Arizona governor’s fraud trial heating up _ at last
PHOENIX (AP) _ A juror snored during opening statements and even the judge couldn’t stifle a yawn at Gov. Fife Symington’s fraud trial, where witnesses have droned on for weeks about operating deficit loans, capitalization rates and other topics only an accountant would enjoy.
Now things are heating up.
After hearing from Symington sympathizers and people testifying about the minutia of his now-defunct development firm, the federal jury is finally getting to the juicy stuff: lenders who were allegedly ripped off by the governor.
Jurors leaned forward as two bankers testified that the two-term Republican deceived them to get loans by overstating his assets and understating his liabilities. Symington received loans totaling $23 million.
Lawyers have admitted from the start that making such dense information interesting _ or even endurable _ is a challenge in the case of the 51-year-old Symington, a blueblood scion of Eastern establishment wealth.
``Sometimes in white-collar trials it’s boring, no doubt about it,″ said prosecutor David Schindler. ``This is not a murder trial. You have to present the jury with the facts, and it doesn’t happen over the course of an hour of testimony.″
Symington is charged with 22 felony counts of bank fraud, attempted extortion and perjury, all in connection with his years as a Phoenix real estate developer. Conviction on even one count would force him to resign, and could bring a long prison sentence.
Prosecutors allege Symington lied on his financial statements to get loans to prop up his real estate empire, which crumbled in Arizona’s real estate crash in the late 1980s and early ’90s.
Citicorp Real Estate Inc. executive David Feingold testified that Symington misrepresented his access to nearly $800,000 in family trust funds to receive a $10.5 million loan to build an office building. When he confronted Symington about it, Feingold said, Symington denied any deceit.
Symington defaulted on the loan in 1990, but Citicorp officials didn’t foreclose in part because they feared that antagonizing the newly elected governor could affect their business in Arizona, Feingold said.
Symington never paid Citicorp because he declared personal bankruptcy in 1995, listing nearly $25 million in debts.
Symington’s lawyers say that he made mere errors on his financial statements and that the documents were not material to lenders’ decisions to advance him money. They relied instead on his reputation and past successes, defense attorney John Dowd said.
``People are human beings and they make mistakes,″ Dowd said.
But Feingold and former First Interstate Bank vice president Debra Livermore said they did rely on Symington’s net-worth statements. And Livermore left defense attorney Luis Mejia momentarily speechless when she flatly rejected his suggestion that all developers make errors on their financial statements.
``I have not been aware of any other mistakes,″ she said.
Symington’s lawyers also accuse his accounting firm, Coopers & Lybrand, of mishandling financial statements and failing to catch critical errors.
But former Coopers partner Katherine Wrigley blunted the accusation with her testimony that Symington hid damaging financial information from his accountants until he needed their help to renegotiate millions in loans.
Wrigley also testified that Symington and his accountants took unusually strict measures to make sure that a 1991 financial statement listing a minus $27.7 million net worth wasn’t made public.
Although Schindler defends the prosecution’s deliberate pace, a former federal prosecutor said the approach could hurt the government’s case.
``I think a jury appreciates it when you are to the point and don’t drag it on and fight and kill each other,″ said Mel McDonald, Arizona’s U.S. attorney from 1981 to 1984 and a state judge for seven years before that.