Silverado 3a: Ken Good (Part Two) – Son of a Kansas Itinerant Minister
Neil Bush: Bit Player
Back to Ken Good, son of an itinerant Kansas Methodist minister who once owned what was described as the most expensive house in Denver (at $10 million in the 1980s), who used to show up at upscale parties in a tux and tennis shorts, etc, etc. While I gave a brief description of Good and his antics, what was missing is the role that he played in Denver’s Silverado Bank Scandal of the late 1980s, a scandal in which he was, as they say’ `a player’.
Good’s name is almost always mentioned in relation to Silverado because of his personal link to Neil Bush, President George Bush (The Elder)’s third son and President George Bush ( The Latter)’s brother. In the end Neil Bush was little more than a bit player in Silverado, – a board member manipulated by two developers, Good being the one, the other Bill Walters. Michael Wise, the whiz kid from Emporia Kansas who walked off the ninth floor of a Tampa Florida airport parking lot a few months back, added Bush to the Silverado board hoping to extract from him some political contacts with power in Washington. Bush had no experience in banking – none – nor in much else, and his oil exploration company was essentially a bust, but he got along well using his family name. He’d introduce himself to people saying `I’m Neil Bush – you know the son of the (then) Vice President’ – asshole (then and now).
Good and Walters saw more or less the same thing in Neil Bush as did Michael Wise, someone who might give them leverage especially after he became a member of the Silverado board. `Leverage’ in this case, meant access to Silverado loans. And not ones to let a good thing pass, they befriended Bush and helped him with his failing oil exploration business. Both of them could size up a sucker and knew exactly how to play him. It was easy, just loan Neil Bush money. The money loaned to Bush would be returned 20 fold in loans that Silverado would make to Walters and Good with Bush on the bank’s board.
When Neil Bush came to Denver he was able – like half of my friends who came to the city in those days – to get on at AMOCO as what is referred to as a `land man’. Land men worked for both large and small companies. There were about 50 of them working for AMOCO at the time Neil Bush was hired on. They scoured the rural areas in Colorado, Nebraska, Kansas and Wyoming trying to buy up mineral leases from farmers, ranchers and other rural residents. The job payed Bush $30,000 but got him `in’ on the domestic oil boom which was in full bloom by 1979 due to an increase in foreign crude, the latter the result of the post October 1973 OPEC oil price increase (the Kissinger deal) combined with the Iranian Revolution of 1979. As international crude oil prices increased, it became profitable once again to drill for oil domestically. The late 1970s and the early 1980s saw an `oil boom’ in Colorado not unlike the gold and silver boom of a hundred years before.
In any case, Bush was dissatisfied with his (for him) measly $30,000 AMOCO salary, and besides like a thousand and one other assholes in Denver at that time, longing to follow in his father’s footsteps and hit it big. So he quit AMOCO and set up his own exploration company – `JNB Exploration’ with two partners. Bush brought no technical or geological expertise to the arrangement, but it was assumed that his name would attract badly needed investment dollars.
Put simply, he hoped to cash in on his family name to attract capital for the company.
And in a way he did from the outset. Bill Walters chipped in $150,000 of `start up’ money for JNB, out of which Bush generously increased his salary from AMOCO’s $30,000 to $66,000 (Wilsem p.77). Walters did more. He offered Neil Bush’s JNB a $1,500,000 line of credit from Cherry Creek National Bank (that Walters owned and controlled). Bush would draw $550,000 in salary from that credit line over the next five years, although his company never did hit pay dirt. Given the dry holes JNB was drilling this wasn’t enough. Like many other start ups in those days, JNB Exploration mostly dry holes and it ran into trouble and had it followed its `Darwinian fate’, would have gently collapsed. Bush left JNB Exploration in 1989. The company had not up until that date discovered one profitable gas or oil well.
Soon though Walters introduced Bush to Ken Good, Walters’ business partner.
Ken Good was even more generous to his new friend, Neil Bush, than Walters had been.
- Good invested more than $1 million into Bush’s failing JNB Oil Exploration Company in May 1986. This kept the operation afloat `and propelled Bush’s JNB salary into six figures even though the firm never turned a profit. (SF Chronicle – 9/30/90).
- In an entirely separate business deal, Good paid Bush an additional $100,000 a year to be on Good’s development company board of directors; Gulfstream Housing Corporation – which by the way, would soon collapse. It was a curiously high salary, about four times the annual income outside directors typically receive on boards of the country’s corporations.
- In 1987. Good raised Bush’s Gulfstream salary by about $20,000 to $120,000 a year. That same year, he also provided Bush with a $22,500 tax free bonus. (SF Chronicle – 9/30/90).
- In 1984, Good loaned Neil Bush $100,000 to invest `with no strings attached’. If the investment paid off Bush got to keep the money; if it didn’t Neil didn’t have to pay it back. Isn’t that touching?
One of Ken Good’s earlier business ventures in Colorado concerned buying the land around the Centennial Race Track and developing it. Originally, the land for the race track was bought in 1948, purchased by the Hazard Ranch for $160,000. The race track opened a year later. Although some 2300o races took place there, the track never really `took off’. In 1968 it was sold to Emprise, a company run by the Jacob Brothers of Buffalo, New York but their reputed ties to the `mob’ caused continued scrutiny.
Emprise sold the track and the land surround it to Ken Good’s Talley Corporation in 1981 (note – Good had many companies) for $17.7 million, more than 100 times its original value. The sale raised some questions about Good’s ties to organized crime as well. Ken Good was not a particularly big player in the Denver real estate market at the time, and there were questions raised as to how he could put together such a big business deal and why it was that the Jacob Brothers would deal with him. (3)
In the early 1980s Good and several partners `daisy chained’ (sold it back and forth to each other, each time at a higher price) two parcels of vacant land three times in six months with the value increasing each time until they finally sold the parcels to a willing Silverado for a cool $3.2 million profit.
In such operations Walters and Good had already become two of Silverado’s most reliable customers. Both had taken out millions in loans from the bank and when, in part as a result of such loans, the bank itself ran into problems, the two of them obligingly helped recapitalize Silverado in 1984.
The recapitalization schemes were done in an interesting and dubiously legal manner exchanging bank stock for real estate, something that would have been impossible – and flatly illegal to do before deregulation. Silverado traded shares of its stock for `raw’ (undeveloped) land issuing $15 million in stock to Walters and $14 million to Good. Silverado this declared this land – much of it would later prove quite worthless – as a part of their capital assets. Cashing in the stock later, the two made $29 million on the deal while Silverado now could claim it had $29 million in assets.
Good had worked other public figures before starting his `friendship’ with Neil Bush. In the early 1980s he’d befriended Jack Kinstlinger, head of the Colorado Department of Highways whom Good invited to some of his wild parties in Vail. Shortly thereafter, Good cashed in on this friendship as the state of Colorado in the person of Kinstlinger bought a stretch of highway from Good. In the deal, Kinstlinger allegedly paid Good $2 million more than the land was worth (Wilsem -p.83). Nearly 30 years later, Kinstlinger disputes this allegation. (See Kinstlinger’s comment below).
In any case, with classic `Good will’, Good wooed her – apparently not to hard to do with expensive gifts – mink coats, jewelry – you know, the usual low level shit – and she responded quite favorably to this personal attention. But a mink coat is a small price to pay for the insider information that Herzmark gave him, especially about a company called Tosco, which was in the process of developing oil shale in Western Colorado near Rifle. Armed with what Tosco would later charge in court was `secret government information’ provided by Ms. Minkcoat, Good made a serious and unsuccessful bid at a take over of the country.
An ensuing state ethics investigation followed which found no wrong doing that included a curious note not from Governor Lamm himself, who for whatever reason injected himself in the middle of it all. The note, encouraging Good, said bizarrely, `Don’t let the bastards get you down…You’re a good guy doing good things’. Such encouragement did not dampen Good’s `entrepreneurial spirit’, but only fed it.
Actually befriending people in power was not an accidental consequence of his real estate dealing, but a part of a broader strategy on Good’s part to `do the biggest land and development deals in the state’. He wrote this in a memo to his associates as early as January 21, 1981, commenting on how he intended to make friends with anyone possessing an ounce of power to make himself one of Denver’s `key policy makers’. He thus needed to `become better acquainted with the movers and shakers throughout the state of Colorado to expand [his] political power base and influence’ (Wilsem. p.84)
Ken Meets Neil; Ken Loves Neil; Neil Loves Ken
Within a few years of Bush meeting Ken Good, in 1985, Neil Bush became a member of the board of directors of Silverado Bank and facilitated the loans to Good cited above. Bush got a bit less than $2 million from Good over the years (if I am adding right), and in exchange, Good did $77 million in business with the bank including the $53 million in loans. Good never repaid a nickel of his Silverado loans and in 1988 Silverado went under, leaving U.S. taxpayers with a $1.3 billion debt. Good milked Silverado (and a number of other banks) in order to redirect his development money to Florida, where he bought the Gulfstream Land and Development Corporation in Plantation (near Ft. Lauderdale) for $250 million. It soon collapsed, Good, with his tux tails between his legs, returned to Texas.
In order to get the rest of the money, Good had to borrow from other banks in what were increasingly complex and unstable financial arrangements. These arrangements deserve further attention because it was these additional financial interests intersect in Texas and Canada that dovetail with much larger and shadier elements – and bigger collapses – than Silverado. These financial connections raise questions about Good’s involvement with them on some level, although the exact nature of these relations remains unproven.
One final note on Good. A figure who keeps popping up like a bad penny in all this (and even more since) is Denver lawyer Norm Brownstein whose relationship with Larry Mizel and his development company MDC was explored in yesterday’s entry (“Silverado 4a: Larry Mizel, Silverado-Linked Developer and `The CELL’). Brownstein’s law firm, (today Brownstein, Hyatt, Farber and Schreck) represented Ken Good’s (and Bill Walter’s) companies as well. According to Peter Brewton, it was Brownstein that helped Good hide his money in a 174 private trusts (a la Larry Mizel). Brownstein also helped Good negotiate the purchase of Gulfstream Land & Development. For this service, Good, always obliging to those who would help him in these situations, put Brownstein on Gulfstream’s board of directors…along with Neil Bush. Again, according to Brewton, Brownstein calls all of these connections and relationships `coincidences’. (2)
In 1991, the federal Office of Thrift Supervision concluded that Bush’s deals with Good and Walters while serving on Silverado’s board constituted `multiple conflicts of interest’. He was fined $50,000 and that was about it. His family and friends in Houston took up a collection and Bush himself, it is said, never paid a penny. The story of how Neil Bush got off so easily will be told later in this series. In the end, he was little more than a patsy for the likes of Good and Walters, although, they intern might have been patsies for other, yet to be determined forces. Not clear.
Outstanding Questions…As for Ken Good, there are many unanswered questions, among them …
- how he continually was able to get financing even after he’d gone through from what I can tell – a least a half billion dollars of S&L money,
- where did the money that he loaned from Silverado wind up. The money trail dries up. A lot of it – like other S&L money simply `disappeared’ turning up in rather strange places.
- what are/were his connections to even bigger players – those with organized crime and/or CIA gun runners that worked these S&Ls in Texas, S. California, Florida. For example,
- what behind the scenes pressures was he able to utilize not to have gotten indicted – in Texas before coming to Colorado, for his Colorado dealings and for his Florida dealings with Gulfstream. Not only did he not go to prison, but he also never paid back any of his debts and, from what I could tell, his 174 trust funds set up by Norm Brownstein were not frozen or confiscated.
- I suppose the ultimate question is quite simple and concise – how could the likes of Ken Good get away with so much for so long. Did his connections with the Bush family and Colorado players like Norm Brownstein enter into it?
- And how many other Ken Goods are out there?
I can’t answer these questions. They are beyond my modest research skills. But they linger.
2. Peter Brewton. The Mafia, The CIA and George Bush. SPI books. 1992, p. 266-7
3. As for the Jacob Brothers ties to organized crime, they go back rather far to Max Jacob’s rum-running days across Lake Erie with the Mayfield Road Gang of Cleveland and the Maggadinos, bosses of Detroit and Buffalo. The Maggadinos were cousins to Joe Bonnano from Castellamare, Sicily.
Emprise fronted mob skim milked from such nice cash-cows as casinos in Cuba, Las Vegas and racetracks, etc, to ownership interest in major-league sports venues (arenas, racetracks), then leveraged debt by “loaning” money from concession stands (cash) to minority ownership of several franchises (basketball, hockey, even some baseball); did the same with concession contracts at small, money-losing racetracks like Ruidoso NM, and Centennial to take over land.
Emprise’s name continually comes up in relation to other `influence peddling’ scandals, especially in Arizona in the 1970s and 1980s.