These days it takes a blood lust to run for public office. In time, the candidate must forsake time-honored virtues. He must lie. He must cheat. Sometimes he must do both.
Three weeks ago New Times ran an investigation of Fife Symington's real estate empire. Like many others, we wondered whether Symington's kingdom was just another house of cards.
After all, with Arizona's economy in a graveyard spiral, all those vacancy signs in Symington's windows might spell trouble. Even for Fife.
It's no secret how the mighty have fallen in this state. Start with Charlie Keating, Gary Driggs, Gene Rice and move down the line.
Symington has sold his entire candidacy on the premise that Arizona needs a businessman as its next governor to guide the state out of its economic slump. He touts his financial success as qualification enough for the job.
We decided to examine Symington's record.
Our probe revealed:
* Symington's Missouri Court property in Phoenix was foreclosed last October after the building's investors (led by Symington, who was the co-managing general partner of the project) defaulted on a $1.9 million loan. Several of the project's limited partnerships blamed Symington for the failure and accused him of sacrificing them to bolster his trophy project, the Camelback Esplanade.
* A few weeks later, another Symington property, the Scottsdale Centre, slipped into default when Travelers Insurance Company sued one of Symington's many limited partnerships over its failure to make payments on a $23.5 million loan to build and manage the property.
* Large blocks of the downtown Mercado--a Symington project heavily subsidized by the city, state and federal governments--remain vacant, and its tenants are frustrated with Symington's broken promises to promote the project actively.
* In total, Symington's eighteen Valley development projects and business ventures have $200 million in outstanding loan debt.
One barrier, however, to knowing whether Symington's troubled empire is any more solid than Keating's is Fife himself--he won't reveal his tax returns or financial statements, and he's not discussing any of the particulars. Now Symington's talking about our story.
Now Symington's lying.
And now we know why.
It all happens so smoothly. The candidate wears his navy blue suit, flashes his button-down smile and offers his best side to the camera. He begins by telling KTSP's Dave Patterson how the campaign's going. He tells stories of the child who sends her weekly five-dollar allowance to his campaign; of how he appears unannounced in her classroom. Patterson the interviewer is obsequious. He assures the candidate his question is posed not as a Democrat, but as a "person." Finally, the television host musters the nerve to ask Symington about the New Times article. Symington grins appreciatively. He's obviously eager to dismiss any concerns about his financial woes. The candidate then dons the look of the inconsolable patrician and fires his opening shot. "They didn't ask for a comment," Symington says with a straight face. This is his way of dismissing the questions about his business setbacks.
This is a lie.
It was told on Sunday, February 3, to the audience of KTSP's Face the State.
In fact, Darrin Hostetler, the article's author, telephoned Symington no fewer than seven times in the weeks preceding the story's publication for comment. He faxed two letters to Annette Alverez, the candidate's press secretary, requesting a telephone interview with Symington to discuss the developer's "finances." That's one nice thing about technology: We still have the fax receipt.
I even tried calling Symington twice before the story ran. Still no reply.
Sure, it's not the biggest lie we've heard from politicians lately. But it's a lie that underscores questions about Symington's integrity. What makes a candidate covet an office so completely that he'll lie to the voters? What makes Symington's lust for power so overwhelming that he'll do anything--even lie to the people--to keep his business deals a deep dark secret?
Symington tells Patterson he's having his lawyer write New Times a letter. Patterson says he'd like a copy of the letter. The talk-show host also says he'd like to travel with Symington in the final, balloon-filled days of the campaign. Sure enough, a letter from Symington's lawyer arrives. Its five pages consist of legal doubletalk, technical nitpicking and the closing admonition to "see the glass as half full and not half empty." Words of wisdom, true, but for most of us, they won't wash down at the bank.
Symington still won't talk about his financial situation, but the letter's draftsman offers himself as surrogate spokesman. I call him.
It seems the candidate's "biggest gripe" is with our statement that his company did not break ground on the Scottsdale Centre project until 1987--what one national financial analyst called a "clear miscalculation on Symington's part" given the local economic nosedive. The lawyer claims the project was actually completed sometime in 1984 when times were flush.
When I ask Bill Shore--a Symington Company lawyer who now represents the Republican's campaign committee--what he means by saying the project was "completed" in 1984, he concedes the term refers only to "the building's shell." Internal construction, he admits, is still incomplete and "will go on indefinitely." Suppose Symington's business judgment to undertake the Scottsdale Centre is right on the money. What about his decision to purchase the land at Scottsdale Road and Indian Bend in August 1989? Immediately thereafter, Symington begins construction of 120,000 square feet of office space with little to no preleasing. That's two full years after the real estate boom went bust in Arizona. With Symington by then experiencing difficulty leasing space at the Scottsdale Centre, surely he knew Scottsdale did not need another 120,000 square feet of speculative office development.
Symington's lawyer has an answer.
"That has to do with who is funding the project," Shore says. "The Japanese are funding this one."
The lawyer continues. "They look at how the project will do over the long haul."
I want to know why Symington won't discuss this issue himself. Why won't Symington simply explain to his Japanese investors that he's a candidate for governor, the public wants some assurance of his financial stability and expertise, and he wants them to waive any supposed confidentiality interest in the financial matters to satisfy the public's need to know?
The lawyer's response is telling.
Symington would never ask such a thing of his foreign financiers, Shore exclaims. For Symington has entered into a "sacred covenant" with his Japanese investors.
As it turns out, the New Times article on Symington's silence and dubious financial condition merely set the stage for a wellspring of revelations about the candidate's flaws. After we reported the pattern of foreclosure, default and debt emanating from Symington's business portfolio, cracks in the wall became giant fissures, and news of Symington's hidden business practices began to leak out.
We knew Symington's properties were saddled with more than $220 million of debt. We didn't know, however, whether his assets exceeded his liabilities. If they did, at least Symington would have a stronger claim to financial well-being. If they didn't, Symington's loudest qualification for office--his business acumen--was as empty as the Esplanade's second tower.
On February 4, the Arizona Republic reported that Symington himself had claimed his properties were worth--for 1990 tax purposes--only $64.7 million. Using Symington's own figures, his liabilities exceed land assets by $155 million. Or to rephrase the equation, his business is in a world of hurt. Though he refuses to document the claim, Symington denies that he's "upside down" in his real estate deals. But Symington likes to have it both ways. He says it's acceptable business practice to devalue property for the tax collector and inflate the figures to lure loans from lenders. Yet even using the county assessor's $120 million valuation of Symington's properties, he's still top-heavy in debt. And even assuming property assessments typically are lower than the true value of improved land, it's the magnitude of Symington's attempts to shortchange the state of his tax dollars that's breathtaking. The difference between the county's assessed value of his properties and Symington's lowball claim is as great as $55 million. A lot of school books and teachers' salaries, police protection and healthcare benefits could have been purchased with the millions of tax dollars Symington preferred to bury in his pocket last year.
Symington bristles at the notion he's a tax cheat. He likes to fancy himself a son of the Boston Tea Party. And he prides himself on the $3 million he says he paid in real estate taxes last year--even though his Democratic challenger Terry Goddard says it's half as much as it should have been.
I find Symington after his February 8 press conference. There's a document I want to speak with him about.
When Symington's shown a copy of a personal financial statement as of December 31, 1989, bearing his signature, he is taken by surprise. He puts on his reading glasses and admits the scrawl is his.
He doesn't dispute the line showing total assets of more than $17 million and a net worth of nearly $12 million. He does refer to the financial statement as an "unofficial" report.
When his attention is directed to the line indicating that the IRS owed him $18,000 that year, Symington concedes "it's possible." And when he's asked whether that means he paid no income taxes in 1989, he fumbles at first. He looks at his lawyer. Symington says he doesn't know for sure, but "it's possible."
"What does it matter?" he asks irately. "When will you people stop writing all those negative articles? Why do you need to see my personal tax returns? You know, there are only two or three people in the whole state who could understand them."
With the gavel sounds of impeachment still in recent memory, and the drum roll of criminal indictments now haunting the Arizona State Legislature, we are obliged to ask Symington tough questions. And he is obliged to answer.
We need to know whether hard economic times have hit him harder than most. If they have, we need to ask whether this state could endure a governor facing personal bankruptcy. If they haven't, we need the hard data to understand how he's managed to succeed in a market where others--straight shooters and hucksters alike--have failed.
We need to know whether Symington has pleaded with his lenders to indulge him a little longer. And we need to know if Symington, as governor, would be especially vulnerable to his lenders when issues of public importance--affecting narrow private interests--reach his desk.
Do you ever wonder how Symington would respond to banking or insurance reform legislation with his creditors at the banks and insurance companies breathing down his neck? Symington tells us his developments are helping the community. Creating jobs. Staging "world-class" developments. The candidate assures us we can "grow out of" the recession that's hammered our economy for the last forty months.
But a review of his business practices shows Symington's true colors. His personal investments in his projects are minimal. He finds money partners to put up the equity. Say, the Japanese. He finds lenders to provide the rest of the cash. Say, the now-defunct Southwest Savings & Loan Association, which at Symington's urging dropped $30 million into the Esplanade, according to a recent U.S. Senate subcommittee report.
Symington comes out on top because he's in this largely for the fees. They're what are known as the "soft costs" of any loan. As a minority investor, Symington collects the general and administrative fees. He takes the management fees for overseeing his properties. He takes the leasing fees for leasing the empty space.
The debt bomb can explode in his partner's face and he survives. To him, it's a cash-flow business, a matter of fees.
So his investors can lose. His partners can lose. The lenders can lose. The community can lose. So long as there's more office space going up next year than the year before, so long as Symington can collect his fees, he keeps making a good living.
Remember what the savings-and-loan hotshots kept saying. We can grow out of this mess. Just free our hands and give us the tools to do it.
And they grew us out of the problem all right. They grew us out of a $10 billion problem in 1986 to a $500 billion problem today.
Symington wears the same blue suit, but the Senate hearing room does not allow him to present his best side to the camera. He glares up at the chair of the U.S. Senate Judiciary Subcommittee on Antitrust, Monopolies and Business Rights.
Symington flew to Washington on February 7 expecting a reception with the president. He first got a hearing before the judiciary subcommittee instead.
Ohio Senator Howard Metzenbaum is no Dave Patterson. He doesn't ask to travel with Fife in the final balloon-filled hours of the campaign.
Instead, Metzenbaum is charging Symington with violating federal conflict-of-interest laws. The subcommittee accuses Symington of illegally arranging an investment in the Esplanade while serving as a director of Southwest Savings.
Symington sat as a director of Southwest for thirteen years, finally jumping ship in 1984--the year after the money for his trophy project, the Esplanade, was secured from Southwest.
Symington says it wasn't a loan. He claims it was a "direct investment" in the project. And that makes sense. Remember, Fife finds ways to get investors to sink cash in his projects. He's just collecting fees and building more empty offices.
At his February 8 press conference, Symington says direct investments were lawful in 1983. He gave the regulators "notice" of the deal.
"The key is disclosure," Symington explains without a trace of irony.
Symington's Southwest Savings also violated federal appraisal regulations by investing $30 million in the Esplanade, according to the subcommittee. That investment cost the taxpayers $22.6 million because the Esplanade is not worth the amount of Southwest's investment. A thirty-page report released by the Senate subcommittee spells it all out.
Symington becomes indignant. "If this is what you can expect from seeking public office, it's just not worth it," the wounded candidate tells the Senators.
He tells them something else. It's a defense tactic we've grown accustomed to.
His lawyers have helped him write another letter. This time he's writing the U.S. Attorney General. He thinks maybe Terry Goddard made Metzenbaum reach these conclusions and release the report. He doesn't like the timing. He doesn't think the public should know these things before the special run-off election.
It might spoil the celebration.
It all happens so smoothly. The candidate wears his navy blue suit, flashes his button-down smile and offers his best side to the camera.
Why won't Symington simply explain to his Japanese investors that the public wants some assurance of his financial expertise.
