon. Makes you wonder if Symington's been drowning himself in Jacko's Jesus Juice.
Maybe we should all just slap him sober.
Author's note: Although some elements of this column are new, most of this reporting appeared in New Times during Fife Symington's administration under the bylines of John Dougherty, Terry Greene Sterling and myself. While columns are not usually dedicated, this one was written with Robert Winters in mind. He was an outspoken man with deep convictions who passed away too soon.