Fife Pays His Taxes

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The feds seemed to understand that, in a more ethical world, the person in charge of keeping the financial records clean--the accountant--should not also be in charge of raising the money.

The federal prosecutors, understandably, paid particular attention to Yeoman."[David] Schindler [assistant United States attorney] also spent time exploring the relative significance of the Symington engagement for John Yeoman compared to his total mix of clients," noted Van Voorhees. "This was approached in several ways at various points in the interview. Generally, Windnagle said that all Mr. Yeoman's clients were important to him, but that Symington was probably Yeoman's largest client, and Yeoman appeared to have more than general knowledge of his financial affairs."

This was a particularly compelling thing for Windnagle to say about Yeoman.
In fact, it was so interesting that the FBI and the prosecutors returned to this theme.

Later in the "Van Voorhees Memorandum," the accountants' attorney wrote: "Windnagle was asked on several occasions about the extent to which Yeoman reviewed the returns and had knowledge of Symington's financial arrangements. He (Windnagle) said Yeoman did the final review and signed all returns . . . (Yeoman) appeared to have a substantial knowledge of Symington's personal financial situation as well as that of the various financial entities . . ."

Even to me, this is very interesting.
As we all saw in the Charles Keating scandal and numerous other S&L failures, an accountant's relationship with a suspected crook is symbiotic.

It's like this.
Think of the feds as God. A sinning developer comes into the confessional booth to bare his soul. The accountant, or priest, stands between God and the sinner, between the developer and the feds. It is the accountant who shields the guilty from eternal damnation.

It might be too early to divine all the answers about Fife Symington, but it is high time to ask the questions.

Was the governor a supplicant to John Yeoman's benedictions?
How corrupt was the relationship between Coopers & Lybrand and the governor of Arizona?

We know that the feds believe Symington handed out different financial statements to various lending institutions at the same time, telling one bank one thing about his net worth while telling a different bank something else entirely ("She Was Only Following Orders," February 2, l994, and "Cinma Vrit," October 12). If the feds are right, this is felony fraud.

Did the corruption between Coopers & Lybrand and the governor extend to these coded financial statements?

The answer is under Yeoman's lock and key.
Did the corruption extend to fraudulent tax returns?
The answer is under Yeoman's lock and key.

Did the corruption extend to insider dealing worth millions of dollars in state contracts for Coopers & Lybrand?

The answer to that is unequivocal.
The answer is yes.
Here's what we know.
On July 10, the lid on Project SLIM blew off.

The state attorney general announced that Coopers & Lybrand would pay a $725,000 fine, which ended the state's investigation into allegations that the accountants, principally John Yeoman, engaged in outrageous bid-rigging with the governor's henchman, George Leckie, to secure multimillion-dollar contracts on Project SLIM. Everyone concerned promised he would never engage in bid-rigging again.

Which one likes to see in a Big Six accounting firm.
On July 17, the attorney general revealed a similar settlement with Symington handyman George Leckie.

On July 25 and 28, and again on August 1, the FBI and the federal prosecutors grilled the accountants.

When exactly did the cancer of corruption between Coopers & Lybrand and Fife Symington start, and how deep did it run? The answer to that question may well explain why Governor Symington and George Leckie worked so hard to slant the Project SLIM bidding in favor of Coopers & Lybrand.

Here's what we know.
Windnagle told federal investigators that he was aware that Symington was the beneficiary of a stupendous pricing discount on his tax return.

"Under questioning," reads the "Van Voorhees Memorandum," "Windnagle said that the cost to Symington for preparation of his personal return was approximately $2,000 to $2,500, whereas Windnagle's estimate of the time invested by all Coopers & Lybrand persons in preparing that return was approximately 50 to 60 hours."
Does this deal pass the smell test?
You tell me.

A partner like Yeoman bills $200 to $250 an hour. For 60 hours of work, that runs out to somewhere from $12,000 to $15,000.

Symington paid, maybe, $2,500.
But why should the governor pay full freight on his tax bill, or any other accounting bill, when there were millions in state contracts waiting out there for a smart accountant?

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Michael Lacey
Contact: Michael Lacey