Bank failures reflect badly on Colorado

Just as the penny-stock scandals reflected badly on Colorado's business community in the last decade of the 20th century, Colorado's bank failures in the first years of this century -- eight since 2008 -- will reflect badly on the state for some time to come.

You hear bankers in the state still complaining about over-regulation, but you don't hear many calls for crackdowns on the fast-money track records of the failed banks, or for reform of the wide-open-West, free-market philosophy that led to the failures.

In fact, whenever the state's political and business communities cross paths in the wake of such business scandals in Colorado, the word traditionally used is "mum."

The Denver Post's Aldo Svaldi has done some admirable reporting on the bank failures, documenting for instance that the eight banks that failed, between 2004 and 2008, averaged loan-growth rates of 900 percent, while the average of all U.S. banks' loan-growth rates was just 44 percent during that period. At 76.2 percent, all of Colorado's banks' loan-growth rates for the same four years also ran considerably higher than the national average.

Those figures show how fast leaders of the failed banks, and leaders of Colorado banks in general, were running and gunning during the free-market heyday for Colorado business during Gov. Bill Owens' administration. Neither of Owens' successors, Bill Ritter nor current Gov. John Hickenlooper,  have made any move to slow such unfettered risk taking, but to do so would offend the business community each has been dependent on for their election.

So don't expect much more response to Svaldi's reporting than continued "mum." I asked three prominent business figures in town to comment on my thesis for this piece -- that all of Colorado business bears some accountability for the business practices that led to the bank failures -- but none responded to my call.

One former banker told me he knew of several banks that laid off what they suspected were bad loans to some of the failed banks thinking that regulators would catch up with the banks eventually and the process would work itself out. It did. Svaldi has reported that the five banks that failed in Colorado this year will cost the Federal Deposit Insurance Corp. $1 billion.

If you recall, that's about how much Silverado Savings and Loan cost the federal government when it failed back in 1988, when I first came to Colorado. "Mum" never changes things anywhere. Speaking up and speaking out occasionally will. Let's hope Svaldi keeps on writing.

You may have noticed that I changed the name of my blog to The SchwabBlog. Nothing more has been changed about it, not its url address nor its tone. Hope you continue to enjoy.

Bill Ritter for governor in 2010

Right here, right now, I'm endorsing Bill Ritter for re-election as governor.

The Republicans made me do it.

The news today, according to the banner headline across the front page of the Denver Post, is "United GOP targets Ritter."

And right below that headline the Post encapsulates the Colorado Republican Party's 2010 "Contract for Colorado," which leads off with the promise (I would call it a threat) to "Limit taxes and state spending."

As if the perennially Republican-defended Taxpayers Bill of Rights didn't already prohibitively limit Colorado's business growth and progress.

As if the perennial Republican criticism of Amendment 23, the only bulwark against legislative raids on public-school funding for the state, were not promise enough from their party that the children of Colorado can be ignored in order to uphold the wealth of the establishment.

No, none of that has been enough for Republicans in Colorado.

Now, they want to re-impose a "limited-government, no-government" regime on the state, apparently not satisfied with the deep hole the former Owens administration dug for Colorado through its frivolus spending on inefficient computers, its promotion of an Internet network that failed to deliver on its promises, its complete abrogation of public health programs and higher-education funding, and its total disregard for racial discrimination in state contracting.

That was once Colorado's contract with Republicans.

I, for one, would rather see Democrats in charge of making government mistakes.

At least they err on the side of ordinary people.

Norton's job is at stake

The parallels are not to be dismissed.

Kay Norton, president of the University of Northern Colorado, was trying to save her job Friday when she took to the press-conference podium and told reporters the investigation into UNC's reaction to male sexual-harassment allegations against a UNC theater professor would be as broad and deep as it could be.

"The University of Northern Colorado has placed no limits on the investigation," Norton said in a statement posted on the UNC website.

Her quick action is a response required by law of an employer facing an allegation of sex harassment made within the workplace -- in this case a student against a professor -- but more than that, her quickly going public is a reflex to the public humiliation and resignation of former University of Colorado president Betsy Hoffman five years ago.

When Hoffman delayed responding to charges her football team and coaches were using sex and alcohol to recruit teen graduates of high schools, then-Gov. Bill Owens publicly demanded a full-bore investigation, and then put more heat on Hoffman after Ward Churchill's "little Eichmanns" essay was made widely public. The governor's public actions in each instance were taken long after the fact of the offenses he held Hoffman accountable for.

Now, I'm not suggesting that now Gov. Bill Ritter call for Norton's resignation.

Politically, such a call would parallel Owens pressure on Hoffman. Owens was Republican; Hoffman considered somewhat liberal. Ritter is a Democrat; Norton took the UNC post during Owens' administration and her husband, Tom Norton, was director of the state highway department at the time.

And Norton is going public in part to cut short such retributive political action.

That's not only a smart move politically, but probably the best move in terms of UNC's reputation among institutions of higher learning.

Allegations regarding sexual behavior are now a most public event, especially when criminal charges or the possibility of criminal charges are imminent, and even more especially when public figures or public institutions are involved. Bill Clinton, the University of Colorado, Michael Jackson, South Carolina Gov. Mark Sanford ..., the list of celebrity media coverage goes on and on and on and on.

Norton has been a good president of UNC, by all accounts. Her actions regarding the current firestorm are the right actions, although her institution's behavior in the past may still be found at fault and Norton held accountable for it.

That would be the "right thing to do," no matter the outcome.

As Betsy Hoffman and so many others have found out during careers over the past decade, jobs are to be held for as long as one can hold them, doing the best you can do while you do hold them. But then the economy, a sex scandal, some mistake, or a change in political fortunes comes along to muck up your performance. And the job comes to an end.

As my mother would have said: Buck up and move on.

Ward Churchill: Free speech trumps political backlash

Ward Churchill's victory in a Denver District Court Thursday not only represents another victory for the First Amendment, but a victory for all the people of Colorado.

And you can thank the jury for that.

So far, none of the jurors have explained their verdict which ruled Churchill's rights to free speech were violated by the University of Colorado at Boulder, which fired him. The jury awarded the former CU professor only $1 in damages, putting enough of a devaluing influence on the decision that attorney Scott Robinson wrote in The Denver Post:

"Free speech triumphs. But at least when it comes to professor Ward Churchill, it isn't worth that much."

Shame on Robinson.

As an attorney, Robinson knows, as so many people at CU knew, that free speech is worth every penny we spend on it because the U.S. Supreme Court has ruled that without it the republic would not survive.

Which is why the $1 Churchill won is not without significance.

I am currently reading (finally) Anthony Lewis' 1991 book, "Make No Law," about the New York Times v. Sullivan decision which gave the press and the citizens of the United States secure freedom to say and write what they like about public officials, unless they know what they say is wrong when they deliberately say it anyway.

Again, since the jury's not talking, you have to read into their verdict what you will (and be perfectly happy interpreting it whatever way you like since your right to do so is guaranteed by the First Amendment), and even write about it when your interpretation is all wet.

What I see in the jury's decision is a strong endorsement of free speech in the face of dire consequences from public officials, and yet a concern for Colorado's leading public university and it's money problems. The jury knew CU couldn't afford to pay Churchill a large damage claim for violating his civil rights, and yet, perhaps, also knew the state should be able to afford attorney fees since it was a former governor, a former senator in Hank Brown, the former CU president, and a former Republican Party chairman and candidate for governor, who forced the state into court to defend its woeful decision to fire Churchill in the first place.

Make no mistake: All these people knew the financial consequences to the state for trying to defend the university for making constitutional infringements on the civil rights of one of its employees, and yet they took no heed of the people of Colorado's financial plight, especially regarding one of its strapped institutions of higher education. They all had a political point to make, and damit, cost or no cost, they were going to make it.

Former Gov. Bill Owens remarked post verdict: "I think the $1 in damages accurately reflects the jury's appreciation for Ward Churchill's warm and endearing personality."

I'll always defend the old governor's right to say such a silly thing, but the people of Colorado, who will pay anywhere from a half million to a whole million in legal fees for an attempt to keep someone else from exercising the same right, ought to take Owens to task for having provoked the whole legal fiasco in the first place. Perhaps they should ask him to pay the fees!

Bruce Benson's comment is just as ridiculous considering the legal advice available to him. He said CU administrators -- he is current CU president and was once a candidate for governor and state Republican Party chair -- "strongly disagree" with the jury's decision and:

"It doesn't change the fact that more than 20 of Ward Churchill's faculty peers on three separate panels unanimously found he engaged in deliberate and repeated plagiarism, falsification and fabrication that fall below the minimum standards of professional conduct."

Neither, however, does any of that change the fact that Churchill has a right to say what he likes even when what he says is wrong, especially when he is speaking about government.

Benson knows that; and his attorneys at CU certainly knew that. Former Gov. Bill Owens should have known it, too, when he called on CU to fire Churchill.

You can forgive Owens, though, for not remembering it now. Now, judging from his statement, Owens believes First Amendment rights should be adjudicated on the basis of one's personality rather than on one's constitutional freedoms.