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Historic Misconduct

He is beginning to act peculiar in public.
Governor Fife Symington is now comparing himself to - are you sitting down? - Thomas Jefferson.

On Saturday, he made the comparison in a front-page story in the Los Angeles Times, saying that both he and Jefferson were men of great political vision who had nonetheless been bruited about by periods of economic hardship. He's also likened himself to Jefferson with a reporter for the New York Times, and said the same thing to Morley Safer in a yet-to-air segment of 60 Minutes.

Depend upon a scoundrel to compare himself with a Founding Father. Who else would have the brass?

There are startling developments and new chapters of information to reveal today in the Symington scandals.

News of them has been leaked to us by government insiders, sources at the law firm that represents Symington's accountants (Coopers & Lybrand), a business associate of the governor, a former secretary of a high-level partner at the accounting firm and a source inside Coopers & Lybrand itself.

One can conclude from their revelations that, to the members of the community who have dealt closely with our governor, Thomas Jefferson does not come immediately to mind as a comparison.

These sources reveal that the federal grand jury has expanded the scope of its investigation from Symington's activity in the private sector to include his conduct in office.

There is also fresh evidence about the governor's debts and obligations to his accounting firm, Coopers & Lybrand--evidence showing that Symington's debts were being forgiven just as he was sliding multimillion-dollar state contracts to the firm.

And credible charges of systematic election-law violations by Symington's campaign have now come to light.

But nothing sets the stage for these revelations like the governor's grand mal seizure of megalomania on the national stage.

It explains everything.
Ordinarily, you might understand the governor's raving; the man is under a lot of stress because of his $25 million bankruptcy and a federal grand jury investigation that has him in its cross hairs.

But I have little sympathy for the governor.
Fife Symington did not become delusional because of any crisis. His head has always spun with visions of unbridled grandeur.

Shortly after he was elected governor, he began visiting Jerome Hirsch, a partner in Symington's first spectacular failure, the Esplanade.

The Symington Company owed Hirsch $3.1 million, according to one of the governor's public financial statements.

Symington was in Hirsch's office to renegotiate their deal. The governor arrived in full regalia: chauffeured limousine, fetching attendants and a full detachment of state troopers.

His circus-train visits continued until an agreement to reduce the amount Symington owed was drafted, according to Hirsch.

After haggling over the write-down with Hirsch, Symington added one final condition. The obligation was to be reduced by approximately $100,000 if Symington was elected president (of America, one presumes).

Who is picking out this guy's eau de cologne?
Symington's anxiety over media exposs and possible indictments has not caused his astonishing Founding Father statements in the national press; no, it is the other way around.

It is the megalomania that has triggered the corruption.
You cannot write a law that Fife Symington feels he must obey.
Thomas Jefferson writes his own laws.

As the Symington saga unravels over the months ahead, you must ask a single question.

What did Governor Fife Symington owe his accounting firm, Coopers & Lybrand?
This is the only question that penetrates to the heart of Symington's corruption.

Allegations from a trusted aide, as well as alarming new numbers from Coopers & Lybrand's own sensitive files, paint a governor whose very air hose was directly connected to the accounting firm's oxygen tank.

Fife Symington owed Coopers & Lybrand his political and financial life.
Coopers & Lybrand's own files reveal that Symington ran up enormous debts that were forgiven or forgotten by the accountants. The bad debt ran to six figures.

Almost as embarrassing are the allegations of a former employee of the accounting firm.

Doctored ledgers in the Symington gubernatorial campaign, laundered cash, campaign donations treated as slush funds and brazen violations of election laws--all engineered by the governor's accountants--are the new charges leveled by a former secretary at Coopers & Lybrand.

No wonder the governor and his deputy chief of staff, George Leckie, fixed two multimillion-dollar state contracts--both involving Project SLIM, Symington's plan to streamline government--so they would go to Coopers & Lybrand.

As appalling as the bid rigging in Project SLIM was, it is worse once you realize that it was not simply political cronyism. This was not merely a case of the governor taking care of his associates at Coopers & Lybrand.

 

This is a level of political corruption that I salute for its audacity.
It was a payback, a quid pro quo.
Symington's stacked-deck approach to civic affairs was hardly the Republican revolution he promised Arizona.

"This was [Ferdinand] Marcos economics," says one knowledgeable prosecutor, who goes on to explain that the governor divided up the spoils of the state with the handful of people who engineered his election.

On top of the former aide's allegations, in addition to the new data from Coopers & Lybrand's own files, there is even worse news for Symington from federal investigators.

The grand jury has expanded the scope of its investigation.
On October 13, attorney Stephen Dichter shipped a large volume of Coopers & Lybrand documents to the FBI.

According to a leaked internal memorandum from Bryan Cave, the law firm representing Coopers & Lybrand, Dichter's records were dispatched to Special Agent Ken Hancock.

Dichter refused comment.
Hancock is the FBI agent gathering data for the Symington grand jury.
All of the files requested by Agent Hancock pertained to Project SLIM.

Until now, the grand jury has limited its investigation into allegations that Symington provided false information to lenders on his multimillion-dollar developments prior to taking office.

Today, Governor Fife Symington's conduct in office is under examination by a United States attorney.

Let us begin with the thorny data in Coppers & Lybrand's internal files.
The accounting firm's own records show a disturbing pattern. As Fife Symington moved from the private sector into the Governor's Office, the amount of Symington debt that was recorded as uncollectable by Coopers & Lybrand skyrocketed.

During this time, Coopers & Lybrand picked up $4.6 million in state contracts from Project SLIM I and II, contracts that the governor and his deputy chief of staff steered to the accountants through a combination of bid rigging and influence peddling.

Coopers & Lybrand would pay a fine of $725,000 for its role in this corruption.
While many of the details of the bid rigging have been reported in New Times and the state's dailies, what has remained unanswered is the fundamental question: Did the governor benefit from his relationship with Coopers & Lybrand?

The answer is yes.
Every year, Coopers & Lybrand "reserved for loss" ever greater sums of Symington's debt. An accounting term, "reserved for loss" simply means that Coopers & Lybrand had no expectation of collecting the money owed.

Here are the numbers from a source inside Coopers & Lybrand.
Coopers & Lybrand's in-house counsel in New York, Michael Garrett, refused to comment on this data, demanding instead that we give up our source for obtaining it.

"Well, isn't this charming," sneered Garrett. "Who stole these filesYou can't have them legally. We'd like to prosecute whoever stole them. You're talking about a felony here."
Garrett concluded the interview, "We don't comment on stolen material."
Coopers & Lybrand has done Symington's personal accounting since at least 1985. When elected governor, his first major undertaking was Project SLIM. Symington dispatched his deputy chief of staff, George Leckie, to run the steering committee that selected Coopers & Lybrand to do the first phase of Project SLIM. The accountants ended up with their competitors' confidential bids and cut their own quote by $440,000 to win the contract.

A second and larger SLIM contract was also steered to Coopers & Lybrand by Symington staffers.

Coopers & Lybrand's role in the bid rigging not only cost the firm a six-figure fine; the accountants also promised never to engage in "fixing" another state contract. Leckie, now in the private sector, paid a substantially smaller fine but was barred from government lobbying for three and a half years.

As the SLIM contracts were steered to Coopers & Lybrand, the firm was classifying more and more of the bills Symington owed it as "reserved for loss"--that is, the bills were well on the way to being forgotten.

Certainly, there is an argument to be made that, as Symington's developments went belly-up, it was to be expected that he would have less ability to pay his debts. But that argument does not explain why Coopers & Lybrand continued to supply its services to a client who could not pay.

In 1991, the accounting firm's own records show that it had to write off nearly half of the governor's bill. Yet afterward, Coopers & Lybrand continued to supply high-priced professional assistance to Symington and discounted these services by 94 percent.

In addition to the staggering "reserved for loss" entries, the accounting firm simply wrote off two more large chunks of debt for the governor.

In 1991, Coopers & Lybrand forgave $22,000. In 1994, the accountants wrote off another $45,000 due from Symington.

 

Under the terms of the Project SLIM bid rigging settlement agreement, announced in July, the attorney general has the right to ask for all of these files at Coopers & Lybrand.

Yet when we contacted Suzanne Dallimore, chief counsel of the antitrust unit at the Attorney General's Office, she refused to comment on whether those records have been requested.

Marjorie Jane Kendall is the woman who tumbled the house of cards in the Project SLIM scandal. It was her testimony that forced Coopers & Lybrand to pay the State of Arizona to put an end to the attorney general's investigation of bid rigging.

Kendall was John Yeoman's secretary.
A partner in Coopers & Lybrand, Yeoman was the accounting firm's pipeline to Symington and the governor's deputy chief of staff, George Leckie.

Not coincidentally, Symington was Yeoman's largest account.
The governor sent Leckie, as his representative, to confidential planning sessions on Project SLIM in which bids from assorted accounting firms were discussed. It is against the law to leak the bids.

Yet prosecutors had phone records that showed Leckie repeatedly phoned Yeoman after the conferences.

When questioned, both Yeoman and Leckie had amnesia about the content of their conversations.

But Marjorie Jane Kendall told the attorney general that Coopers & Lybrand had all of its competitors' secret bids before submitting a "best and final" offer for the Project SLIM contract.

The accounting firm was the highest of five bidders in the first round. Armed with illegal data, however, Coopers slashed its final proposal by $440,000 and took the prize.

Marjorie Jane Kendall deserves a statue in a local park for her pivotal role in revealing this corruption.

And she told investigators a lot more than has previously been made public.
The secretary charges that shortly after Symington was elected governor, illegal campaign contributions were hidden, bogus checks were written but never cashed and a phony check ledger was kept by Coopers & Lybrand.

During Symington's first run for the Governor's Office, Yeoman served as the campaign's treasurer. He made it clear to Kendall that she had to work on the election records.

The secretary did not like what she saw or what she was forced to do to keep her job.

On the phone, Marjorie Kendall was blunt.
"I am a born-again Christian," said Kendall on Monday. "If something evil is happening, I don't want to be part of it. The stuff that was going on at Coopers & Lybrand wasn't good."
Her transcribed remarks are contained in a report buried in the 14,000 pages of records in the attorney general's Project SLIM investigation. In an interview this week, she expanded upon those statements.

Kendall kept records for the campaign to show that wealthy Republicans had contributed only the maximum allowed under the law when, in fact, the donors contributed much more.

"I remember there were people who gave large sums of money, and they would be over the maximum. . . . The limit from what I was explained was $500, and there were people who would give more and they would just . . . document it so it wasn't," said Kendall.

"What they were doing is, they would record a payment, and then they would say, 'Well, we have to send a check back because they paid too much.'

"But the check never got sent. So they would write a check to someone who overpaid, but that person never got the check."Kendall didn't merely observe this going on around her; it was her responsibility to reconcile the bank statements with the campaign records.

"I did not sign the checks, but I balanced them," she added. "The statements would come to me, and I would balance them."
Though a ledger was kept showing that all these excess, and illegal, funds were paid back, the checks were not cashed.

"They never cleared [the bank]," said Kendall.
Because Kendall worked on postelection mop-up, most of the fund raising had already been done. The scale of the activity she witnessed was more galling than monumental.

Though she no longer recalls specific dollar amounts or the names of contributors, she said that by the time she left there were ten file boxes of financial documents on all aspects of the campaign.

Specific answers, she says, reside in those boxes.
One name she does recall is that of Annette Alvarez.
"He [Symington] had an assistant, Annette . . . they paid her taxes, and we had to fudge those records because the news media had gotten ahold of it. . . . It started when the media was really getting involved, and they would want things to be proved to them.

 

"They would have me go back and doctor documents. Then they would provide those documents to the media as the original document, and it wasn't."
Kendall said the doctored statements related both to income and disbursement.
After the election, state records revealed that Symington's election committee had indeed used campaign contributions to pay off tax liens assessed against Alvarez.

Two checks were sent directly from the campaign to the tax man: $8,149 went to the Internal Revenue Service; $479 went to the Arizona Department of Revenue.

At the time, state officials said no laws were broken.
Not everyone was so sanguine.
Governor Evan Mecham had just been impeached for diverting citizen contributions in the state Protocol Fund for his own use. Consequently, folks were a little sensitive about campaign-finance shenanigans.

Dana Larsen of Arizona Common Cause protested the Alvarez tax diversions at the time they were discovered.

"The money that was given to the candidate . . . was given, for the most part, by people who felt they were trying to elect someone to office, not for use for personal reasons," said Larsen.

After working for John Yeoman at Coopers & Lybrand for one year, Kendall was fired.

Except to question the reliability of Kendall as a witness, Yeoman's attorney, Douglas Behm, said his client, who was out of town at a funeral, would have no comment.

It is possible that Marjorie Kendall is a disaffected secretary, bitter over her dismissal. But I don't know that.

Is it even a relevant consideration? I don't believe so.
It is a matter of public record that Symington paid Annette Alvarez's delinquent taxes with campaign contributions and hotly defended this action afterward.

Even accepting Dana Larsen's criticism, campaign irregularities are small transgressions in the grand panoply of the governor's sins. After all, it was Symington's utter disregard for regulations that played such a crucial role in the billion-dollar collapse of Southwest Savings and Loan.

But that is precisely the point.
There simply is no crime, felony or misdemeanor, no sin, mortal or venial, that the governor feels bound to acknowledge. Consequently, Fife Symington moves from the picayune strut to the larcenous cake walk without pangs of conscience.

He is history's great man, unencumbered by mortal statute.
At first, he only pays Alvarez's delinquent taxes. It is a grand gesture above the spirit of the law. But then he appoints this college dropout--whose love letter to the governor has been leaked to the press--to head up Arizona's international economic development operation, a $60,000-a-year position she is so underqualified to fulfill that she promptly blows several multimillion-dollar deals and is forced to resign.

In the beginning, his accountants help him skirt meddlesome campaign contribution statutes. The next thing you know, Coopers & Lybrand is awarded $4.6 million in state work as a result of bid rigging and influence peddling by the governor and his deputy chief of staff. Is anyone actually surprised that the crooked Project SLIM contracts correspond in time to Fife Symington's accounting bill being discounted out of existence?

I tried to contact Squire Jefferson to ask him what he thought about all of the events in this column, but he was unavailable for comment.

I assume he was out tending his tobacco plants.--Lacey


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