Silverado 8 – Larry Mizel and Spencer Browne

March of 1991 was not an especially good time for Larry Mizel and MDC Holdings, Inc. In fact both Mizel and closest associates at MDC were, to put it somewhat inelegantly, knee deep in their own shit.

• Federal and state investigators were nipping at their heels; there were Congressional hearings taking place.
• MDC was the subject of separate investigations by the Denver Election Commission and FBI over allegations of laundering campaign contributions to different local, state and national political candidates.
• Add to that, Colorado Governor Roy Romer had also ordered a state investigation of MDC’s (along with Silverado’s) political fund-raising activities. As a result Mizel was being investigated by the Colorado Bureau of Investigation. He was lucky – or perhaps it was not simply luck – that a state grand jury had not been called to delve into the matter
• Officers of Silverado, including the bank’s president and CEO were facing possible indictments as was Neil Bush, Silverado board member and son of the then-sitting President George (the elder) Bush
• The shyster developers who had absconded with tens – if not hundreds – of millions of dollars in Silverado toxic loans had scattered to the winds. Gary Talley was hiding out in Arizona, Ken Good had moved on to Florida and soon thereafter to Texas, Bill Walters was now working Southern California and Las Vega. Richard Rossmiller, Silverado’s largest borrower, was facing legal challenges in a number of states. He would soon be indicted and convicted to four years in a federal penitentiary in association with loans taken from a Pennsylvania savings and loan – Hill Savings and Loan

Mizel and other MDC higher ups intimately involved with Silverado on a number of levels appeared to have their heads too on the chopping blocks. It seemed that Larry Mizel’s breath-taking 1980s profit run was about to collapse all around him. That in the end Mizel did escape not only jail time but also financial ruin is both a testament to his shrewdness and a measure of the acumen and political savvy of the law firm that stood by him during those difficult years, Brownstein, Hyatt and  Farber.

When the Silverado investigations, indictments were all over, MDC came out of it all quite well. One of the Mandarich brothers spent a few months in jail. There were hefty fines the company was forced to pay. The sub-contractors that MDC fingered, some of whom served prison time, might still curse Mizel’s name, along with a few business reporters still in Denver who covered the Silverado case at the time, but Mizel himself did not spend a day in prison and MDC soon left the Silverado mess behind, so much so that it is today, except in certain rarified circles, long forgotten.

How did he do it?

I’m not sure the whole story will ever be told.

• Some of it, certainly, had to do with Mizel’s ability to use his political influence, especially during the years when Republican Administrations were in power – both the Reagan and Bush (the elder) years. That influence probably extended into the Clinton years through the influence of Brownstein and Farber who had strong ties with Bill and Hillary. The details of how that influence worked would make, even today, the subject of an interesting investigative report.
• Some of it also had to do with the way that Mizel was able to clean up his act – and that of MDC – to a great extent, again with a little help from Brownstein and Farber, in this case through the auspices of a particularly adept business and financial manager named Spencer Browne

I keep looking at his picture and wondering if I had come across him in his Colorado years. He looks familiar, but in the end I cannot place where it might have been that our paths converged – if they did at all. Spencer Ivan Browne died a little more than five years ago, in April of 2005 in Miami Florida at the relatively young age of 55. Cause of death is not mentioned. His obituary in the April 27, 2005 edition of the Denver Post by Claire Martin only hints at the role he played in cleaning up the messes at MDC that Mizel and associates had made. `Spencer Ivan Browne, who died on Thursday’, the obit begins, `spent more than 20 years in Colorado, shepherding MDC Holdings through the 1980s savings-and-loan crisis and founding Strategic Asset Management’.

Browne kept out of the limelight to the degree possible during those years.

Browne came to Colorado in 1981 from Cleveland to work with the law firm, Brownstein Hyatt and Farber where he later became a partner for a period. Prior to moving to Denver, he had served as special counsel at the U.S. Securities and Exchange Commission (1974-1979). In 1984, the obituary continues, Brown joined David Mandarich and Larry Mizel at MDC Holdings where he quickly rose to a position of leadership. He became president of MDC in the critical year of 1989 – just as the Silverado scandal was being blown wide open, `a trying period for MDC and other businesses involved in savings and loan associations’ as Claire Martin put it. In this position it was Browne and not Mizel, who testified on MDC’s behalf at congressional hearings, shielding the company’s founder from more probing public scrutiny.

A later business partner at Strategic Asset Management, Barry Curtiss-Lusher, comments on Browne’s MDC years. “ Bringing the company successfully out the other end of that was probably the crowning achievement of his life.” And just maybe of Larry Mizel’s as well. Why after having saved MDC and Mizel’s skin, Browne left the company and moved to Florida is not clear. Browne was a strong supporter of the Anti-Defamation League (ADL) , was on the regional board in Colorado as was his wife, Carmen and left a sister, Dr. Hillary Browne of Boulder, Colorado.