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"Within six months, he gutted the hotel [financially] and split town," Hart says. "Western had allowed both Davis and Renda to come in as corporations, so they had no individual liability. We later learned this was a familiar pattern for Renda: to buy a property, inflate the mortgage and make off with the difference, leaving the project to go into bankruptcy."

In March 1988, Western Savings foreclosed on the hotel mortgage and demanded payment from the investors. "Ironically, Joe Woods was the first person to recognize the connection between the hotel bankruptcy and organized crime in the S&L industry," Hart says. "In October 1988, two years after Davis left town, Joe read a newspaper article on the topic and recognized one of Renda's other partners. He went through the roof and sent the piece to Driggs, saying, `What is this?'"

Joe Woods says he was so concerned about Renda that he contacted the Federal Bureau of Investigation in December 1988 for information, fearing that his family might be in danger. By that time, however, Renda was already under federal indictment for banking crimes in other states.

Ross says she dislikes being in the spotlight, but agreed to talk to New Times because she believes her ex-husband has been unfairly criticized in connection with both dealings. "Grant is a very honorable guy," Ross says.

TODAY GEORGIA STATON'S campaign is buoyed mostly by Woods' sullied image.
While Woods had attracted a broad base of support from conservatives and moderates alike, Staton remains one of the most unpopular figures in a race this year, as measured by her inability to attract money and endorsements. Staton, whose main claim is her background as a prosecutor, failed even to win the backing of major police organizations. And the mass defection of Democrats to Woods represented an "unprecedented" vote of no-confidence, says one influential Democrat.

Two weeks ago, Staton threw out fresh bait: Her campaign reportedly leaked documents linking Woods to wheeler-dealer Barry Wolfson, the subject of a civil suit brought by the attorney general over Wolfson's handling of $360 million in public bond money loaned for apartment developments in the early Eighties.

When contacted by reporters, Wolfson claimed that Woods used extortion to obtain a settlement on a 1986 claim Woods had filed on behalf of his father. Woods had sued Wolfson for refusing to pay $360,000 for construction of a Mesa apartment complex built by Joe E. Woods Incorporated. (Wolfson contended in his counterclaim that the work was slipshod.)

Wolfson says Woods accused him of criminal fraud in connection with the bond money Wolfson had obtained from development agencies in Chandler, El Mirage, and South Tucson. (Wolfson said he would use the $360 million to build affordable housing, but instead invested it, earning $3 million in interest before returning it to bond authorities.)

Wolfson alleges that Woods threatened to tip off the attorney general unless Wolfson paid off the debt to Woods' father. Shortly thereafter, Wolfson paid Joe Woods $175,000 to settle the claim. (Wolfson was already under investigation by the state, which later filed suit to recover his profits from the arbitrage scheme, says Attorney General Bob Corbin.)

Woods dismisses Wolfson's accusation, saying he had done nothing unethical. And Wolfson's own attorney in the suit, Phoenix lawyer David Van Engelhoven, issued a contradiction as sweet as anything Woods' mother could have dreamed up: "We didn't feel then, and we don't feel now, that Grant Woods did anything unethical," Van Engelhoven says. "Mr. Woods did nothing that affected his honesty, trustworthiness or his fitness to practice law."

Staton has denied knowledge of the Woods suit against Wolfson, and said Wolfson's extortion claim came as a surprise--a position she maintained even after news accounts identified her campaign as the source of the original story linking Wolfson and Woods.

But David Eisenstein last week revealed that the extortion story was up for grabs as early as the primary, when Wolfson offered it to him. The only problem with it, he says, was that any competent attorney could discern that Wolfson's claim was bogus in fewer than five minutes.

It took the state attorney general a lot longer than that to dispose of the allegation. Nearly a week into the election's final stretch elapsed before Corbin announced that he had found no basis to the charge. (Corbin, whose hand-picked successor Steve Twist was narrowly defeated by Woods in the primary, was denied a federal judgeship because of the influence of Senator John McCain, Woods' political mentor.)

Polls taken in the interim reflect the confusion sown among voters, and the percentage backing Woods dropped from 40 to 32. At the same time, the proportion of people still undecided has actually increased, rather than decreasing as is usual toward the end of a campaign.

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Kathleen Stanton