Governor of Arizona, 11 Others Sued : Thrift: The Resolution Trust Corp. contends that negligence by Fife Symington and other ex-officers of Southwest S&L; contributed to its failure.

From Times Staff and Wire Services

Arizona Gov. Fife Symington and 11 other former officers and directors of one of the state’s failed savings and loans were sued Monday for negligence by the federal agency cleaning up the thrift industry mess.

The Resolution Trust Corp.'s civil lawsuit, filed in U.S. District Court in Phoenix, parallels an FBI criminal investigation into the 1989 collapse of Arizona’s Southwest Savings & Loan in Phoenix.

It seeks $140 million in damages from the former officials and eight of their wives. Overall, the lawsuit identifies six loans approved by the thrift’s board that caused “substantial” losses.

The case is the latest financial scandal to touch a top government official in Arizona. Former Republican Gov. Evan Mecham was impeached in 1988. And the state’s two U.S. senators were criticized by the ethics panel for dealings with thrift owner Charles H. Keating Jr.


Symington was a member of Southwest’s board in 1983 when it approved spending $30 million to buy the land that was to become the Camelback Esplanade hotel-office-retail complex, a Symington development.

He refrained from voting but made a presentation to the board on the matter. Southwest got approval that year to finance the Camelback project. Symington collected about $8 million in developer fees for the project, the RTC said. He resigned from the board in 1984.

The agency added that Southwest stands to lose $38 million--$52 million when interest costs are included--from the venture. The suit also identifies seven other loans or investments estimated to have cost Southwest more than $115 million. The RTC charged that the losses are “directly attributable” to those named in the suit.

Southwest’s collapse is expected to cost taxpayers as much as $941 million. Questions about it dogged Symington, a Republican who was a real estate developer before his election early this year, throughout his campaign.


Symington didn’t immediately respond to the lawsuit. It has been expected for some time, and on Sunday, he called it “typical of Washington run amok. . . . I’m not, frankly, concerned about it, because there’s no criminal activity there.” He plans to hold a news conference this week to rebut the charges.

His personal attorney, Jim Vieh, denies the allegations.

“The allegations against Gov. Symington are totally groundless and without merit,” Vieh said in a statement. “This is a political hatchet job. The facts will vindicate the governor. And moreover, the complaint raises some serious questions about the conduct of the RTC in Arizona and nationally.”

Jack Callahan, a spokesman for the FBI in Phoenix, said the case was referred to the FBI about six weeks ago, and the investigation is continuing. There is no deadline for completing the Symington investigation, he said.


Symington won a special election for governor last February. The ballot was taken after he and former Phoenix Mayor Terry Goddard, a Democrat, split the vote 50-50 in a November, 1990, election.

Symington has vowed to improve Arizona’s image, which has been tarnished by a variety of scandals and other developments that have shaken the state’s top politicians, including the impeachment of Mecham. Voter rejection of a state-paid Martin Luther King Jr. holiday generated ill feelings across the state.

And the U.S. Senate Ethics Committee probed Arizona’s two senators and their relationship with Keating, former head of Lincoln Savings & Loan and its parent company, American Continental Corp. Sens. Dennis DeConcini, a Democrat, and John McCain, a Republican, were criticized but not punished by the ethics panel.

Keating has been charged with bank fraud by a federal grand jury in Los Angeles and was convicted earlier this month of state fraud violations stemming from the sale of American Continental bonds at Lincoln branches.