JOHN FIFE SYMINGTON, III

Governor of Arizona Indicted on Federal Fraud and Extortion Charges

Clinton Pardons Brother, Business Partner, Former Cabinet Official & John Fife Symington III

 

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Symington was convicted on seven counts on September 3, 1997. Is he bound for the Big House?

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

UNITED STATES OF AMERICA

Plaintiff,

V.

JOHN FIFE SYMINGTON, III,

Defendant.

CR 96

I N D I C T M E N T

[18 U.S.C. $ 1014: False
Statements to Federally
Insured Financial
1343: Wire Fraud; 18 U.S.C.
1951: Attempted Extortion;
18 U.S.C. 152: False
Statements in Bankruptcy
Proceeding; 18 U.S.C. 2(a):
Aiding and Abetting; 18
U.S.C. 2(b): Causing Act
to be Done]

The Grand Jury charges:

INTRODUCTION

At all times relevant to this indictment:

JOHN FIFE SYMINGTON, III

1. Defendant JOHN FIFE SYMINGTON, III ("SYMINGTON") was a commercial real estate developer, who developed, managed, and, through partnerships, owned interests in commercial real estate projects. The real estate projects that defendant SYMINGTON developed were owned by partnerships.

2. Defendant SYMINGTON was the sole shareholder, Chief Executive Officer, and, until April 1989, the President of The Symington Company ("TSC"). TSC was a real estate development and property management company located in Phoenix, Arizona. TSC provided development, property management, and leasing services to the real estate projects developed by defendant SYMINGTON. TSC received substantial fees and commissions for these services, a significant portion of which were paid to defendant SYMINGTON in the form of salary and distributions.

3. The majority of financing to construct defendant SYMINGTON'S real estate projects came from construction loans that were obtained from banks, savings and loan associations, and other lenders. The proceeds of these loans were disbursed over time as construction of a project progressed. Defendant SYMINGTON also obtained permanent loans, which were used in whole or in part to repay the construction on loans.

4. The construction and permanent loans that defendant SYMINGTON obtained were made tot he partnerships that owned the projects and were secured by the projects. In many instances, defendant SYMINGTON, as the developer of a project, was required by the lender to personally guarantee repayment of all or a portion of a construction or permanent loan as additional security for the loan.

5. Defendant SYMINGTON also had personal loans and lines of credit, and TSC had a line of credit that defendant SYMINGTON had personally guaranteed.

6. In April 1988, defendant SYMINGTON announced his candidacy for the office of Governor of the State of Arizona. On February 26, 1991, defendant SYMINGTON was elected Governor of Arizona.

PREPARATION AND SUBMISSION OF FALSE PERSONAL FINANCIAL STATEMENTS

7. In order to obtain construction and permanent financing for his real estate projects, and person projects, and personal and business loans and lines of credit, defendant SYMINGTON was required to provide lenders with a personal financial statement, which listed, among other things, defendant SYMINGTON's assets, his liabilities, and his net worth.

8. Lenders reviewed defendant SYMINGTON's personal financial statements to assess his success as a developer and to determine if he had the financial resources to honor his personal guarantees.

9. Between May 1986 and June 1991, defendant SYMINGTON submitted personal financial statements to various lenders that purported to present his financial condition "as of" the following dates:

a. April 1, 1986;

b. October 30, 1986;

c. March 31, 1987;

d. November 1, 1987;

e. December 31, 1987

f. December 31, 1988;

g. December 31, 1989; and,

h. December 31, 1990.

10: Defendant SYMINGTON prepared his own personal financial statements with only minor assistance from his secretary. In a number of instances, he created different versions of a personal financial statement that had the same "as of" date, but which contained different net worths. Defendant SYMINGTON instructed his secretary to maintain records for keeping track of which lender received which version of his personal financial statements.

11. Prior to submitting a personal financial statement to a lender, defendant SYMINGTON signed a certification in which he:

a. Guaranteed the accuracy of the personal financial statement with the intent that it be relied upon by the lender in extending credit;

b. Warranted that he had no known direct or contingent obligations that had not been set forth on the personal financial statement;

c. Warranted that he had not knowingly withheld any material information of an adverse nature; and

d. Agreed to notify the lender immediately, in writing, of any unfavorable change in his financial condition.

12. As defendant SYMINGTON well knew, the personal financial statements that he submitted to lenders between May 1986 and May 1991 were materially false in that they:

a. Materially overstated defendant SYMINGTON's assets;

b. Materially understated defendant SYMINGTON's liabilities; and,

c. Materially overstated defendant SYMINGTON's net worth.

13. Among other things, the personal financial statements:

a. Substantially overstated the market value of many of defendant SYMINGTON's real estate projects;

b. Substantially understated the amounts of loans outstanding against many of defendant SYMINGTON's projects;

c. Substantially overstated defendant SYMINGTON's share of the purported equity in his projects;

d. Failed to disclose that defendant SYMINGTON had sod or transferred his interest in a number of his projects.

e. Failed to disclose that defendant SYMINGTON had pledged or encumbered his interest in a number of his projects;

f. Failed to disclose, and understated, notes payable to others and amounts due to friends and relatives; and,

g. Failed to disclose that defendant SYMINGTON had personally guaranteed loans other than construction loans.

14. Defendant SYMINGTON made these false representations and omissions of material fact to create the false and misleading impression that he was a successful real estate developer with substantial financial resources available to him, and for the purpose of influencing lenders in their decisions to: (a) provide millions of dollars in construction and permanent loans for defendant SYMINGTON's real estate projects; and, (b) extend loans and lines of credit to him and TSC.

COUNTS ONE THROUGH FOUR

(18 U.S.C. 1014, 2(a), 2(b))

15. The Grand Jury repeats and realleges paragraphs 1 through 14 as if fully set forth herein.

FALSE STATEMENTS TO FIRST INTERSTATE BANK OF ARIZONA

16. At all times relevant to this indictment, First Interstate Bank of Arizona ("FIB") was a bank organized under the laws of the United States, the accounts of which were insured by the Federal Deposit Insurance Corporation.

17. In or around March, 1987, FIB agreed to make a $2,244,000 construction loan to J&F Investments X Limited Partnership ("J&F") to construct a retail shopping center known as Alta Mesa Village. Defendant SYMINGTON was a general partner of J&F, and he personally guaranteed full repayment of the Alta Mesa Village loan.

18. FIB reviewed and analyzed defendant SYMINGTON's April 1, 1986 personal financial statement in determining whether to make the Alta Mesa Village loan.

19. In or around December 1987, FIB agreed to increase the amount of the Alta Mesa Village loan to $2,500,000. Defendant SYMINGTON personally guaranteed full repayment of the increased amount of the Alta Mesa Village loan.

20. FIB reviewed and analyzed defendant SYMINGTON's March 31, 1987 personal financial statement in determining whether to increase the amount of the Alta Mesa Village loan.

21. In or around May 1988, FIB agreed to make a $10,000,000 construction loan to Mercado Developers Limited Partnership. ("MDLP") to be used to construct an office and retail complex known as the Phoenix Mercado ("the Mercado"). Defendant SYMINGTON was the general partner of MDLP, and he personally guaranteed full repayment of the Mercado construction loan.

22. FIB reviewed and analyzed defendant SYMINGTON's March 31, 1987 and November 1, 1987 personal financial statements in determining whether to make the Mercado construction loan.

23. As defendant SYMINGTON well knew, the personal financial statements that he submitted to FIB contained materially false entries as described in paragraphs 7 through 14 above.

24. From the day it opened in or around June 1988, Alta Mesa Village failed to perform as projected, and failed to generate sufficient income to make the monthly loan payments to FIB.

25. Beginning in or around march 1990, defendant SYMINGTON attempted to convince FIB to reduce the amount of his personal guarantee of the Alta Mesa Village loan, and thereafter attempted to convince FIB to release him from his guarantee.

26. Between May 1988 and June 1990, FIB disbursed approximately $8.3 million for construction of the Mercado. In June 1990, FIB was repaid approximately $7.2 million from the proceeds of a permanent loan, leaving FIB with a "shortfall" of approximately $1.1 million. Defendant SYMINGTON was responsible for the repayment of this shortfall under his personal guarantee of the Mercado construction loan.

27. Beginning in or around May 1990, defendant SYMINGTON attempted to convince FIB to delay repayment of the shortfall. In June 1990, FIB agreed to delay repayment of the shortfall for one year.

28. Beginning in or around May 1991, defendant SYMINGTON attempted to convince FIB to delay repayment of the shortfall for another two or three years, and to release him from his personal guarantee of the Mercado construction loan.

29. On or about the following dates, in the District of Arizona and elsewhere, defendant SYMINGTON knowingly and willfully made, and caused to be made, the following materially false statements to FIB, for the purpose of influencing FIB's actions as described below:

COUNT DATE FALSE STATEMENT PURPOSE
ONE
HUNG
10/86 Submission of 4/1/86 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above Obtain construction loans for Alta Mesa Village and Mercado
TWO
HUNG
9/10/87 Submission of 3/31/87 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above 1. Obtain increase in amount of Alta Mesa Village loan

2. Obtain construction loan for Mercado

THREE
HUNG
12/30/87 Submission of 11/1/87 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above 1. Obtain construction loan for Mercado

2. Comply with Alta Mesa Village loan agreement

FOUR
NOT GUILTY
7/18/91 Causing submission of letter falsely representing that preliminary agreements had been reached with permanent lender on Mercado 1. Induce FIB to extend time for repayment of Mercado construction loan shortfall

2. Induce FIB to release defendant SYMINGTON from guarantee of Mercado construction loan

COUNTS FIVE THROUGH TWELVE

(18 U.S.C. 1014, 2(b))

30. The Grand Jury repeats and realleges paragraphs 1 through 14 as if fully set forth herein.

31. During the time relevant to this indictment, Valley National Bank of Arizona ("VNB") was a bank organized under the laws of the United States, the accounts of which were insured by the Federal Deposit Insurance Corporation.

32. VNB provided loans and lines of credit to defendant SYMINGTON and TSC. As of January 1988, defendant SYMINGTON had a $600,000 personal revolving line of credit and a portion of a $600,000 loan outstanding at VNB. In addition, TSC had a $300.000 revolving line of credit, which defendant SYMINGTON had personally guaranteed.

33. VNB required defendant SYMINGTON to submit annual personal financial statements, which VNB reviewed and analyzed in determining whether to continue to extend credit to defendant SYMINGTON and/or TSC. As defendant SYMINGTON well knew, the personal financial statements that he submitted to VNB contained materially false entries as described in paragraphs 7 through 14 above.

34. In May 1988, defendant SYMINGTON submitted his December 31, 1987 personal financial statement to VNB.

35. In January 1989, defendant SYMINGTON submitted his December 31, 1988 personal financial statement to VNB.

36. In March 1989, VNB increased TSC's line of credit from $300,000 to $400,000.

37. On or about November 21, 1989, VNB agreed to make a $883,324 loan to defendant SYMINGTON, a portion of which was used to repay the outstanding balance of the earlier $500,000 loan. As part of the loan agreement, defendant SYMINGTON:

a. Falsely represented and warranted that his December 31, 1988 personal financial statement was true and correct and fairly presented his financial conditions of that date;

b. Falsely represented and warranted that there had not been any material change in his financial condition since December 31, 1988; and,

c. Promised to maintain an individual net worth of not less than $4 million during the term of the loan.

38. In May 1990, defendant SYMINGTON submitted his December 31, 1989 personal financial statement to VNB.

39. On or about July 24, 1990, VNB agreed to: (a) convert defendant SYMINGTON's $600,000 personal line of credit into a loan that would not be due until September 1`990; and, (b) convert TSC's line of credit into a loan to TSC and defendant SYMINGTON that would not be due until October 1990. To obtain these loans and extensions, defendant SYMINGTON falsely represented to VNB that there had not been any material adverse change to his financial condition since December 31, 1989.

40. On or about October 29, 1990, VNB agreed to extend the date for repayment of the joint TSC/Symington loan. To obtain this extension, defendant SYMINGTON falsely represented to VNB that there had not been any material adverse change to his financial condition since December 31, 1989.

41. In fact, two months earlier, on or about August 23, 1990, defendant SYMINGTON had advised Security Pacific Bank of Arizona ("Security Pacific") that his December 31, 1989 personal financial statement was "materially and dramatically overstated," and that he did not expect that he would be able to honor an outstanding financial obligation.

42. In addition, in September 1990, defendant SYMINGTON had represented to FIB that his net worth had dropped from approximately $11.9 million as of December 31, 1989 to approximately $4.4 million as of September 19, 1990. At the time, defendant SYMINGTON was attempting to convince FIB to release him from his personal guarantee of the Alta Mesa Village loan.

43. On or about the following dates, in the District of Arizona and elsewhere, defendant SYMINGTON knowingly and willfully made, and caused to be made, the following materially false statements to VNB, for the purpose of influencing VNB's actions as described below:

COUNT DATE FALSE STATEMENT PURPOSE
FIVE
HUNG
5/19/88 Submission of 12/31/87 personal financial statement containing materially twelve entries as described in paragraph 7 through 14 above 1. Obtain renewals of personal line of credit and loan

2. Obtain renewal of TSC line of credit

SIX
HUNG
1/20/89 Submission of 12/31/88 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above 1. Obtain renewal of personal line of credit and loan

2. Obtain renewal of, and increase to, TSC line of credit

SEVEN
HUNG
11/21/89 False representation that 12/31/88 personal financial statement was true and correct and fairly presented financial condition, and no material adverse change to financial condition Obtain $893,324 personal loan
EIGHT
HUNG
5/8/90 Submission of 12/31/89 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above 1. Comply with existing loan agreements

2. Obtain renewal of personal line of credit

3. Obtain renewal of TSC line of credit

NINE
DISMISSED BY JUDGE
7/24/90 False representation of no material adverse change to financial condition Convert personal line of credit to loan and extend repayment date
TEN
GUILTY
7/24/90 False representation of no material adverse change to financial condition Convert TSC line of credit to joint TSC/Symington loan and extend repayment date
ELEVEN
GUILTY
10/29/90 False representation of no material adverse change of financial condition Obtain extension of joint TSC/Symington loan
TWELVE
DISMISSED BY JUDGE
3/14/91 Submission of 12/31/90 personal financial statement containing materially false entries as described in paragraphs 7 through 14 above 1. Comply with loan agreement

2. Avoid being declared in default for failure to maintain $4 million net worth

3. Obtain extensions of $893,324 loan and joint TSC/Symington loan

COUNTS THIRTEEN THROUGH SIXTEEN

(18 U.S.C. 1014, 2(A), 2(B))

44. The Grand Jury repeats and repeats and realleges paragraphs 1 through 14 as if fully set forth herein.

FALSE STATEMENTS TO DAI-ICHI KANGYO BANK, LIMITED

45. At all times relevant to this indictment, Dai-Ichi Kangyo Bank, Limited, New York Branch ("DKB") was a branch of a foreign banking corporation licensed to operate under the laws of the State of New York and the Untied States. Among other things, DKB provided loans to finance commercial real estate developments in the United States.

46. In September 1983, a partnership consisting of defendant SYMINGTON and others purchased a parcel of land that later became the site for the Camelback Esplanade ("the Esplanade"), a project consisting of two office towers and a Ritz-Carlton Hotel.

47. Defendant SYMINGTON was the developer of the Esplanade, and a general partner in the partnerships that developed and owned the office towers and the hotel.

48. In May 1987, DKB agreed to make two loans totaling $77,000,000 to construct, and fund the initial operations of, the first office tower and the Ritz-Carlton Hotel.

49. In August 1988, DKB agreed to make a $50,000,000 loan to construct, and fund the initial operations of, the second office tower.

50. As part of the DKB loan documents, defendant SYMINGTON:

a. Agreed to guarantee repayment of up to $9 million of the DKB loans;

b. Agreed to be responsible, along with his partners, for the payment of the operating expenses of the office towers and the hotel;

c. Promised to provide DKB with annual personal financial statements during the terms of the loans;

d. Promised to maintain a net worth of at least $4 million at all times during the terms of the loans; and,

e. Agreed that his failure to maintain a net worth of $4 million would constitute an event of default.

51. Between May 1987 and June 1992, DKB disbursed in excess of $120 million to be used to construct and fund the initial operations of the office towers and the hotel.

52. To obtain monthly loan disbursements from DKB, defendant SYMINGTON submitted payment requests and borrower's affidavits in which he falsely certified, among other things, that his prior representations under the loan documents were still correct as of the date of the payment request, and that there had not been any occurrence constituting an event of default under the DKB loan documents.

53. As defendant SYMINGTON well knew, the payment requests and borrower's affidavits that the submitted to DKB after his election in February 1991 were materially false in that his net worth was well below $4 million, and, as a consequence, he was in default of the DKB loans.

54. In fact, on or about June 26, 1991, defendant SYMINGTON submitted, and caused to be submitted, to FIB a personal financial statement that represented that his net worth was approximately negative $4.1 million as of December 31, 1990. At the time, defendant SYMINGTON was engaged in negotiations with FIB regarding his personal guarantee of the Alta Mesa Village construction loan and the outstanding balance of the Mercado construction loan shortfall. This personal financial statement was not provided to DKB.

55. On or about July 18, 1991, defendant SYMINGTON submitted, and caused to be submitted, to FIB an unsigned personal financial statement that represented that his net worth was approximately negative $26.5 million as of May 31, 1991. This personal financial statement also was not provided to DKB.

56. In or around late July 1991, unbeknownst to DKB, defendant SYMINGTON hired Coopers and Lybrand ("C&L"), a national accounting firm, to prepare a statement of his financial condition to demonstrate to lenders that he would not be able to repay his debts or honor his personal guarantees.

57. On or about August 6, 1991, C&L completed a statement of defendant SYMINGTON's net worth was approximately negative $22.6 million as of May 31, 1991 ("the C&L statement"). Defendant SYMINGTON caused the C&L statement to be submitted to certain lenders with whom he was attempting to renegotiate his debts and/or obtain releases from his guarantees. The C&L statement was not provided to DKB.

58. On or about May 4, 1992, DKB requested that defendant SYMINGTON provided a copy of his December 31, 1990 personal financial statement. On or about May 14, 1992, defendant SYMINGTON responded by sending DKB a letter in which he falsely represented that his net worth ass of December 31, 19909 had been $5,368,000.

59. On or about the following dates, n the District of Arizona and elsewhere, defendant SYMINGTON knowingly and willfully made, and caused to be made, the following materially false statements to DKB, for the purpose of influencing DKB's actions as described below:

COUNT DATE FALSE STATEMENT PURPOSE
THIRTEEN
GUILTY
7/10/91 Submission of materially false request for advance and borrower's affidavit 1. Avoid being declared in default for failure to maintain $4 million net worth

2. Obtain a $537,754 loan disbursement

FOURTEEN
GUILTY
11/8/91 Submission of materially false request for advance and borrower's affidavit 1. Avoid being declared in default for failure to maintain $4 million net worth

2. Obtain a $761,318 loan disbursement

FIFTEEN
GUILTY
4/8/92 Submission of materially false request for advance and borrower's affidavit 1. Avoid being declared in default for failure to maintain $4 million net worth

2. Obtain a $60,223 loan disbursement

SIXTEEN
GUILTY
5/14/92 Submission of letter falsely representing that defendant SYMINGTON's net worth as of 12/31/90 had been $5,368,000 1. Prevent discovery of defendant SYMINGTON's earlier false statements

2. Defer possible legal action for undisclosed earlier default

COUNTS SEVENTEEN THROUGH TWENTY

(18 U.S.C. 1343, 2(B))

60. The Grand Jury repeats and realleges paragraphs 1 through 14 as if fully set forth herein.

THE SCHEME TO DEFRAUD CREI AND CITIBANK

61. At all times relevant to this indictment, Citicorp Real Estate, Inc. ("CREI") was a wholly owned subsidiary of Citibank, North America ("Citibank"), the accounts of which were insured by the Federal Deposit Insurance Corporation. CREI was in the business of making commercial real estate loans. From 1985 until December 1990, CREI had offices in Phoenix, Arizona.

62. Beginning in or around 1989, and continuing through at least 1992, within the District of Arizona and elsewhere, defendant SYMINGTON, aided and abetted by others known and unknown to the Grand Jury, devised, engaged in, and carried out a scheme to defraud, and to obtain money or property belonging to CREI and Citibank, by means of false and fraudulent pretenses, representations, and promises, and the concealment of material facts.

63. Defendant SYMINGTON, aided and abetted by others known and unknown to the Grand Jury, carried out the scheme to defraud as follows:

64. On or about June 12, 1989, the 5050 Building Limited Partnership ("5050 Limited") was formed for the purpose of constructing a new office building at 5050 North 40th Street in Phoenix, Arizona ("the new 5050 building"). Defendant SYMINGTON was the general partner of 5050 Limited.

65. In or around the spring of 1989, Defendant SYMINGTON applied to CREI on behalf of 5050 Limited for a $10,565,000 construction loan.

66. As part of the loan application process, defendant SYMINGTON provided CREI with his December 31, 1987 and December 31, 1988 personal financial statements. CREI reviewed and analyzed these personal financial statements in determining whether to make the loan to 5050 Limited. As defendant SYMINGTON well knew, these personal financial statements contained materially false entries as described in paragraphs 7 through 14 above.

67. Prior to the loan closing; CREI informed defendant SYMINGTON that it would not make the loan unless he, TSC, and 5050 Limited agreed that they would, at all times throughout the term of the loan, have $500,000 in cash or cash equivalent assets available to them.

68. In response, defendant SYMINGTON falsely represented to CREI that the $650,000 in "readily marketable securities" listed on his December 31, 1988 personal financial statement were available to him, concealing the following material facts from CREI:

a. Defendant SYMINGTON did not own or control the securities;

b. The securities were held in four irrevocable spendthrift trusts;

c. Defendant SYMINGTON could not sell, pledge, or assign the securities;

d. Creditors could not attach, encumber, or force the sale of the securities;

e. That while defendant SYMINGTON could petition the trustee for distributions from the trusts, the trustee had complete discretion to grant or deny a request; and,

f. The trustee could not make distributions from the trusts to help defendant SYMINGTON in his business.

69. On or about August 10, 1989, CREI made a $10,565,000 loan to 5050 Limited to finance construction of the new 5050 building. Defendant SYMINGTON personally guaranteed repayment of a portion of the loan.

70. As part of the loan agreement, defendant SYMINGTON:

a.Falsely represented and warranted that the personal financial statements previously provided to CREI were true, correct, and complete as of the date of the statements;

b. Falsely represented and warranted that his personal financial statements fairly presented his financial condition at the time they were presented;

c. Falsely represented and warranted that there had not been any material adverse change to his financial condition since the date of the last personal financial statement; and,

d. Falsely represented that he, TSC, and 5050 Limited had $500,000 in cash or cash equivalents assets (including marketable securities).

71. As a further part of the loan agreement, defendant SYMINGTON:

a. Promised to provide CREI with an annual personal financial statement within 120 days after the end of each year during the term of the loan;

b. Promised that he, TSC, and 5050 Limited would, at all times throughout the term of the loan, have at least $500,000 of cash or cash equivalents assets (including marketable securities); and,

c. Promised to provide quarterly certifications to CREI demonstrating that he, TSC, and 5050 Limited were in compliance with the preceding loan provision.

72. On or about April 30, 1990, defendant SYMINGTON submitted his December 31, 1989 personal financial statement to CREI as required by the CREI loan agreement. As defendant SYMINGTON well knew, this personal financial statement contained materially false entries as described in paragraphs 7 through 14 above.

73. On or about October 31, 1989, May 4, 1990, and September 5, 1990, defendant SYMINGTON sent letters to CREI that were intended to, and did, create the false impression that the "readily marketable securities" listed on his December 31, 1988 and December 31, 1989 personal financial statements satisfied the requirements that he, TSC, and 5050 Limited have at least $500,000 in cash or cash equivalent assets available to them.

74. Between August 1989 and June 1992, CREI distributed in accounts of $8 million in loan payments to 5050 Limited. To obtain distributions of the CREI loan; defendant SYMINGTON falsely certified to CREI on a monthly basis, through August 1991, that all of the representations contained in the loan agreement remained true and correct.

75. Following his election in February 1991, defendant SYMINGTON attempted to convince CREI that he did not have sufficient assets to honor his personal guarantee and therefore CREI should release him from his guarantee.

76. In or about September 1991, CREI received a copy of the C&L statement that reported that defendant SYMINGTON's net worth was approximately negative $22.6 million as of May 31, 1991. After reviewing the C&L statement, CREI requested a copy of defendant SYMINGTON's December 31, 1990 personal financial statement.

77. On or about November 22, 1991, defendant SYMINGTON sent CREI a letter in which he falsely represented that a December 31, 1990 personal financial statement had not been prepared. In fact, as defendant SYMINGTON well knew, he had prepared two personal financial statements dated as of December 31, 1990; one showing a net worth of approximately positive $5.3 million that had been submitted to VNB on or about May 14, 1991, and another showing a net worth of approximately negative $4.1 million that had been submitted to FIB on or about June 26, 1991.

78. On or about the dates set forth below, within the District of Arizona and elsewhere, defendant SYMINGTON, aided and abetted by others known and unknown in the Grand Jury, for the purpose of executing the above described scheme to defraud, caused the following transmissions by wire communication in interstate commerce between the District of Arizona and elsewhere:

COUNT DATE WIRE TRANSMISSION
SEVENTEEN
HUNG
7/19/90 Interstate wire transfer of $465,430 from Citibank in Delaware to 5050 Limited account at VNB in Arizona
EIGHTEEN
HUNG
11/26/90 Interstate wire transfer of $19,983 from Citibank in Delaware to 5050 Limited account at VNB in Arizona
NINETEEN
HUNG
11/22/91 Telefax from defendant SYMINGTON in Arizona to CREI in California representing that a 12/31/90 financial statement had not been prepared
TWENTY
NOT GUILTY
12/13/91 Interstate wire transfer of $350,464 from Citibank in Delaware to 5050 Limited account at VNB in Arizona

COUNT TWENTY-ONE GUILTY

(18 U.S.C. 1343, 2(B))

79. The Grand Jury repeats and realleges paragraphs 1 through as set if fully sent forth herein.

80. During the time relevant to this indictment, the Arizona Laborers, Teamsters, and Cement Masons Local No. 395, the Arizona Operating Engineers, and the Arizona State Carpenters (collectively referred to as "the Arizona labor unions") were trade unions organized and located in the State of Arizona. The Arizona labor uniform consisted of carpenters, persons, and craftsmen working in Arizona and elsewhere.

81. The Arizona labor unions established and maintained six pension funds ("the pension funds") for the purpose of providing benefits to their members.

82. MH Investment Counsel ("MH") was an investment advisor and pension fund manager located in Phoenix, Arizona. MH was in the business of providing investment advice to pension funds. From in or around 1986, until in or around December 1988. MH managed the assets of the pension funds and was responsible for investing those assets.

83. McMorgan & Company ("McMorgan") was an investment advisor and pension fund manager located in San Francisco, California. In or around January 1989, McMorgan replaced MH as the investment advisor to the pension funds. From in or around January 1989 to the present, McMorgan has managed the assets of the pension funds and has been responsible for investing those assets.

84. Beginning in or around 1987, and continuing until at least in or around October 1991, within the District of Arizona and elsewhere, defendant SYMINGTON, and others known and unknown to the Grand Jury, devised, engaged in, and carried out a scheme to defraud, and to obtain money or property in the custody and control of the pension funds and McMorgan, by means of false and fraudulent pretenses, representations, and promises, and the concealment of material facts.

85. Defendant SYMINGTON, aided and abetted by others known and unknown to the Grand Jury, carried out the scheme to defraud as follows:

86. On or about March 29, 1986, Mercado Developer Partners ("Mercado Developers") was formed to develop and own the Mercado. In or about May 1988, a new partnership called Mercado Developers Limited Partnership ("MDLP") was formed to own and operate the Mercado. Defendant SYMINGTON was the general partner of both Mercado Developers and MDLP.

87. In or around 1987, defendant SYMINGTON applied to MH on behalf of Mercado Developers for a permanent loan for the Mercado. As part of the loan application process, defendant SYMINGTON provided MH with his March 31, 1987 personal financial statement. As defendant SYMINGTON well knew, this personal financial statement contained materially false entries as described in paragraphs 7 through 14 above.

88. On or about October 13, 1987, MH issued a commitment to provide a $10,000,000 permanent loan to MDLP once construction of the Mercado was complete. The loan commitment set forth certain conditions that had to be met before the pension funds would be obligated to make the permanent loan. As part of the conditions of the loan commitment, defendant SYMINGTON:

a. Agreed to submit an updated personal financial statement to MH within 30 days of the signing of the loan commitment, which occurred on October 13, 1987;

b. Agreed to submit an updated personal financial statement to MH not more than six months prior to the closing of the permanent loan;

c. Agreed that MH had to approve his initial and updated personal financial statements; and,

d. Agreed that if he was not paying his debts as they became due, or if he became insolvent, the pension funds could terminate the loan commitment.

89. On or about November 11, 1987, defendant SYMINGTON caused his November 1, 1987 personal financial statement to be submitted to MH as required by the loan commitment. As defendant SYMINGTON well knew, this statement contained materially false entries as described in paragraphs 7 through 14 above.

90. After becoming the investment advisor to the pension funds in January 1989, McMorgan concluded that the Mercado permanent loan was not a prudent investment for the pension funds. However, McMorgan also concluded that the pension funds were required to make the permanent loan, unless MDLP or defendant SYMINGTON failed to meet any of the conditions of the loan commitment.

91. On or about May 4, 1990, defendant SYMINGTON submitted his December 31, 1989 personal financial statement to McMorgan to satisfy the condition of the loan commitment that he provide an updated personal financial statement prior to the closing of the permanent loan. The personal financial statement reported that defendant SYMINGTON's net worth was approximately $11.9 million as of December 31, 1989, which was greater than the net worth that defendant SYMINGTON had reported in his March 31, 1987 and November 1, 1987 personal financial statements that he had previously submitted to MH.

92. As defendant SYMINGTON well knew, his December 31, 1989 personal financial statement contained materially false entries as described in paragraphs 7 through 14 above, and his net worth as of December 31, 1989 and May 4, 1990 was dramatically less than $11.9 million.

93. After reviewing defendant SYMINGTON's December 31, 1989 personal financial statement, McMorgan concluded that the pension funds had no option but to fund the permanent loan. If McMorgan and the pension funds had known that defendant SYMINGTON's December 31, 1989 personal financial statement substantially overstated his net worth, the pension funds would not have made the Mercado permanent loan.

94. On or about June 27, 1990, based upon its review of defendant SYMINGTON's December 31, 1989 personal financial statement, McMorgan sent a letter to MDLP confirming that:

a. Defendant SYMINGTON's December 31, 1989 personal financial statement salified the requirement of the loan commitment that defendant SYMINGTON provide an updated personal financial statement to the pension funds prior to the closing of the permanent loan; and,

b. There had been no material adverse change to the financial condition of defendant SYMINGTON since the loan commitment was issued in October 1987.

95. On or about June 29, 1990, defendant SYMINGTON signed a personal guarantee, in which he guaranteed full repayment of the permanent loan. In the guarantee, defendant SYMINGTON:

a. Falsely represented and warranted that his December 31, 1989 personal financial statement was true and correct; and,

b. Falsely represented and warranted that there had not been any material adverse change to his financial condition since December 31, 1989.

96. In fact, three days earlier, on June 26, 1990, defendant SYMINGTON had represented to FIB that:

a. The "current depression in the real estate market" made it difficult to determine "real asset value;"

b. Any evaluation of the value of his assets was "highly subjective;"

c. His December 31, 1989 personal financial statement was only a "best efforts" evaluation of his financial condition; and,

d. The $791,000 in "readily marketable securities" listed on his December 31, 1989 personal financial statement were held in four trusts, each of which contained a "very restrictive" spendthrift provision.

97. At the time defendant SYMINGTON made these representations to FIB, he was attempting to convince FIB to defer repayment of the Mercado construction loan shortfall.

98. On or about June 29, 1990, the Mercado permanent loan closed. That day, the pension funds distributed $10,000,000, approximately $7.2 million of which was paid to FIB. Most of the balance of the permanent loan was disbursed between June 29, 1990 and July 1991.

USE OF INTERSTATE WIRES

99. On or about June 29, 1990, within the District of Arizona and elsewhere, defendant SYMINGTON, aided and abetted by others known and unknown to the Grand Jury, for the purpose of executing the above-described scheme to defraud, caused an interstate wire communication and transfer of $10,000,000 from Security Pacific in Arizona, to the Federal Reserve in California, and then to VNB in Arizona.

COUNT TWENTY-TWO NOT GUILTY

(18 U.S.C. 1951, 2)

100. The Grand Jury repeats and realleges paragraphs 1 through 6 and 80 through 98 as if fully set forth herein.

ATTEMPTED EXTORTION OF THE PENSION FUNDS AND MCMORGAN

101. At all times relevant to this indictment, the pension funds and McMorgan were engaged in interstate commerce and their activities affected interstate commerce.

102. At all times relevant to this indictment, Arizona State University ("AS") was a state university operating under a charter of the State of Arizona. As a state operated institution, AS"s budget was funded and approved by the Arizona Legislature.

103. On or about June 26, 1990, AS signed a five year lease with MDLP for space at the Mercado. Under the terms of the lease, AS could cancel the lease at any time if the Arizona Legislature failed to appropriate sufficient funds to make the lease payments. From July 1990 through at least October 1991, AS was the largest tenant of the Mercado.

104. From the day it opened in May 1990, the Mercado failed to perform as projected, and failed to generate sufficient income to make the monthly payments on the $10,000,000 permanent loan. Pursuant to the terms of his personal guarantee, defendant SYMINGTON was responsible for repayment of the permanent loan, if MDLP failed to make monthly loan payments to the pension funds as required by the loan agreement.

105. In May 1991, after defendant SYMINGTON became Governor, TSC asked McMorgan to modify the terms of the permanent loan to accept smaller loan payments. McMorgan rejected TSC's request, and informed TSC that McMorgan expected the loan to be kept current based upon defendant SYMINGTON's personal guarantee.

106. Beginning in August 1991, MDLP failed to make its loan payments to the pension funds as required by the loan agreement.

107. Between July 1991 and October 1991, defendant SYMINGTON, aided and abetted by others known and unknown to the Grand Jury, did knowingly, willfully, and unlawfully attempt to obstruct, delay, and affect interstate commerce by extortion of the pension funds and McMorgan through the wrongful use of fear and under color of official right, as follows:

108. Defendant SYMINGTON represented that he would take or withhold official action that could result in, among other things, the termination of the AS lease, unless McMorgan and the pension funds agreed:

a. To accept smaller monthly loan payments;

b. To release defendant SYMINGTON from his personal guarantee; and,

c. Not to file a notice of default and initiate foreclosure proceedings, or to delay filing a notice of default and initiating foreclosure proceedings, notwithstanding MDLP's failure to make monthly loan payments as required by the loan agreement.

109. Defendant SYMINGTON threatened to cause economic harm to the pension funds by, among other things, threatening to cause the termination of the AS lease, and threatening to steer away prospective tenants from the Mercado, unless the pension funds and McMorgan agreed to defendant SYMINGTON's demands as described in the preceding paragraph.

COUNT TWENTY-THREE HUNG

(18 U.S.C. 152)

110. The Grand Jury repeats and realleges paragraphs 1 through 14 as if fully set forth herein.

111. On or about September 20, 1995, defendant SYMINGTON filed for bankruptcy protection in United States Bankruptcy Court for the District of Arizona in a case entitled In re: J. Fife Symington III, debtor, case no. 95-8397PHXGBN.

112. On or about October 31, 1995, in the District of Arizona, defendant SYMINGTON knowingly and fraudulently made material false statements under oath in relation to his bankruptcy proceeding. Specifically, defendant SYMINGTON made the following statements under oath during the course of a debtor's examination before the bankruptcy trustee and defendant SYMINGTON's creditors, the underlined portions of which were false:

Q: Governor, is exhibit 341-04 (defendant SYMINGTON's December 31, 1989 personal financial statement) a true and accurate statement of your financial condition as of December 31, 1989?

A: I believe it is.

Q: Do you have any reason to believe that his was not an accurate statement of your financial condition?

A: I believe that it represented an accurate picture of my financial condition.

Q: Now May 4th (1990), you indicated there by your signature that you still had a positive equity in Van Buren Business Center for $400,000 correct?

A: That's correct.

Q: Was that an accurate statement of your equity value as of that point?

A: I believe it to be, yes.

Q: Any reason to believe that it was worth, significantly less than that?

A: Well it certainly turned out to be that way with most of the real estate in the Phoenix community after the great depression, but at the time I believed that to be correct.

* * *

Q: . . . You list as your equity interest in December 1989, and then again for May 1990, that your interest in Scottsdale Centre is a positive million dollars. Do you see that?

A: Yes.

Q: Was that an accurate statement of that project's value to your personal financial statement as of 12/31/89?

A: I believe that to be the case, yes . . . .

Q: Was that an accurate statement of that project's value to your personal financial statement as of May 4th 1990?

A: I believe which -- when I signed the certification on my financial statements. I was confirming that to the best of my belief and knowledge that these values were accurate values.

113. As defendant SYMINGTON well knew, the underlined statements were false in that:

a. His December 31, 1989 personal financial statement was not true and correct and did not fairly present his financial condition as of that date;

b. The value of his equity in the Van Buren Industrial Center as of December 31, 1989 and May 4, 1990 was, in fact, substantially less than $400,000; and,

c. The value of his equity in the Scottsdale Centre as of December 31, 1989 and May 4, 1990 was, in fact, substantially less than $1,000,000.


U.S. Department of Justice news release

June 13, 1996

Governor of Arizona Indicted on Federal Fraud and Extortion Charges

United States Attorney for the Central District of California Nora Manella and Phoenix FBI Special Agent in Charge Bruce Gebhardt announced that John Fife Symington III, the Governor of the Stat of Arizona, was indicted today by a grand jury in the District of Arizona in a 23-count indictment charging him with making false statements to federally insured financial institutions, wire fraud, attempted extortion, and bankruptcy fraud.

Prior to being elected Governor in February 1991, Symington was a commercial real estate developer. The indictment charges Symington with providing false personal financial statements for his real estate projects; with attempting to extort six Arizona labor union pension funds into releasing him from a personal guarantee of a $10 million loan made by the pension funds in connectin with Symington's Phoenix Mercado project; and with making false statements under oath during a debtor's examination in his pending bankruptcy case.

According to the indictment, Symington personally prepared at least eight sets of false personal financial statements from May 1986 through May 1991, and submitted these personal financial statements from May 1986 through May 1991, and submitted these personal financial statements to various lenders, including First Interstate Bank of Arizona, Valley National Bank of Arizona, Dai-Ichi Kangyo Bank, Citicorp Real Estate, Inc., and the investment advisors to the pension funds, MH Investment Counsel and McMorgan & Company.

The indictment further alleges that Symington personally prepared different versions of personal financial statements for the same date. According to the indictment, these personal financial statements presented different pictures of Symington's financial condition, depending upon whether he was seeking to obtain loans for himself, his business, or his real estate partnerships, or whether he was seeking to renegotiate the terms of outstanding debts and/or obtain his release from personal loan guarantees that he had provided to various lenders.

According to the indictment, Symington provided a December 31, 1989 financial statement, showing a net worth of approximately $11.9 million, to the investment advisor for six Arizona pension funds as part of his guarantee of a $10 million loan made by the pension funds in connection with the Mercado. As alleged in the indictment, Symington knew this financial statement dramatically overstated his net worth. The indictment alleges that the investment advisor for the pension funds had concluded that the Mercado loan was not a prudent investment, and would not have made the loan had they known that Symington's December 31, 1989 financial statement was materially false.

The indictment alleges that, in addition to providing false financial statements to Citicorp Real Estate, Inc. ("CREI"), Symington affirmatively misrepresented to CREI that his assets included over $600,000 in "readily marketable securities" that were actually held in four irrevocable spendthrift trusts over which Symington had no control. In addition, Symington is accused of misrepresenting to CREI in November 1991 that he had not prepared a December 31, 1990 financial statement, when, in fact, he had prepared two different statements for that date; one showing a positive net worth of $5.3 million and the other showing a negative net worth of $4.1 million.

According to the indictment, Symington also provided false financial statements to Valley National Bank of Arizona ("VNB">, and falsely represented to VNB in July and October 1990 that there had not been any material adverse change to his financial condition since submitting his December 31, 1989 statement. According to the indictment, Symington made these representations, notwithstanding that in June, August, and September 1990, he had informed First Interstate Bank of Arizona ("FIB") and Security Pacific Bank of Arizona that his financial condition had deteriorated significantly and that his December 31, 1989 financial statement was "materially and dramatically overstated." At the time he made these admissions to FIB, Symington was attempting to renegotiate two multi-million dollar loans with FIB that he had personally guaranteed.

The indictment also alleges that Symington made false statements to Dai-Ichi Kangyo Bank ("DKB") in order to continue to draw on loans that DKB had made to finance the development of Symington's Camelback Esplanade project. In particular, the indictment alleges that, following his election in February 1991, Symington continued to certify to DKB that he had a net worth of at least $4 million, when, in fact, he was representing to FIB at the same time that his net worth was negative $4.1 million. In addition, Symington is accused of falsely representing to DKB in May 1992 that his net worth as of December 31, 1990 was $5.3 million, notwithstanding that he had told FIB that he had a negative net worth as of that date.

The indictment further alleges that Symington attempted to extort the pension funds into releasing him from his $10 million guarantee of the Mercado loan by threatening to cause termination of Arizona State University's lease at the Mercado. According to the indictment, the Arizona State University lease was subject to cancellation if the Arizona Legislature failed to approve funds to make the lease payments.

Symington is also charged with making false statements under oath during his debtor's examination, that was conducted on October 31, 1995 in connection with his previous bankruptcy filing. In particular, the indictment alleges that Symington made false statements regarding the accuracy of his December 31, 1989 personal financial statement, and of the value of his interests in two of his most troubled real estate projects.

The indictment is the second indictment to be handed down as part of an ongoing investigation being conducted by the United States Attorney's Office for the Central District of California, acting as Special Attorneys to the United States Attorney General, and the FBI in Phoenix, Arizona. In March of this year, Symington's former Deputy Chief of Staff, George Edward Leckie, and his accountant, John David Yeoman (since deceased), were indicted on federal charges for allegedly rigging the selectin process for a state consulting contract known as "Project SLIM." Trial in that case is currently set for July 23, 1996.

United States Attorney Manella and Special Agent in Charge Gebhardt said the investigation is continuing.

Governor J. Fife Crook III


The 23-count federal indictment of Governor Fife Symington is a positive step for democracy in Arizona.

The trial will make public, and notorious, business dealings that prosecutors have exposed in grand jury confidentiality.

The only thing better than the indictment will be Symington's conviction.
Do not be misled by the dual smoke screens that are clouding the picture: The governor is not the target of a Justice Department that is out of control, as he has informed us; neither should Symington resign because he cannot govern effectively, as the morning paper claims.

To state, as the Arizona Republic did on Sunday, that Symington must resign simply because he cannot govern "effectively" in the face of these latest charges is a cynical dodge.

Governor Fife Symington must step down because he is a felon.
We know this because of his own testimony under oath, the numerous investigations of prosecutors and the years of probing by diligent reporters.

It is not acceptable for the governor to hold office, as the Republic suggests, if he could just, somehow, balance the demands of his own criminal defense and his duty to efficiently administer the state government.

Not to put too fine a point on it: Symington is a public official with a rap sheet that is growing faster than Pinocchio's nose.

When press coverage of government corruption ignores the facts, politicians accused of wrongdoing can gorge themselves on righteous indignation, as Richard Nixon did, sobbing on his knees over the unfairness of Watergate.

Governor J. Fife Symington III, indicted by the federal government last week on 23 counts, proclaimed himself not merely innocent, but the victim of a Justice Department witch hunt. The theme was repeated, at length, by Symington's attorney, John Dowd.

The posture of Symington--that all of us ought to be offended by the conduct of the prosecutors--is only possible because the news media allow him to assume it.

There is no vendetta. Governor Symington, the scion of 19th-century robber baron Henry Frick, is a crook.

He was a crook when he ran for office. He cut crooked deals once he got into office. And he and his chemical-heiress wife have given depositions, under oath, with an arrogance that you see only in those who are criminally insane or those who have inherited more silver spoons than common sense.

Governor Symington and his wife recently gave sworn testimony about how they broke election-finance campaign laws. They dumped $1.2 million of family money into Symington's race for office and masked the illegal funds as loans.

The state's largest newspaper editorialized that questions have been raised, that the Symingtons "owe the public an explanation."

That's not true.
The questions were answered, in detail, in the depositions the Symingtons gave in bankruptcy court.

It's clear to anyone who can read: They broke the law.
The governor and his wife also swindled a union pension fund out of $10 million in the Mercado development while Symington was running for office.

Symington has explained the scam in his bankruptcy deposition. The fraud is very clear and obviously illegal.

Yet Arizona's largest newspaper editorial page was silent following the testimony.

The depositions from the bankruptcy hearings are not the only public record of Symington's felonious behavior. There is also the meticulously documented Project SLIM scandal.

Once in office, Governor Symington engaged in multimillion-dollar bid-rigging by channeling state contracts to his accounting firm, Coopers & Lybrand. When the fraud was exposed by the Attorney General's Office, the state's largest newspaper did not ask its candidate to step down.

And when the federal government indicted Governor Symington, there wasn't a single editorial the following morning in the Arizona Republic. You'd have thought the news caught Republic editors by surprise.

Symington and his Washington, D.C., lawyer have been allowed to portray the governor as the victim of federal malevolence.

The facts do not support Symington's operatic lament.
The picture of Fife Symington that emerges from his deposition--his attempt to explain the massive banking fraud he engaged in--is enormously disturbing.

The drama extends beyond his illegal acts against mortgage lenders.
It is Fife Symington's character that is unsettling.
When you see how he treated family and friends, you finally understand why the white-collar fraud came so easily to him.

This is a man who took hundreds of thousands of dollars from his elderly mother with no intention of paying her back. He did the same thing to his spouse.

Symington never took step one to organize fund-raising dinners so that he might pay back the two most important women in his life, women who were unstintingly generous to him when he was desperate for their help.

What sort of man is this?
This is a man who risked his wife's freedom, drawing her into his criminal enterprise when he had her sign meaningless loan guarantees and launder illicit campaign funds.

What sort of man does that?
In the very beginning of his bankruptcy deposition, Governor Symington listed a number of debts that he did not regard as serious obligations.

Mike Toll, a man Symington described as "a very close friend," held two notes totaling $80,000. The governor did not feel particularly obligated to pay his debt.

When Toll died in an airplane crash in 1988, Fife Symington was drawing millions of dollars personally out of the Esplanade project in development fees.

Did the flush Symington pay his debt to the widow?
"This dropped through the cracks," said the governor.
Now the press tells us that perhaps Symington should resign because the indictment will distract the governor from his official duties.

No amount of media distortion or timidity can obscure a simple reality:
Fife Symington has the soul of a thief.

http://www.phoenixnewtimes.com/issues/1996-06-20/columns3.html

 

 

A grinning J. Fife Symington III steps into the 10th-floor elevator at the U.S. Bankruptcy Court, joining three reporters who are covering his civil fraud trial. Three union pension funds seek to block the bankruptcy and win an $18 million judgment against him.

"A few years ago, this is the last place I would have gone," Symington says, triggering a round of laughs. "But now, I'm just one of the guys."

All month, Symington has gone to great lengths to shed the elitist image he once projected so determinedly. Instead of evading the press, he now invites reporters to his lawyer's office for private discussions over chocolate chip cookies and soft drinks. Relaxed, jocular and using blunt language to explain his case, Symington appears to be a transformed man.

Gone, apparently, is the vindictive persona he carried as governor, which helped him ram through a conservative political agenda highlighted by a series of tax cuts. He has mellowed into an easygoing yet still immensely self-confident man.

He's free from the fear of being forced out as governor. That's happened. He's survived. And he's happy.

"I have a whole other life now that is beyond all of this," he says, referring to his erstwhile political and development careers.

During the 1980s, Symington built a real estate empire that culminated with the construction of the $200 million Camelback Esplanade and his decision to seek the governor's chair. Glory was short-lived, however, despite being elected governor in 1991. By the early 1990s, Symington was surrounded by an array of high-priced accountants, spin doctors and lawyers who'd been hired to fend off civil and criminal charges that he defrauded lenders as he climbed his way to the top. The shield worked for a while, allowing Symington to win reelection in 1994, even though voters knew he was under criminal investigation.

http://www.phoenixnewtimes.com/issues/2000-04-20/feature.html

The Earthmover and Fife

http://www.phoenixnewtimes.com/issues/2000-04-06/greene.html

 

 

Federal Prosecutors Add Two New Counts to Symington Indictment
Revised indictment strikes two counts and adds two additional ones

January 1997--The feds giveth to Fife... even as they taketh away. Earlier this month, federal prosecutors eliminated two counts and added two additional ones to the 23-count indictment charging the Governor J. Fife Symington III with financial fraud in his efforts to hundreds of millions of dollars' worth of loans.

The eliminated counts -- 9 and 10 -- charged Symington with falsely representing his financial condition in an effort to convert lines of credit to a loan, and to extend the repayment date.

The two new counts charge the governor with

  • knowingly submitting a financial statement to Mercantile Bank that "contained materially false entries and omitted material facts." Between September and November 1990 Symington had applied to Mercantile for a letter of credit to help him secure a loan from Valley National Bank.
  • making false representations in a December 31, 1990 financial statement to Valley National Bank.

In a press release responding to prosecutors' revised indictment, Symington attorney John Dowd called the new counts "nothing more than a pathetic publicity stunt aimed at prejudicing Governor Symington's right to a fair trial." The new counts are meaningless, claimed Dowd, because Mercantile Bank "did not rely on the financial statement in issuing the letter of credit" to Symington

http://www.phoenixnewtimes.com/extra/fife/twonew.html
The Fifester croons like Frank Sinatra (Jr.) at his inaugural gala.

 

Clinton Pardons Brother, Business Partner, Former Cabinet Official


Hours before his presidency ended on Saturday, Bill Clinton pardoned former Whitewater business partner Susan McDougal, brother Roger Clinton and former CIA Director John Deutch — granting clemency to a total of 140 Americans.

Photo
AP/Wide World
Susan McDougal

Other noteworthies pardoned were Housing Secretary Henry Cisneros, found guilty of making illegal payments to an ex-mistress; Patty Hearst, the 1970s kidnapping victim who later went to prison in connection with a bank robbery; and Navaho Nation chief Peter MacDonald. Another pardon was granted to former Arizona Governor Fife Symington, forced out of office after being convicted of bank and wire fraud.

The names that didn't make the list were as notable as those that did.

Among them: Webster Hubbell, a former law partner of Hillary Rodham Clinton; Jonathan Pollard, a former Navy analyst imprisoned for spying for Israel; one-time Wall Street financier Michael Milken; and Leonard Peltier, convicted of killing two FBI agents on an Indian reservation in 1975.

McDougal's pardon came just a day after the Whitewater investigation finally concluded, thanks to a deal Clinton made with special prosecutor Robert Ray. The outgoing president gave up his Arkansas law license for five years and admitted to giving false testimony under oath in the Monica Lewinsky case in return for an agreement by Ray not to indict him.

"She's absolutely delighted," said McDougal's lawyer, Mark Geragos. "She is speechless for once in her life. And I think it is especially poignant that it was one of the last acts of Bill Clinton's administration."

McDougal went to prison to forgo testifying in the Whitewater investigation.

Convicted at a 1996 trial where Clinton gave testimony in her defense, McDougal remained an unabashed supporter of the president, appearing on national television in her orange prison jumpsuit to insist that Clinton never engaged in illegal loans or other improper conduct as prosecutors in Independent Counsel Kenneth Starr's office sought to prove.

Her former husband, failed Arkansas savings and loan operator James McDougal, also was convicted at the same trial but took a markedly different path. He chose to cooperate with Starr's office and implicated the Clintons in wrongdoing before his sudden death in prison.

Susan McDougal never wavered, embarking on a campaign to portray the Starr as a politically motivated Republican who was on a "personal vendetta" to pursue the Clintons at the expense of revealing the truth. Starr and his staff repeatedly denied those allegations.

She served just 3 1/2 months of a two-year prison term for her four felony convictions before a federal judge released her because of a back problem.

But her freedom was short-lived. She defied a judge's order to answer Whitewater prosecutor's questions before a federal grand jury and was returned to jail for 18 months for civil contempt.

Frustrated that McDougal still refused to cooperate, Starr's office decided to prosecute her on criminal contempt charges for obstructing the grand jury investigation. The jury deadlocked, and prosecutors chose not to retry her.

Roger Clinton was sentenced to two years in prison after pleading guilty in 1985 to conspiring to distribute cocaine. He cooperated with authorities and testified against other drug defendants.

He has since focused on an entertainment career. The president was best man at his brother's wedding back in the mid-1990s.

 

Deutch's pardon spares the one-time spy chief and top Pentagon official from facing a criminal trial for his mishandling of national secrets on a home computer.

Deutch had been considering a deal with the Justice Department in which he would plead guilty to a misdemeanor charge of keeping classified data on his home computers.

He got in trouble as he resigned as CIA director in 1996, when agency security officials learned he had written and stored highly classified intelligence reports on home computers linked to the Internet.

Deutch publicly apologized. Pentagon officials later discovered Deutch had similar lapses in security during his tenure as the No. 2 defense official.

Cisneros was Clinton's first housing secretary. He resigned in 1996 amid an investigation into allegations that he lied to the FBI about payments he made to a former mistress, Linda Medlar. In 1999, he pleaded guilty to a misdemeanor charge.

Since leaving office, Cisneros served as head of Univision, the nation's largest Spanish-language television network. Last year, he returned to his native San Antonio to launch an organization to provide housing for low-income families.

At age 19, Hearst was kidnapped in the 1970s by the radical Symbionese Liberation Army. She later served part of a prison sentence for a bank holdup in San Francisco before it was commuted by President Carter. She is married to her former bodyguard, Bernard Shaw.

MacDonald, 72, the former leader of the Navajo Nation, has been in a Fort Worth, Texas, medical prison since his 1992 sentencing for his role in a Window Rock, Ariz., riot that resulted in the deaths of two of his supporters in 1989.

MacDonald was removed from office for taking bribes and kickbacks. The two supporters were killed on July 20, 1989, by tribal police during a march to protest what they considered a coup against their leader. MacDonald, his health deteriorating, has been serving a 14-year sentence for inciting the deadly riot.

—The Associated Press contributed to this report.

http://www.foxnews.com/politics/012001/clinton_pardon.sml

Clinton pardons Symington

MacDonald, Mechanic also get good news

Pat Flannery
The Arizona Republic
Jan. 21, 2001

Fife Symington, the story goes, rescued Bill Clinton from treacherous waves during a boozy Massachusetts beach party in the late 1960s.

On Saturday, Clinton rescued Symington.

In one of his last acts as president, Clinton granted Arizona's former Republican governor a pardon, ending Symington's prosecution on federal fraud charges.

Clinton released his last list of 176 pardons and commutations just hours before President Bush was sworn in Saturday. Others winning "Get out of jail free" cards were Clinton's half-brother, Roger, imprisoned former Navajo Chairman Peter MacDonald, and onetime fugitive and anti-war activist Howard Mechanic of Scottsdale.

Not even Symington knows why Clinton included him on the pardon list, but he said it's likely more than the rescue. Clinton, he said, had been following his case and may have felt an affinity for a politician with legal trouble.

In September 1997, Symington resigned as governor after being convicted by a federal jury on seven counts of fraud. Prosecutors said Symington falsified statements submitted to lenders in connection with real estate loans. The conviction was overturned in 1999, and prosecutors were still deciding whether to retry him.

 

Clinton Pardon's List

The Associated Press
Saturday, Jan. 20, 2001; 1:52 p.m. EST

A list of the people pardoned or commuted Saturday before President Clinton left office, as released by the White House:

 

COMMUTATIONS:

Benjamin Berger

Ronald Henderson Blackley

Bert Wayne Bolan

Gloria Libia Camargo

Charles F. Campbell

David Ronald Chandler

Lau Ching Chin

Donald R. Clark

Loreta De-Ann Coffman

Derrick Curry

Velinda Desalus

Jacob Elbaum

Linda Sue Evans

Loretta Sharon Fish

Antoinette M. Frink

David Goldstein

Gerard A. Greenfield

Jodie E. Israel

Kimberly Johnson

Billy Thornton Langston Jr.

Belinda Lynn Lumpkin

Peter MacDonald

Kellie Ann Mann

Peter Ninemire

Hugh Ricardo Padmore

Arnold Paul Prosperi

Melvin J. Reynolds

Pedro Miguel Riveiro

Dorothy Rivers

Susan Rosenberg

Kalmen Stern

Cory Stringfellow

Carlo Anibal Vignali Jr.

Thomas Wilson Waddell III

Harvey Weinig

Kim Allen Willis

 

PARDONS:

Verla Jean Allen

Nicholas M. Altiere

Bernice Ruth Altschul

Joe Anderson Jr.

William Sterling Anderson

Mansour Azizkhani

Cleveland Victor Babin Jr.

Chris Harmon Bagley

Scott Lynn Bane

Thomas Cleveland Barber

Peggy Ann Bargon

David Roscoe Blampied

William Arthur Borders Jr.

Arthur David Borel

Douglas Chrles Borel

George Thomas Brabham

Almon Glenn Braswell

Leonard Browder

David Steven Brown

Delores Caroylene Burleson, aka Delores Cox Burleson

John H. Bustamante

Mary Louise Campbell

Eloida Candelaria

Dennis Sobrevinas Capili

Donna Denise Chambers

Douglas Eugene Chapman

Ronald Keith Chapman

Francisco Larois Chavez

Henry G. Cisneros

Roger Clinton

Stuart Harris Cohn

David Marc Cooper

Ernest Harley Cox Jr.

John F. Cross Jr.

Reickey Lee Cunningham

Richard Anthony De Labio

John Deutch

Richard Douglas

Edward Reynolds Downe

Marvin Dean Dudley

Larry Lee Duncan

Robert Clinton Fain

Marcos Arcenio Fernandez

Alvarez Ferrouillet

William Dennis Fugazy

Lloyd Reid George

Louis Goldstein

Rubye Lee Gordon

Pincus Green

Robert Ivey Hamner

Samuel Price Handley

Woodie Randolph Handley

Jay Houston Harmon

John Hummingson

David S. Herdlinger

Debi Rae Huckleberry

Donald Ray James

Stanley Pruet Jobe

Ruben H. Johnson

Linda Jones

James Howard Lake

June Louise Lewis

Salim Bonnor Lewis

John Leighton Lodwick

Hildebrando Lopez

Jose Julio Luaces

James Timothy Maness

James Lowell Manning

John Robert Martin

Frank Ayala Martinez

Silvia Leticia Beltran Martinez

John Francis McCormick

Susan H. McDougal

Howard Lawrence Mechanic

Brook K. Mitchell Sr.

Samuel Loring Morison

Charles Wilfred Morgan III

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Vernon Raymond Obermeier

Miguelina Ogalde

David C. Owen

Robert W. Palmer

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Richard H. Pezzopane

Orville Rex Phillips

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Norman Lyle Prouse

Willie H.H. Pruitt Jr.

Danny Martin Pursley Sr.

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William Clyde Ray

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Ildefonso Reynes Ricafort

Marc Rich

Howard Winfield Riddle

Richard Wilson Riley Jr.

Samuel Lee Robbins

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Michael James Rogers

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Adolph Schwimmer

Albert A. Seretti Jr.

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Stephen A. Smith

Jimmie Lee Speake

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