Rush for Gold How Silverado Operated
August 13, 1990
Stew Webb Federal Whistleblower
Contributor to these articles
Rush for Gold: How Silverado Operated August 13, 1990
Running with a Bad Crowd October 1, 1990
By Jonathan Beaty
Rush for Gold: How Silverado Operated
August 13, 1990
By: Jonathan Beaty National Correspondent
The collapse of Denver's Silverado Banking has exposed
much more than just the questionable business relationships
of President Bush's son Neil. The fall of Colorado's No. 3
savings and loan has put the spotlight on a group of go-go
bankers and developers who, with access to Silverado's money,
built political influence in Colorado and even Washington.
Congressional investigators are just beginning to probe
the way in which Silverado was entwined in dubious deals
with M.D.C. Holdings, the state's largest home builder.
Former employees of Silverado and M.D.C. have told Time that
the home builder made improper campaign contributions to
local and national politicians. Among those donations were
payments made to the 1987 re-election campaign of Denver
Mayor Frederico Pena in the hope of ensuring that key portions
of a hugh new $ 2.9 billion airport, then still on the drawing
board, would be located on land owned by Silverado and M.D.C.
Most Denver residents welcome the 52-sq-mi. project, not only
to ease air-traffic congestion but also to provide an economic
stimulant to a city that has been nearly paralyzed since the oil
bust of the mid- 1980s. When Pena first ran for office in 1983,
he opposed the new airport, advocating instead an expansion
of Denver's Stapleton International Airport. But after he was
elected, Pena became a supporter of the popular project.
Throughout 1984, as Denver secretly negotiated with
neighboring Adams County for a new site, M.D.C. and Silverado
quietly began buying up farmland that would eventually be
selected as part of the development corridor leading to the
airport. "Despite all the millions of profits they were showing
on paper, M.D.C. and Silverado had been running on empty
for a long time, and they looked at potential profits from the
new airport as a savior," says a former key employee of
M.D.C.'s housing arm. (Richmond Homes/Richmond American)
The new owners of the potentially valuable land were members
of an emerging power elite in Denver, who proceeded to
orchestrate formidable civic support for the airport project.
The main boosters: developer Bill Walters, a colleague of
Neil Bush's and then president of the Denver Chamber of
Commerce; Michael Wise, then chairman of Silverado: and
Larry Mizel, chairman of M.D.C.
Mizel met with Pena in 1986 to urge an accelerated time-table
for the airport construction. Pena, citing a study forecasting the
creation of 20,000 new jobs, announced a plan to move up the
airport's opening date more than a year, to 1992.
When Pena entered a tight race for re-election in 1987, M.D.C.
was a principal backer.
Public records show that M.D.C. and its executives contributed
$ 34,000 to his campaign. In fact, the company funneled
additional thousands to Pena through back channels. To disguise
the extent of its political influence, former employees say,
M.D.C. coerced many of its building subcontractors into making
contributions to Pena and then allowed them to recoup the money
by submitting phony bills for construction work. Asked about these
contributions, a Pena spokesman said, "We have absolutely no
knowledge of this."
Local contractors went along with the arrangement because
M.D.C., relying heavily on junk bonds and a series of loans from
Silverado, was one of the last big developers to continue building
projects in Denver after the oil boom collapsed. "There was
little work in Denver, and M.D.C. said we would be blackballed if
we didn't go along," a contractor participant says.
According to a major building contractor, the contribution scheme
was not limited to local politics. The contractor told Time that
M.D.C. directed their company to contribute thousands of dollars
to Senators, to the Republican National Committee and to a 1986
senatorial fund raiser at which Mizel was the host and President
Reagan was a guest. Asked about these illegal contributions,
M.D.C. said it "recently became aware of assertions that some
of its employees were involved in using corporate funds to
reimburse subcontractors for political contributions."
The company said it was investigating the allegations.
M.D.C.'s Mizel and Silverado's Wise were major, aboveboard
fund raisers for Bush and Reagan, and were hosts for dinners
that netted as much as $ 1 million for the candidates.
Congressional investigators aim to find out whether, the hefty
fund raising by the Denver executives influenced federal
regulators to postpone the seizure of Silverado for almost
In the end, time ran out for the bug-clout club formed by
Denver's go-go boys. They failed to benefit from the airport's
progress because the Federal Government finally seized
Silverado six months before Denver voters gave final approval
for the giant project. ----By Jonathan Beaty / Denver
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