Silverado 1 - The Michael Wise Legacy to Colorado Banking

Note:

This is the first episode in a series I hope to produce on this blog essentially about the Silverado Bank Failure of the late 1980s.

Michael Wise - The Golden Boy From Emporia Kansas - Walks The Plank

On April 8, 2009, just seven months ago, Michael R.Wise paced along the ninth story of a parking garage at Tampa International Airport. As if intending to arrange a coffee date, Wise first sent a text message to a 26 year old former employee, one Chris Copelan who had worked for Wise at CFIC Home Mortgage Co. before that company collapsed. The message said `I am looking forward to catching up with you’. Having delivered the message to cyberspace, then, taking his last long step, Wise `stepped off the side’, plunging to his death below. According to witnesses, he landed in a landscaped area with palm trees and some greenery. At 1:30 in the afternoon at a nearby hospital, Hillsborough Medical Examiner, Henry Pouge pronounced Wise dead. Having viewed a parking lot video that recorded Wise’s last moments, the airport police, ruled out any foul play.

Thus ended the life of the former CEO of Silverado Bank, perhaps Colorado's most infamous, at least to date.Wise, hailing from Emporia Kansas, where he had had a short and successful banking career, came to Denver in 1979 to take over the management of a small thrift bank, Mile High Savings and Loan in Littleton Colorado, a Denver suburb just south of the city. Under Wise's leadership, the name of the bank would change to `Silverado’, change the rules for savings and loan banking, make a fortune on an ocean of bad loans, and then unceremoniously collapse to be shut down by federal regulators nine years later in 1988.

Silverado - Gone and Mostly Forgotten

The Silverado bank scandal rocked Colorado and the nation some 20 years ago. It was a part of a much larger savings and loan fiasco that saw taxpayers footing the bill for some $500 billion to $1 trillion in losses of a deregulated and profligate savings and loan banking industry that was out of control with greed as banks loaned wrecklessly in competition with one another for bigger and bigger clients. The Silverado collapse - which cost some $1 billion - in some ways was a small chapter in a much larger picture, although it followed the overall trend. Still, at the time, it was the biggest bank failure in our state's history.

Silverado drew in, one way or another, most of the state's political figures and many of its high rollers. As President George Bush's (the elder) son, Neil, was on the board of Silverado, there was a national connection. It appears that the investigation and closing of the failed savings and loan was postponed a number of months in 1988 as to not interfer with Bush's election campaign. Some people were broken by the scandal - although it was precious few, among them Michael R. Wise, chair of Silverado. Others were able, against all odds, and probably as a result of rather sophisticated wheeling and dealing to either use the crisis as a springboard to further wealth and power, or tough it out till the storm past to come back stronger. Among the figures that were touched by the crisis were Denve Mayor Federico Pena, Colorado Governors Richard Lamm and Roy Romer, developer Larry Mizel, Gary Hart, political brokers Norm Brownstein and Steve Farber - essentially the entire political class of the state - minus a precious few personalities like Patricia Schroeder. .

The day that federal investigators swept into Silverado to seize its records and close the place down, Wise, apparently tipped off, had, at heart a coward, fled the premises, leaving a stunned and panic staff to When it was all over, Wise was charged was charged with using $500,000 of a Silverado loan for his own use, but somehow acquitted. He was never tried however for his larger responsibility in the $1 billion in losses suffered under his leadership.

Wise and Zaler

Wise escaped a prison sentence but was banned from working in the Savings and Loan industry for life. Still, like Zaler (see piece below) Wise never changed his ways. A few years later, Wise re-appeared in Aspen, having created a company called Cornerstone Private Capital which, according to Denver Post business reporter Al Lewis made `high dollar, high interest loans in the Aspen mansion market’. Despite having driven Silverado into the ground, Wise was able to attract many wealthy investors, themselves blinded with greed and their brains still up their asses, to the Cornerstone Private Capital project.

While at Silverado, Wise had given himself and his closest lieutenants hefty bonuses and huge personal loans; at Cornerstone Private Capital he simply stole the money out of the till. For this he was once again indicted and this time convicted in Federal Court of defrauding investors of some $9 million. He pleaded guilty and was sentenced to 3 ½ years in prison, spent at a federal prison camp at Leavenworth, Kansas, near his roots in Emporia. Once out of prison, Wise was hired by Chris Likens, owner of Prairie Village, a Kansas-based Nations’ Holding Co., parent company of CFIC. As the mortgage crisis intensified, CFIC collapsed, in part closed down for their practice of hiring felons, Wise being one.

Cut loose from CFIC, Wise’s future looked increasingly grim. His personal life seemed no better than his professional one. His first wife had left him for a doctor, that even before he had left Kansas for Colorado in 1979. A son died in a car wreck in 1997, his second wife dying soon thereafter. Through Likens he met another woman, remarried yet again and moved to sunny Florida, but as his job at CFIC collapsed, so did his third marriage. Economically he’d reached the end of the road. Chris Copelan,the young man Wise had text-messaged just before taking the final plunge, seemed to sum things up in a telephone interview with Denver Post business journalist, Al Lewis:

“I think he just realized that there was no way he could get back to where he wanted to be. So he just said `To the hell with it; I’m done’