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Silverado's Campaign Donations Investigated : S&Ls: The Colorado governor orders a grand jury probe after news reports that the failed thrift made illegal political contributions.

August 08, 1990|From United Press International

DENVER — Gov. Roy Romer on Tuesday ordered a statewide grand jury investigation into allegations that home builder MDC Holdings and the failed Silverado Banking, Savings & Loan may have made illegal contributions to political campaigns, including his own.

MDC and Silverado may have laundered political contributions to several local, state and federal campaigns by funneling the payments through subcontractors and employees, accounts in the Denver Post and the Rocky Mountain News said.

Romer said he had ordered Atty. Gen. Duane Woodard to act as a special prosecutor and convene a statewide grand jury to investigate the allegations. The Colorado Bureau of Investigation was ordered to aid Woodard's investigation.

The Democratic governor, who is up for reelection this year, also placed $32,900 in an escrow account, representing contributions his 1986 campaign received from Silverado and two developers implicated in the thrift's failure, Ken Good and Bill Walters.

Romer said he would give the money to the Resolution Trust Corp. if Woodard's investigation showed the contributions were illegal or should have gone to pay off the debt being picked up by taxpayers because of the thrift's failure in 1988.

The Rocky Mountain News said MDC "systematically pressured subcontractors for hundreds of thousands of dollars in contributions on behalf of state political candidates for at least four years."

One contractor said MDC promised to reimburse him by padding invoices on building services, the newspaper said.

Silverado's failure, which could cost the taxpayers $1 billion, has been under investigation by the government's Office of Thrift Supervision. It has become a symbol of the thrift industry debacle partly because a former director of Silverado is Neil Bush, son of the President.

"I was shocked by the allegations of laundering in numerous campaigns, including my campaign, in 1986," Romer told a news conference. "I had absolutely no knowledge of this event."

The governor said politicians are forced to raise large amounts of money and must take most of it "in good faith." He also said he had never received any contact from anyone associated with Silverado seeking favors because of the contributions.

Silverado made four contributions to Romer's campaign in 1986, totaling $15,900. The other contributions he put into escrow included $10,000 from former developer Ken Good, $6,000 from former developer Bill Walters and $1,000 from a political action committee associated with Walters' firm.

Silverado also made a $7,250 contribution to the campaign of Sen. Donald W. Riegle Jr. of Michigan in 1987. Riegle and four other senators have been implicated in the investigation of S&L figure Charles H. Keating Jr.

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