Symington convicted
RHONDA BODFIELD and DAVID MADRID Citizen Staff Writers
PHOENIX – Fife Symington today was convicted of seven felony counts, becoming the first Arizona governor found guilty of a serious crime while in office.
Because of the conviction, Symington, the state’s 23rd governor, must step down under state law. He was first elected in 1990.
A U.S. District Court jury that began deliberating Aug. 8 made history when it found the Republican two-term governor had committed bank and wire fraud.
He was acquitted of three counts, and the jury deadlocked on 11 counts. The jury failed to convict the governor of perjury and extortion charges.
As the verdict was read about 1:25 p.m., Symington showed no emotion.
Afterward, Symington was surrounded by his family, who attended every day of the lengthy trial.
Symington could face prison time and a fine, though exact figures were not available yet. Had he been convicted of all counts, he would have faced a maximum of 300 years in prison and $14 million in fines.
Many courtroom observers anticipated a conviction.
After 74-year-old Mary Jane Cotey was dismissed from the jury last month after deliberations began, she indicated her fellow jurors were leaning heavily toward conviction. A juror was added to replace her, and deliberations began over again. The trial began May 13.
Renewed deliberations were in their 10th day when word came late this morning that jurors had reached verdicts on some counts, but had deadlocked on others.
Judge Roger Strand, after polling individual jurors, said he would declare a mistrial on the deadlocked counts and have the jury offer its verdict. He sent jurors from the courtroom to fill out verdict forms.
This afternoon, jurors filed back into the courtroom and their decision was read.
Symington was indicted in June 1996 on 23 felony counts. He was accused of fraud and submitting false information to lending institutions to get more loans or to renege on financial obligations.
Two of the counts were dropped during the trial, but remaining counts included accusations that he tried to extort union pension funds and that he committed perjury in a bankruptcy court proceeding.
The charges stemmed from Symington’s activities as a Phoenix real estate developer.
On the day of the indictment, a bitter Symington choked back emotion and declared that a jury would find him innocent.
During the trial, he testified he made many mistakes in his financial dealings. That was because he prepared his financial statements by memory, he said.
In his defense, he said he was a big-picture developer who didn’t focus on the small stuff, with financial statements being low priority.
He blamed his accountants for not catching his mistakes. And he blamed a real estate crash for his values not panning out.
But in the end, the jury didn’t completely believe him.
Before the verdict, Symington had been upbeat in recent days.
He said last week: ”Initially, (when the jury began deliberating) you get butterflies in your stomach, but, as I say, I’m really at peace about this whole thing. I’ve said from the very beginning, I looked forward to being on a level playing field and telling my story and I’ve had that opportunity and I’m at peace.”
At the same time, he stressed he hadn’t given up the fight.
Rather, he focused on policy issues and keeping active.
”I’m doing my hiking. I’m fit. I’m down to my college weight (180) and I’m in a fighting mood.”
Whether the jury’s decision was politically colored may never be known. Of the 12jurors, half voted for Symington in the past and both major political parties had exactly five members on the jury.
Jurors said as they were selected that they could disregard Symington’s status as governor.
Many trial followers have speculated that a single legal definition – not politics – affected the outcome more.
The trial judge’s definition of ”materiality” – that Symington statements could have influenced a bank as opposed to the more stringent definition requiring the bank to actually have been influenced – may have made a conviction easier.
As a convicted felon, Symington must relinquish control of the state to Secretary of State Jane Dee Hull, a Republican.
Hull, the first woman to hold the position of speaker of the House, has declined interviews with the press but has met with Symington and state policy leaders to discuss an orderly transition.
How soon he will have to vacate the office – whether immediately or when the judge formally enters the final order on the conviction over the next few weeks – still is being determined by the Attorney General’s Office.
The governor’s staff at first indicated he would leave office within 72 hours of a conviction, but last week announced that because of the juror controversy, in which Cotey was dismissed, he may try to stay in office until his sentencing, which could happen within the next two to nine months.
A new juror was added after Cotey’s removal, and deliberations began over again. Prosecutors argued for her removal after other jurors complained they could not work with her and she did not grasp arguments.
The verdict wrapped up a trial that dragged on for months.
THE VERDICTS
COUNT 1: October 1986 submission of an April 1, 1986 personal financial statement containing false entries to obtain a construction loan from First Interstate Bank for Alta Mesa Village and the Phoenix Mercado. DEADLOCK
COUNT 2: Sept. 10, 1987 submission of a March 31, 1987 personal financial statement containing false entries to obtain an increase in the First Interstate loan amount for Alta Mesa Village and to obtain a construction loan for the Mercado. DEADLOCK
COUNT 3: Dec. 30, 1987 submission of a Nov. 1, 1987 personal financial statement containing false entries to obtain a construction loan from First Interstate for the Mercado and to comply with the Alta Mesa Village loan agreement. DEADLOCK
COUNT 4: Causing the July 18, 1991 submission of a letter falsely representing that preliminary agreements had been reached with McMorgan & Co. on the Mercado. The purpose of the letter, prosecutor’s say, was to persuade First Interstate to extend time for repayment of the Mercado construction loan shortfall and to release Symington from his guarantee on the Mercado construction loan. NOT GUILTY
COUNT 5: Submitting a Dec. 31, 1987 personal financial statement on May 19, 1988 that contained false entries to obtain renewals of a personal line of credit and loans from Valley National Bank and to obtain a renewal of The Symington Co. line of credit. DEADLOCK
COUNT 6: Submitting a Dec. 31, 1988 personal financial statement containing false entries to obtain a renewal of a personal line of credit and The Symington Co. line of credit from Valley National Bank on Jan. 20, 1989. DEADLOCK
COUNT 7: Falsely representing on Nov. 21, 1989, that his Dec. 31, 1988 personal financial statement was true and correct and that there had been no material adverse change to his financial condition since Dec. 31, 1988. Symington is accused of making the false representation to obtain a $893,324 personal loan from Valley National Bank. DEADLOCK
COUNT 8: Submitting a Dec. 31, 1989 personal financial statement on May 8, 1990 containing false entries to comply with an existing loan agreement, to obtain renewal of a personal line of credit and The Symington Co. line of credit from Valley National Bank. DEADLOCK
COUNT 9 (DROPPED): Failure to disclose adverse changes in his financial condition to obtain an extension of a joint Symington and The Symington Co. loan at Valley National Bank.
COUNT 10: Submitting a Dec. 31, 1990 personal financial statement on May 14, 1991 containing false entries to comply with an existing loan agreement, to avoid being declared in default of a loan for failing to maintain a $4 million net worth and to obtain extensions of $893,324 in a personal loan and a joint loan of The Symington Co. and Symington. GUILTY
COUNT 11: Making false representations June 24, 1991, to Valley National Bank that his Dec. 31, 1990 personal financial statement remained true and correct and that there had been no material adverse change in his financial condition since Dec. 31, 1990. Symington was accused of filing the false statement to obtain an extension and modification of an $893,324 personal loan. GUILTY
COUNT 12 (DROPPED) Submitting a Dec. 31, 1989 personal financial statement that contained false entries and falsely represented that it remained correct to obtain a $300,000 letter of credit from the Mercantile Safe Deposit and Trust Co.
COUNT 13: Submitting a false request July 10, 1991, to Dai-ichi Kangyo Bank for an advance and a borrower’s affidavit to avoid being declared in default of a loan for failure to maintain a $4 million net worth and to obtain a $537,754 loan disbursement. GUILTY
COUNT 14: Submitting a false request Nov. 8, 1991, to Dai-ichi Kangyo Bank for an advance and a borrower’s affidavit to avoid being in default for failure to maintain a $4 million net worth and to obtain a $761,318 loan disbursement. GUILTY
COUNT 15: Submitting a false request and borrower’s affidavit to Dai-ichi Kangyo Bank April 8, 1992, for an advance to prevent discovery of his earlier false statements and to defer possible legal action for not disclosing an earlier default. GUILTY
COUNT 16: Submitting a May 14, 1992 letter to Dai-ichi Kangyo Bank falsely representing a net worth as of Dec. 31, 1990, of $5.3 million to prevent discovery of earlier false statements and to defer possible legal action for an undisclosed earlier default. GUILTY
COUNT 17: A wire fraud charge for a July 19, 1990 interstate wire transfer of $465,430 from Citibank in Delaware to an account at Valley National Bank in Arizona. DEADLOCK
COUNT 18: A wire fraud charge for a Nov. 26, 1990 interstate wire transfer of $519,983 from Citibank in Delaware to an account at Valley National Bank in Arizona. DEADLOCK
COUNT 19: A wire fraud charge in connection with a Nov. 22, 1991 fax sent to Citicorp in California that indicated Symington had not prepared a Dec. 31, 1990 financial statement. DEADLOCK
COUNT 20: A wire fraud charge for a Dec. 13, 1991 interstate wire transfer of $350,464 from Citibank in Delaware to an account at Valley National Bank in Arizona. NOT GUILTY
COUNT 21: A wire fraud charge for a June 29, 1990 interstate wire communication and transfer of $10 million from Security Pacific Bank in Arizona to the Federal Reserve in California and then to an account at Valley National Bank in Arizona. GUILTY
COUNT 22: Attempting to extort McMorgan & Co.’s six pension funds by threatening to cause economic harm to the pension funds in an effort to be released from his loan guarantee and to prevent default and foreclosure proceedings. NOT GUILTY
COUNT 23: A charge of lying under oath in a Oct. 31, 1995 bankruptcy proceeding. DEADLOCK
Vindicated Goddard among winners
WINNERS
U.S. ATTORNEY’S OFFICE: Federal prosecutors took a gamble in indicting a sitting Republican governor, despite charges of political vendettas. Verdicts were vindication.
JANE DEE HULL: Secretary of State has a new job and, conceivably, an enviable position during the next election cycle if she wants it.
PENSION FUNDS: Symington’s conviction could make it easier to prove in his bankruptcy court proceedings that he attempted to defraud union pensioners when he took out a $10 million loan, and thus not eligible for debt forgiveness.
TERRY GODDARD: Vindicated after warning voters in the 1990 election cycle that Symington’s finances were unraveling.
LOSERS
SYMINGTON: Second governor in succession to be removed from office. Could face jail time and must vacate his office. His campaign promise of ”running state government like a business” is now fodder for farce.
SYMINGTON STAFF: Symington’s staff, especially his upper Cabinet, could be looking for jobs, with a new team coming in for Jane Dee Hull.
ARIZONA: Another black eye for the state, after first black eye from the impeachment and indictment of Gov. Evan Mecham. With two black eyes, Arizona now looks like the Lone Ranger.
COOPERS & LYBRAND: Conviction did nothing to help the accounting firm’s image, which was tarnished by the governor’s allegations it did a shoddy job compiling financial records.
Symington biography
• Aug. 12, 1945 – Born in New York City; later raised in Maryland.
• 1968 – Graduated from Harvard University, joined the U.S. Air Force and is assigned to Luke Air Force Base in Arizona as a second lieutenant.
• 1970 – Assigned to the 621st Tactical Air Command, Udorn, Thailand.
• May 22, 1971 – Awarded Bronze Star for meritorious service.
• 1972 – Received an honorable discharge as an Air Force captain.
• Mid-1972 – Named to the board of directors of Southwest Savings and Loan Association.
• Feb. 7, 1976 – Married Ann Pritzlaff. They go on to have three children: Whitney, Richard and Tom. Symington has two sons from a former marriage: Fife IV and Scott.
• 1976 – Founded The Symington Co.
• September 1983 – Appointed to American Savings and Loan Association board of directors, a Salt Lake City, Utah, thrift.
• Jan. 20, 1984 – Left Southwest Savings board.
• April 1989 – Announced he is running for governor and promises to run the state like a successful business.
• Feb. 26, 1991 – Symington is elected governor after winning a runoff election against Terry Goddard.
• 1994 – Symington is re-elected, defeating grocery chain owner Eddie Basha.
The trial’s key players
DAVID SCHINDLER
• Occupation: Assistant U.S. attorney and lead prosecutor.
• Age: mid-30s (declined to divulge age to The Associated Press)
• Education: Bachelor’s degree, University of CaliforniaBerkeley, 1983; law degree, University of California-Los Angeles 1987.
• Background: After stint in private law practice, joined U.S. Attorney’s Office in Los Angeles in 1989. Has specialized in prosecuting bank fraud, computer fraud and securities fraud.
In 1993 won fraud convictions against financier Charles W. Knapp and two associates in the collapse of Phoenix-based Western Savings, once the nation’s largest thrift.
Notable computer fraud prosecutions include that of Kevin Mitnick, called the ”Billy the Kid” of hacking for evading authorities for three years after stealing millions of dollars in software from high-tech companies, damaging University of Southern California computers and using stolen computer passwords.
Schindler got involved in Symington case when prosecution was transferred to the U.S. Attorney’s Office in Los Angeles because Arizona’s U.S. attorney wanted to avoid the appearance of a conflict of interest.
• Quote before the verdict: ”We are going to ask you to tell the defendant to stop lying, to start playing by the same rules we all play by.” – In opening trial statement.
ROGER G. STRAND
• Occupation: U.S. district judge.
• Age: 63.
• Education: Bachelor of arts from Hamilton College, 1995; law degree, Cornell University Law School, 1961.
• Background: After a stint in private practice in Phoenix was appointed to the Arizona Superior Court by Gov. Jack Williams in 1968 and served until 1985, when President Reagan appointed him to U.S. District Court for Arizona.
JOHN M. DOWD
• Occupation: Attorney for Gov. Fife Symington.
• Age: 55.
• Education: Bachelor’s degree, St. Bernard College, 1963; law degree, Emory University Law School, 1965.
• Background: High-powered Washington, D.C., lawyer who has helped Symington fight government prosecutors since 1990.
Prosecuted Mafia figures during 10 years with the U.S. Justice Department and also investigated misconduct charges involving the FBI and Director J. Edgar Hoover in 1976.
Entered private practice in 1978; recruited in 1989 by former major league baseball commissioner Bart Giamatti to investigate gambling scandal involving Pete Rose, which led to the former Cincinnati Reds star being banned from baseball.
• Quote before the verdict: ”The allegations have no merit. The federal government seeks to punish, with the force of a criminal prosecution, what are no more than unintended errors and omissions in personal financial statements. None of (Symington’s) mistakes caused any harm or loss to any lending institution.”
Source: The Associated Press
Sitting governors indicted this century
The Associated Press
• Fife Symington of Arizona, indicted in June 1996 on federal charges alleging he defrauded lenders in his former career as a real estate developer.
• Jim Guy Tucker of Arkansas, indicted in June 1995 on charges of obtaining $300,000 in Small Business Administration loans under false pretenses; announced resignation May 28, 1996.
• David Walters of Oklahoma, September 1993, on a misdemeanor campaign law violation. Admitted in a plea bargain that he encouraged a contributor to give more than the legal $5,000 maximum. Eight felony counts dismissed. Fined $1,000 and agreed to contribute $135,000 to the state Ethics Commission.
• Guy Hunt of Alabama, convicted and forced from office in April 1993 for looting his 1987 fund and pocketing the money. He was ordered to pay $211,000 and perform 1,000 hours of community service.
• Evan Mecham of Arizona, 1988, on fraud and perjury charges for allegedly hiding a campaign loan. A jury acquitted him, but only after he faced an impeachment trial by the state Senate on other grounds and was removed from office.
• Edwin Edwards of Louisiana, 1985, on federal racketeering charges in connection with nursing home and hospital projects. First trial ended in a hung jury; acquitted in 1986; voters returned him to office in 1991.
• Marvin Mandel of Maryland, 1975, charged with five others in a federal mail fraud and bribery case. Served 14 months in prison.
• Arch A. Moore Jr. of West Virginia, 1975. Acquitted of extortion in 1976 but pleaded guilty to federal corruption charges in 1990, after he left office.
• Warren R. McCray of Indiana, convicted in 1924 of using the mail to misrepresent his holdings in letters to banks regarding loans. Served three years in prison and received a full pardon from President Hoover in 1930.
• Ed Jackson of Indiana, tried in 1928 on charges of conspiracy to bribe. Cleared because the statute of limitations had run out.
• William L. Langer of North Dakota, removed from office in 1934 by the state Supreme Court after being convicted of obstructing the administration of the Federal Emergency Relief Administration and soliciting money from federal employees for personal political purposes. Was tried four times and eventually cleared of wrongdoing. Re-elected in 1936.
PHOTO CAPTION: Citizen file photo
Gov. Fife Symington has said he would be at peace no matter what the verdict.