Judge Stranded

During the 13 weeks he's presided over Governor J. Fife Symington III's criminal trial, U.S. District Court Judge Roger B. Strand often has delayed making even routine decisions.

His indecisiveness continued Tuesday, August 5, when Strand declined to release final jury instructions to the prosecution and defense lawyers on the eve of closing arguments.

Instead, Strand was to issue the crucial jury instructions, which will govern how attorneys present closing arguments, on Wednesday morning, just 45 minutes before prosecutor George Cardona was set to begin the government's closing argument. Lead defense attorney John Dowd was to immediately follow Cardona.

Strand did make one major decision Tuesday, dismissing one of the 22 charges facing the governor. Strand tossed out count 12, which alleged that Symington knowingly submitted a false financial statement to the Mercantile Bank & Trust Company of Baltimore.

The defense had argued that Symington's financial statement was irrelevant to the bank's decision to issue a $300,000 letter of credit to Symington because the credit was secured by his mother's assets.

Cardona asked Strand for the legal basis for dismissing the count to assist the government in constructing a possible appeal.

Strand declined to provide his legal reasoning, but added, "I would only ask you to review all the evidence on that count."

Strand let stand 19 other bank-fraud-related charges and one count each of perjury and attempted extortion. The 21 felony counts are expected to go to the jury Thursday afternoon.

The trial quickly moved into its final stages after more than a week of testimony by the governor.

Symington's four-day cross-examination was a test of nerves for him and prosecutor David Schindler.

Although both men strained to maintain decorum for the most part, there were flashes of anger from both.

Schindler held an even tone despite Symington's stubborn refusal to directly answer questions, his selective memory, put-on befuddlement and his repeated demands to review exhibits. Schindler occasionally injected a snide remark--such as, "Done?"--after long, self-serving Symington rambles.

Schindler asked Judge Strand several times to order Symington to answer questions directly. At one point, Schindler reminded Symington that the attorney asks the questions and the witness answers them, not the other way around.

Symington generally maintained his cool and withstood each attack with well-prepared, although sometimes ridiculous, responses. He spoke confidently, despite the flimsiness of many of his explanations. The governor frequently appeared delighted with his responses, finishing an answer with a slight nod and an inverted grin as if to say, "So there!"

How the jury interprets Symington's demeanor during his week on the stand may be as important as what the governor actually said--or didn't say.

But what did his body language tell jurors?
Did they see a fat cat who refuses to accept responsibility for his actions? Or did they see a confident man bravely standing up for himself?

Symington had better hope for the latter, because Schindler masterfully eviscerated Symington's defense.

Schindler quickly dispatched Symington's first line of defense--blaming his former accountants at Coopers & Lybrand and, particularly, the late John Yeoman.

During direct examination by his attorney, Symington blamed Coopers & Lybrand for failing to inform him that his 1987, 1988 and 1989 personal financial statements were filled with bogus numbers that grossly overstated his net worth.

But Schindler forced Symington to confront his own handwritten notes, which indicated that Symington didn't want Coopers & Lybrand to determine the values of his real estate, which constituted more than 90 percent of his net worth.

Symington finally admitted that it was he, not Coopers & Lybrand, who determined values of his real estate.

"I would determine the market values on my statements," Symington testified.
Nevertheless, Symington insisted that "it goes without saying" that Coopers & Lybrand had a responsibility to notify him of any mistakes on his financial statements.

Schindler laid out how Symington kept multiple versions of his financial statements. First, Schindler presented evidence showing Symington had data at his disposal that would have allowed him to quickly and accurately compute the values of his real estate projects, all of which were in serious trouble as early as 1985 as the Phoenix commercial real estate market plummeted.

Schindler showed the jury how Symington's various financial statements for 1987 and 1988 failed to reflect the eroding market: Loan values were understated, market values overstated while the value of Symington's ownership share of the projects seemed plucked out of thin air.

Symington's stated net worth yo-yos up and down throughout the late 1980s.
In April 1988, Symington gave Dai-Ichi Kangyo Bank a statement saying his net worth was $9.3 million as of December 31, 1987. A month later, he gave First Interstate Bank and Valley National Bank another December 31, 1987, statement saying his net worth was $10.6 million.

"Well, why didn't you just give First Interstate Bank and Valley National Bank the same December 31st, '87, financial statement that you'd given to DKB on April 1st?" Schindler asked.

"Well, I think--I thought I had," Symington replied. "I mean that's the whole point here, that, you know, people do make mistakes, Mr. Schindler. And Joyce [Reibel, his secretary] would bring me a financial statement and I would sign it and it would go out the door. And I wouldn't necessarily review it. And I was under the assumption that I was giving the same statement. So a mistake was made. Those things happen."

But Schindler showed the jury the "errors" persisted as Symington's net worth fluctuated on subsequent versions of his financial statement.

Schindler moved to the most bewildering and amusing portion of his cross-examination--how Symington computed his personal share of the real estate projects his partnerships developed.

Putting on his best imitation of TV detective Columbo, Schindler led Symington through a line of questioning that caused spectators to laugh at Symington's responses.

Using an enlarged real estate schedule from one of Symington's financial statements as a prop, Schindler asked Symington to explain how the market value of a project was related to his personal equity share. Rather than simply subtracting the loan balance from the market value of a project and multiplying the difference by his percentage share, Symington opted for the crystal ball.

Schindler: "I want to make sure I understand you then, Mr. Symington. What you're telling us is that the Symington-share column has nothing to do with the market-value column?"

Symington: "Well, no. It's not that it doesn't have anything to do with it. The market-value column is a value that I had on my statement that I carried over year to year. And I never updated it. The Symington-share column is what I hoped to get out of the project at the end when we wrapped it up and hopefully in a day when, you know, we were doing a lot better with these projects. So there's a--there's a future value element in the Symington share."

(Symington's logic would allow homeowners to unrealistically estimate equity by valuing their houses at prices they "hopefully" will sell for in the future, then subtracting the mortgage balance.)

Schindler continued to attack testimony Symington gave during direct examination, when the governor told the jury he did not list $900,000 in loans from his mother and $100,000 from a business associate on his financial statements because both had told him he need not worry about repayment.

Schindler confronted Symington with sworn testimony he gave federal prosecutors in February 1993 when the governor said that the loans were not on his financial statements because of an "oversight."

The contradictions rattled Symington.
"I didn't go into the 1993 interview with any preparation, so I was guessing at that point," Symington testified.

Seizing the opening, Schindler bore down.
"Now, you just testified, Mr. Symington, you weren't prepared for this [1993] interview?"

"What I was saying was I certainly, in preparation for that interview, I really--I mean I did very minimal preparation, hadn't really--whoops, I spilled my water all over the place here. And my memory wasn't really--probably wasn't all that fresh . . ."

Symington's clumsy response undermined his pat excuse of memory failure when confronted with inconsistencies. Symington was now claiming his memory was better in 1997 than it had been in 1993.

Schindler finally presented evidence that most closely resembles a smoking gun, returning to Symington's reliance on multiple financial statements. Just weeks after Symington won the Republican gubernatorial primary in September 1990, First Interstate Bank began pressuring Symington to provide a financial statement with "fair market values" for his real estate projects.

Schindler presented Symington with a draft financial statement on which Symington slashed his values on his real estate schedule and came up with a net worth of $1.6 million, down sharply from his previously reported net worth of $11.9 million.

But the $1.9 million net worth statement was never sent to a bank. Instead, Schindler charged that Symington went back, erased some of the lower real estate values and raised them back to previous levels to boost his net worth above $4.6 million.

In a dramatic flourish, Schindler distributed the real estate schedule containing erased but still visible figures, asking jurors to examine the erasures and faint numbers.

Symington nervously sat on the stand for several minutes as the jury examined the document. Court recessed for the day, leaving the jury to contemplate the evidence.

Schindler opened his final day of cross-examination by returning to the worksheet erasures. Symington testified that he revised upward the values of two buildings at the Camelback Esplanade to boost his net worth provided to First Interstate to above $4.6 million.

"I'm not sure what I was doing in terms of the numbers with the Esplanade, but obviously I was doing some tinkering," Symington testified.

At first, Symington claimed the revised numbers reflected fair-market values to conform with a certification letter he had provided to First Interstate Bank.

But Schindler pointed out that Symington's real estate values for the Esplanade did not reflect that Symington's interest had been sharply diluted and were not fair market values.

Cornered, Symington admitted that the Esplanade values were what he "believed" he would "get out of the project" rather than fair market value.

Schindler then suggested a motivation for the changes in Symington's valuations of the Esplanade buildings: The November 1990 general election was weeks away and two lenders, Valley National Bank and DKB, still were requiring Symington to maintain a $4 million net worth.

The prosecutor charged that Symington revised the Esplanade numbers upward to show a net worth exceeding $4 million to keep Valley National and DKB from declaring him in default prior to the election.

"Well, I wouldn't agree with that," Symington testified.
Schindler shifted to a November 1991 letter Symington sent to CitiCorp in which the governor stated he didn't have a December 31, 1990, financial statement when in fact he had prepared two, one with a net worth of $5.4 million and the other with a net worth of negative $4 million.

"And you signed this letter immediately below the false statement, right?" Schindler asked.

Symington rejected Schindler's contention, saying it was not a false statement and added, "I don't even remember reading that particular line."

Schindler turned his focus to the Mercado, and the attempted extortion charge. Schindler rattled off a series of accusatory questions claiming Symington threatened to financially ruin the Mercado if the lenders, the union pension funds, filed a public foreclosure notice.

Relying heavily on notes prepared by the pension funds' money managers, Schindler accused Symington of using his position as governor in an attempt to pressure the pension funds to release Symington from a $10 million personal guarantee to repay the Mercado loan. The pension funds never released Symington from the guarantee and eventually won a $10 million judgment.

Suddenly, Symington's memory became crisp, and he denied the charges in the most heated exchange of the trial. Symington testified the notes by the union representatives documenting the alleged attempted extortion were "full of errors."

"Well, but you didn't take notes, did you, sir?" Schindler countered.
"No, I did not. But I know what I did and what I didn't do," Symington testified.

"Or if you did take notes, you've never produced them, did you?" Schindler countered.

"Mr. Schindler, I did not take notes," Symington replied.
The testimony left Symington exhausted. Moments before returning to the stand to face Schindler for the last time, Symington sat hunched over in his chair, head bowed, eyes focused on the floor.

Although Symington's defenses have been riddled, there is still hope for the governor.

Dowd last week began hyping his "Hail Mary" defense to reporters. (Ironically, for an attorney who continually growls at the press, Dowd has tried to try the case in the media.)

His last-ditch strategy? None of this matters.
Symington's financial statements don't matter. The valuations he placed on them don't matter. The banks didn't care and were just "papering their files" with Symington's statements to keep the dreaded "regulators" happy.

In other words, according to Dowd, the last 13 weeks of testimony have been a waste of time and the 22-count indictment is baloney.

"It's all a bunch of crap," Dowd exhorts.
How's that for a $3 million legal defense?
It might work.


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