Fif'e Slow Dance With Debt
Debt has long been an addiction of Arizona Governor J. Fife Symington III.
Symington's fondness for borrowing dates back more than 23 years, when his first marriage ended with Maricopa County divorce records stating that Symington had accumulated heavy debts and wasn't "gainfully" employed.
More recently, Symington has relied repeatedly on his mother and wife to bail him out of one financial jam after another, ranging from political campaigns to legal fees to personal bank loans.
Symington's reliance on debt has left a long paper trail for creditors examining his financial records inthewake of his September 20 filingforChapter 7 bankruptcy protection. After years of Symington's refusing torelease personal financial records, some key documents are surfacing.
The records reveal that Symington repeatedly promised to repay huge personal debts, only to renege and foist the burden onto others.
When Symington's former wife, Leslie Barker Symington, filed for divorce on October 4, 1972, she claimed Symington had accumulated heavy indebtedness, including a $130,000 "demand note held by Mellon National Bank."
Mellon Bank has long been the trustee for Symington's four family trust funds, which contain 15 blue-chip stocks worth about $830,000. The governor says he has dipped into the funds in recent years to pay legal and accounting fees.
Sometimes, Symington turned to the trust funds for far more mundane matters.
The governor, who projected himself to voters during his first run for office in1990 as a successful developer, wasapparently strapped for cash in November 1989. He sought a special disbursement from his trust funds for a kitchen addition, according to notes from an FBI interview with his former secretary.
Valley National Bank, now Bank One, became a haven for Symington as his real estate holdings collapsed in the late 1980s. Bank One continued lending money to Symington, one loan after another, even after the governor failed to repay earlier loans, federal bankruptcy records show.
At first, Bank One seemed to put some credence into the value of Symington's real estate projects. In November 1989, Bank One extended an 18-month, $893,324 loan to Symington, secured by Symington's partnership interest in the Esplanade development.
Four months later, as Symington's gubernatorial campaign was getting off the ground, he was back at Bank One's door asking for more money, this time $600,000. The March 2, 1990, loan was supposed to be short-term, with repayment coming a month before the general election.
But when the due date came, Republican nominee Symington asked for the loan to be extended--by five years. Bank One agreed, but demanded that Symington come up with a $300,000 irrevocable letter of credit. By November 15, 1990, Symington had arranged for the letter ofcredit from his mother's bank in Baltimore, the Mercantile-Safe Deposit &Trust Company, to be delivered to Bank One.
It is uncertain whether the letter of credit was issued by Symington's mother. But records show that Martha Frick Symington used the Mercantile bank to funnel about $670,000 in "loans" to her son while he was running for governor.
Symington says the loans from his mother were later purchased by his wife, Ann, who, in turn, forgave her husband's debt. Ann's generosity didn't stop there. She also forgave about $625,000 worth of her own personal loans to Symington for his 1990 campaign and another $40,000 in loans tied to the 1994 election.
Twenty-one months after obtaining theMarch 2, 1990, Bank One loan for $600,000--and ten months into his first term as governor--Symington was back at Bank One's doorstep seeking more money.
The bank obliged, lending Symington $210,000 on December 12, 1991. This time, the bank obtained a repayment pledge from Symington's mother and the deed of trust on her Lutherville, Maryland, estate.
How did Bank One fare on its loans to the governor?
Symington owes $783,000 on the $893,000 loan and $180,000 on the $210,000 note, according to bankruptcy court records. It is unknown whether Symington actually paid anything on theloans. The governor's personal financial statements filed with the secretary ofstate indicate that Bank One haswritten down the value of the two loans.
The $600,000 loan, meanwhile, is down to $238,000. But that doesn't include the $300,000 letter of credit that Bank One executed. And, like the other two loans, state records indicate Bank One wrote down some of this loan, as well.
At the same time Symington was obtaining funds from his mother, thegovernor was hitting up his wife forabout $250,000 to cover his mounting legal fees. This wasinaddition to her hefty personal loans that funded his campaigns.
Ann Symington paid more than $200,000 in legal fees to Symington's Washington, D.C., attorney, John Dowd, the governor said during his October 31 debtor's examination. In exchange for the payment, Symington says he has given his wife personal belongings such as jewelry, books and art.
The bankruptcy trustee, Louis A. Movitz, isn't buying Symington's contention that the transfer of his personal assets to his wife was a bona fide exchange. The trustee says the deal appears to be a fraudulent attempt by Symington to transfer his assets out of the bankruptcy estate, an assertion Symington's attorneys deny.
Ann Symington is not part of the governor's bankruptcy case. The couple claim they have maintained separate property since the signing of an antenuptial agreement several days before their February 1976 wedding.
Creditors, primarily a consortium of union pension funds seeking repayment of an $11.5 million judgment against Symington, are seeking to prove the governor and his wife commingled theirassets and created community property which might be used to pay off debts.
Despite Symington's sworn statement during the debtor's examination that he and his wife have never owned joint property, Pima County records show that the couple invested in a partnership together and held title together on a lot north of Tucson.
Pima County records show that Ann and Fife Symington jointly invested in a real estate partnership called Pusch Ridge Associates in 1987. The partnership transferred 50 percent interest in alot in the pricey LaReserve development overlooking ElConquistador Resort to the Symingtons on December 17, 1987.
A special warranty deed dated December 23, 1987, conveys the property to "J. Fife Symington III and Ann P. Symington, husband and wife, as to an undivided 50 percent interest..."
Pima County tax bills show Ann and Fife Symington as co-owners of the property as recently as 1991.
Symington did not report his ownership in the La Reserve parcel in his first two financial disclosure statements filed with the state. The lot is reported as being owned by Ann and Fife Symington on thegovernor's January 31, 1992, state disclosure.
The governor's January 31, 1993, financial disclosure statement shows the couple divesting the property on December 18, 1992, with Ann repurchasing the interest in the lot on the same day. Subsequent disclosure statements show Ann Symington held the property in her name only until she sold it on November 21, 1994.
Symington's long and complicated forays with debt have left scores of lenders holding tens of millions of dollars of worthless personal repayment guarantees.
But only one lender, the union pension funds that lent Symington $10 million forthe Mercado project in downtown Phoenix, is vigorously questioning Symington's financial promises.
Meanwhile, the state's largest bank, Bank One, stands to lose $1.2 million in personal loans made to Symington. Most of the debt was incurred during Symington's first campaign. Bank One hasn't uttered a single public word about Symington's bankruptcy.--John Dougherty
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