$285,000 Points of Light

George Leckie's fund-raising expertise helped put J. Fife Symington III in the Governor's Office. Leckie is once again seeking donations, but this time it's in an attempt to stay out of prison.

With his federal criminal trial scheduled to begin July 23, the former gubernatorial aide is quietly soliciting cash from individuals and corporations for a legal defense fund.

A May 31 fund-raising letter from the George E. Leckie Defense Fund says he needs $285,000 to pay his attorney, Thomas Connelly, if his case goes to trial.

"Simply put, I have now exhausted all of my resources from which to raise further funds. I really need your help now," Leckie writes.

Leckie's fund-raising effort is being assisted by John Stiteler, who has close ties to state Treasurer Tony West and Governor Symington. Stiteler, Leckie and Symington all have checkered financial histories.

Symington created his own legal defense fund earlier this year to defray millions of dollars in legal bills stemming from his personal bankruptcy filing and, now, 23 federal criminal charges.

Leckie and Symington were indicted by the same federal grand jury on March 14 and June 13, respectively. Leckie, who faces seven felony fraud counts, is accused of illegally exchanging information with another former Symington aide, the late John Yeoman, to assure that Yeoman's accounting firm, Coopers & Lybrand, would win a $1.5 million state contract for Project SLIM. Leckie was a member of the state selection committee that awarded the contract.

The federal probe into Project SLIM is continuing.
Leckie, who served as Symington's first deputy chief of staff, says in his fund-raising letter that he already has spent $135,000 on legal fees related to state and county prosecutors' investigations of his role in the alleged Project SLIM bid-rigging.

Maricopa County Attorney Richard Romley found no wrongdoing in his probe. Attorney General Grant Woods struck a settlement agreement with Leckie last year, ending a civil investigation and requiring Leckie to pay a $25,000 fine and to cease lobbying and bidding on state contracts for three and a half years.

Leckie's letter says two friends--Steve Mihaylo and Stiteler--are "co-chairs" of his defense fund. Leckie and Stiteler did not return phone calls. Neither did Leckie's lawyer, Connelly. Mihaylo could not be reached for comment.

Stiteler's business career includes six business bankruptcies, state and federal tax liens, a $263,000 judgment stemming from a failed New Mexico thrift and a $15 million federal lawsuit filed against him and six other former officers and directors of the failed Century Bank.

Stiteler also has been appointed by Symington to key state positions. The governor set off a firestorm of protest in 1993 when he appointed Stiteler to the Arizona State Retirement System's Investment Advisory Council. Stiteler was forced to resign after publicity about his business problems.

But before Stiteler left the council, he supported an effort that eventually led to a significant change in the way the retirement system invested its money. Beginning in 1995, retirement system employees--rather than a professional investment house--were given the power to make investment decisions for up to 20 percent, about $2.6 billion, of the fund.

Previous retirement boards chose not to manage investments internally, relying instead on money-management firms.

"We talked about in-house investing many times," says Rollin Pelton, former chair of the Investment Advisory Council. "We worried we'd be pressured by brokers."

Stiteler was not only a controversial figure with the state retirement system. He also has played a significant role in the investments of several smaller state retirement funds: the Public Safety Personnel Trust Fund, the Elected Officials' Retirement Plan and the Corrections Officer Retirement Plan.

Stiteler, a business partner and an employer of state Treasurer Tony West, has made money off these retirement funds at least twice.

In one case, West and Stiteler persuaded the funds to purchase notes held by Emerald Homes, which at the time was embroiled in the Keating savings-and-loan scandal. Stiteler also got a six-figure fee for introducing another developer friend to the board. The funds lent the developer $13.7 million for a venture that was profitable--until it got tied up in the bankruptcy of UDC Homes.

A bill introduced last winter by state Representative Barry Wong, a Phoenix Republican, to ban in-house investing by the retirement system failed to pass the Legislature.

Leckie, who was Symington's campaign finance chairman in 1990, has said he helped get Stiteler appointed to the retirement board, in part, because Stiteler raised funds for Symington's 1990 election campaign.

Leckie resigned from the governor's staff in July 1992, after bungling the Governor's Office budget and in the wake of disclosures about his own business failures.

Although he exceeded the limits of the Governor's Office budget, Leckie tells potential defense-fund donors, "The one lesson I have learned is that government resources are unlimited, and when you are singled out, those resources are formidable."

Keeping with the back-room political style that marked his tenure as deputy chief of staff and later as Symington's director of Project SLIM, Leckie tells potential donors that contributions "may be made anonymously" and "will result in no public reporting or be made of record due to the fact that I am a private citizen as contrasted with a public official."

But Leckie adds a caveat: "[W]hile there will be a determined effort to keep this private, I cannot absolutely guarantee it in today's media and political environment.

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John Dougherty
Contact: John Dougherty