TIME: Almanac 1993/TIME Almanac 1993.iso/time/092490/0924205.000

Text File | 1992-08-28 | 5KB | 109 lines

                                                                              BUSINESS, Page 69

Dear Judge: Go Easy on Michael


Friends of the junk-bond king lobby for a lenient sentence


    How much time should America's most famous Wall Street
criminal spend in the slammer? Junk-bond king Michael Milken,
who is scheduled to be sentenced Oct. 1, could get up to 28
years. He has already been punished financially: last April,
when Milken reached an agreement with prosecutors to plead
guilty to six of the 98 counts of securities fraud and other
crimes leveled against him, he was ordered to pay $200 million
in fines and $400 million in restitution. Scores of Milken's
friends -- and a smattering of his foes -- have deluged New
York Federal District Court Judge Kimba Wood with more than 200
letters that aim to sway her decision about his prison term.
While such lobbying is common in white-collar proceedings,
Milken's case has attracted letters from a dazzling potpourri
of the rich and famous.

    Many correspondents painted a benign picture of the
financial wizard whose acumen, and sometimes shady practices,
powered the 1980s takeover wars. While Milken earned more than
$1 billion as the guru of the  now defunct Wall Street firm
Drexel Burnham Lambert, friends argued that accumulating vast
wealth was never his main goal. Wrote CBS president Laurence
Tisch, who said he has known Milken for almost 20 years: "I
have rarely dealt with a more dedicated and faithful
professional or one more sensitive to the needs and goals of his
clients or more mindful of the needs of society at large."

    A five-page personal letter from Steven Ross, chairman and
co-chief executive of Time Warner, called Milken "a long-term
thinker, not a quick-buck artist." Wrote Ross, who said Milken
became a close friend after arranging a 1984 stock offering for
the former Warner Communications: "He talks more about
illiteracy in math or chronic diseases of the poor or
unemployment than about interest rates."

    Celebrities praised Milken's work on community projects. "I
have never met the equal of Michael Milken," declared Monty
Hall, who hosted the former television game show Let's Make a
Deal and is an officer of the Variety Clubs International
children's charity. Hall said Milken has donated generously to
the charity through the Milken Family Foundations (estimated
assets: $350 million). Rosey Grier, an ex-football player who
works with impoverished children in Los Angeles, noted that
Milken has taught math in public schools and helped raise money
for minority businesses. Wrote Grier: "I recognized in him a
deep desire to help inner-city residents break free of the
strangling choke-hold of poverty and begin to move into a new
sphere of existence."

    An array of other prominent citizens praised Milken's
charitable contributions and personal interest in medical
research, anticrime programs and other causes. Among his
advocates: police chief Daryl Gates and Archbishop Roger Mahony
of Los Angeles, California superintendent of education William
Honig, Israeli Deputy Foreign Minister Benjamin Netanyahu and
Occidental Petroleum chairman Armand Hammer. But is Milken a
Johnny-come-lately to good works? Not so, according to his
friend, attorney Richard Riordan. "This isn't like he began
doing good because he felt the heat," says Riordan. "He's been
doing this for years."

    Roughly 10% of the correspondents, however, were furious
with Milken for his confessed criminal activities, which
included the manipulation of securities prices. John Weigel,
a financial consultant in Costa Mesa, Calif., called Milken
"merely a financial extortionist on a Capone-esque scale that
demands punishment on a similar scale." Concurred Miami
attorney J.B. Spence: "It will be incredibly disheartening to
the American public if the sentence is a mere slap on the
wrist."

    Other critics said they had suffered in the collapse of the
junk-bond market or had taken pay cuts in the aftermath of
corporate buyouts. Claude Daughtry, a real estate agent in
Berkeley, complained that he had lost money in the junk-bond
debacle and called Milken's fine a travesty. Ronald Cornwall,
a Pennsauken, N.J., grocery clerk, said his salary plunged from
$33,000 to $24,700 when his employer, Pathmark,  was acquired
in an LBO.

    Meanwhile, federal prosecutors are doing some lobbying of
their own. They filed a sealed report last week asking Wood to
consider at least some of the dozens of other allegations
against Milken that the government dropped in its plea-bargain
agreement. Judges are free to weigh dismissed counts in
reaching a sentence. But if Wood does decide to review the
dropped charges, Milken has the right to defend himself at a
hearing that could add months to the sentencing process.


By John Greenwald. Reported by Priscilla Painton/New York and
Edwin M. Reingold/Los Angeles.