ARIZONA, THE SCANDAL STATE

By DAVID VAN BIEMA

Republican Fife Symington has waged two successful campaigns for Governor of Arizona by touting himself as a manager and an entrepreneur. "He told people that he'd run Arizona like a business," says state Democratic chairman Sam Coppersmith. "Every Arizonan has been praying that he didn't mean like his business."

The praying began eight months into Symington's first term, when federal prosecutors launched an investigation into the Governor's real estate-development business. Last fall Symington declared personal bankruptcy. In March a grand jury looking into his personal finances indicted two associates for bid rigging on state contracts. Capping an exhaustive five-year federal probe, that same grand jury has indicted the Governor on 23 counts, including making false statements, wire fraud, bankruptcy fraud and attempted extortion.

Symington welcomed the development. "The days of secrecy and innuendo and endless leaks are over," he told a news conference. "At long last the day in court is now near." Predicting that "a jury will judge me innocent," Symington said he had no intention of stepping down--even though he jump-started his own political career by urging Governor Evan Mecham to do so, when Mecham was indicted in 1988 (and later acquitted) for concealing a campaign loan.

An heir to the Frick steel fortune whose relatives have figured in business and government for centuries, John Fife Symington III made his local reputation as a real estate developer. But 13 of his projects went belly up. One, the Phoenix Mercado mall, was financed with $10 million from six union pension funds, which sued for repayment, eventually forcing Symington into bankruptcy.

Last week's federal indictment repeats many of the allegations made earlier by the pension funds' lawyer, Michael Manning, that there were "wild swings" in Symington's declarations of net worth, depending on whether he was trying to procure a loan or escape repaying it. At one point in 1991, according to the indictment, Symington listed his net worth at $4 million for one lender; six weeks later, he told another lender he was $4.1 million in debt. Symington's lawyer, John Dowd, calls these "unintended errors and omissions.'' To confuse the issue, Symington's wife Ann Olin Pritzlaff Symington has her own inherited wealth. "When it was convenient, they called it Ann's separate property, and when it was convenient, they called it Fife's," says Manning.

Manning suggested that Symington ran for office because he was going broke. A novel promissory note signed in 1992 between Symington and Phoenix lender Jerome Hirsch drastically scaled down the money owed if Symington were to be President when the loan came due. The indictment's count of attempted extortion charges that in trying to soften repayment terms on the $10 million union loan, Symington as Governor threatened to cancel a lucrative Arizona State University lease.

Arizonans, beaten down by the Evan Mecham and S&L king Charles Keating scandals, may have little patience for leaving Symington in office--even though in a way it seems their prayers were answered. Says Jerry Colangelo, a principal owner of the Phoenix Suns: "No one can argue that the state [isn't] in the best financial shape it has been for years."

--By David Van Biema. Reported by Richard Woodbury/Phoenix

With reporting by RICHARD WOODBURY/PHOENIX