On Sundays, Sheriff Arpaio's executive assistant Tom Bearup preaches at a church in north Phoenix.
a deeply religious man committed to the power of prayer.
And it was during a prayer that he
life's true calling.
In 1980, God told Tom Bearup to run for mayor of Soldotna, a small Alaskan town where he had been a police officer for three years.
The experience exhilarated him and whetted his
appetite for more.
So, after moving back to his
native Arizona, he
volunteered to work for the Republican party.
has since used his
political contacts to land several jobs.
is an effusive, glad-handing person who resembles Danny DeVito.
says the early days of the Reagan
administration were heady.
'd made enough of an impression on the GOP from his
remote mayoral seat in Alaska that he
was considered for the ambassadorship to South Korea, where he had business contacts.
didn't get the post, but he
liked having a White House connection.
So when he
moved to Phoenix after his
started working as an advance man for President Reagan
He was also a reserve officer in the Maricopa County Sheriff's Office, sold real estate, and was a vice president of a company that wanted to develop business leads in Korea.
Then disaster struck.
In January 1987, he
was laid off when the foreign development project dried up.
Sluggish real estate sales couldn't make up the difference.
found himself in serious straits, and he
had many mouths to feed: seven children and a grandchild on the way.
In February 1987, he
stopped making payments on the mortgage of his
lender told him he
might qualify for a HUD
program that would pay off his
lender, take over his
mortgage, and allow him to pay little or nothing while he
got back on his
remembered that another Republican operative, Dwight Peterson, was with the Phoenix HUD office, so he
called and inquired about the mortgage-assignment program.
says Peterson referred him to another HUD employee who started the application process.
HUD investigators say the employee who handled Bearup
's application reported that Peterson had warned him that Bearup's application "had better be handled properly, and he implied that if the mortgage was not accepted there could be problems because Bearup was well-connected politically.
HUD accepted Bearup for the assignment program in July 1987, suspending his mortgage payments through January 1988, and then extending that period through March 1988.
would make no payments on his
house for 25 months, from February 1987 to March 1989, when he
Under HUD rules, after the initial period of suspended payments, Bearup
should have started making payments based on a formula that factored his
income and debts.
complained that he
couldn't make the payments calculated by HUD
"At that time," a loan specialist told investigators, "he
told me of other liens which he
had against the . . . property . . . I was of the opinion that he
had not fully disclosed all of his
liability information to HUD
The specialist made repeated attempts to get more financial information from Bearup
, but she
assignment was extended for an additional period to September 1988, when the loan specialist once again attempted to put Bearup
on a payment plan.
By then, however, Bearup
had applied for a job with HUD
He'd learned from his friend Peterson of an opening for a manager in the Tucson office.
The loan specialist was told Bearup's
file would be sent for servicing either to the regional office in San Francisco or to the head office in Washington, D.C.
never sent another payment-plan proposal to Bearup
Besides making no payments on his mortgage-even after taking a $40,000-a-year job as manager of the Tucson HUD office-Bearup also asked HUD for permission to sell his property and allow the buyer to simply take over payments; he didn't want to bring payments up to date.
also asked that his
original mortgage be extended by ten years.
claims that all of this was done without his knowledge, that if HUD employees such as his friend Dwight Peterson favored him because of his political status, it wasn't because Bearup had asked them to.
Red flags should have gone up at HUD
was no longer living in the house for which he
was receiving HUD
now had a $40,000 salary with HUD, and he
hadn't responded to HUD's
repeated requests for financial data.
continued to make no payments on his
Phoenix mortgage, and HUD
did nothing about it.
The loan specialist told investigators that Bearup
continually promised that he
was about to sell the house and needed just a little more time.
"My impression of Bearup
was that he
was attempting to buy time by telling me that he
had potential buyers . . . ," the loan specialist said.
got a job with HUD
, or if he
moved out of the . . . property to Tucson, HUD
should have taken those changed circumstances into consideration and adjusted his
monthly mortgage payments accordingly or possibly even called his
But that did not happen."
Finally, in March 1989, Bearup found a buyer for his house and paid off HUD.
Long after someone without HUD assistance would have lost the house to foreclosure, Bearup
had managed to pay off his
loan, and he
even turned a $3,100 profit.
told investigators that he
hadn't done anything wrong.
As manager of a HUD
office, however, he
did admit that he
should have been more concerned with appearances.
acknowledged that it didn't look good for a HUD
official to fail to make payments on his
mortgage and to refuse to supply financial information to HUD while the agency had bailed him out.
HUD investigators also examined Bearup's
purchase, and subsequent abandonment, of a market and motel in the town of Strawberry.
bought the property in July 1988, Bearup's
wife and several of his
children moved into the motel.
Investigators charge that Bearup
gave the sellers the impression he
wife would purchase the market in their names, but a week after entering escrow, the Bearups formed a corporation to buy the property, borrowing money from Bearup's
ex-wife to form the corporation and make the down payment on the market.
The market's owners told HUD investigators they felt deceived, especially after Bearup
failed to inform them in writing that he
held a real estate broker's license (such notification is required by law).
claims that he
was the one who had been deceived in the deal.
The previous owner's sales projections were erroneous, he
actions did nothing to hasten their bankruptcy.
But HUD investigators noted that Bearup
hadn't reported that he
had borrowed $25,000 for the market (Bearup claimed that it was a corporate debt, and not his
responsibility), nor did he
report any proceeds or profits from the market-all while he
was still withholding payments on his
Phoenix home with a HUD-assigned mortgage.
HUD investigators were interested in other matters as well.
After taking his
job with HUD
and moving to Tucson, Bearup
told one of his
clients-the Estes Corporation, a development firm that competed for HUD contracts-that he
needed a larger house.
The Estes employee mentioned that the company might be able to find him something.
Then, in January 1989, Bearup
wrote a letter to the Pima County Planning Commission
, criticizing the panel for requiring Estes to provide low-income housing in one of its proposed developments.
sent it, Bearup
asked a subordinate to read the letter to an Estes representative to get his
The Estes official suggested some slight changes, and the letter was sent to the commission.
The next month, Bearup
rented a home from Estes for $850 per month-$400 per month less than the previous tenant had paid.
HUD investigators noted that Bearup's
check for move-in costs bounced.
explains that the previous tenant had paid more to have access