When President Donald Trump pardoned Michael Milken on Tuesday, it came just a week after the former junk bond king's Milken Institute had wrapped up its latest conference in Abu Dhabi, United Arab Emirates.
The gathering featured a mix of high-powered leaders, including hedge-fund guru Ray Dalio and former Republican House Speaker Paul Ryan, but it wasn't just about how to make money or navigate the Washington, D.C., thicket. Reflecting the Santa Monica, Calif., institute's focus, the program of the 2020 Middle East and Africa Summit featured sessions on health, global diseases, education and the environment.
The event, in fact, was only the latest manifestation of the 73-year-old's decadeslong commitment to philanthropy. It began before he pleaded guilty to felony violations of securities laws in 1990, but was ramped up in the years since in what became either an intentional or unintentional effort, depending on your view, to rehabilitate his image as the poster boy of 1980s greed.
In a tearful admission of guilt in a New York City federal courtroom, Milken pleaded in April 1990 to counts of conspiracy; aiding and abetting failure to meet federal securities disclosure regulations; securities fraud; aiding and abetting a regulated broker-dealer to violate securities reporting requirements; mail fraud; and assisting in filing a false tax return.
Milken was given a 10-year sentence, fined $200 million and required to pay $400 million in restitution. He later settled lawsuits for an additional $500 million. He served 22 months at a minimum-security prison dubbed "Club Fed" in Dublin, Calif., and was released after testifying against a former colleague. He also was banned for life from the securities industry.
Milken was among 11 convicted felons who were either granted pardons or commutations of their sentences by Trump on Tuesday. Among the others was former Illinois Gov. Rod Blagojevich, who was serving a 14-year sentence for trying to sell an open U.S. Senate seat held by Barack Obama.
The president's decision follows a long campaign by Milken's supporters to win a pardon for him. In 2018, financier Anthony Scaramucci, who served briefly as Trump's communications director, told the Los Angeles Times that Los Angeles financier Gary Winnick, a former associate of Milken at now-defunct investment bank Drexel Burnham Lambert, had raised the issue at Trump's inauguration, citing his "commitment to health and global progress."
Other proponents of a Milken pardon at the time were said to include Jared Kushner, Trump's son-in-law and senior adviser; Treasury Secretary Steven T. Mnuchin; and Rudolph W. Giuliani, Trump's outside counsel. It was Giuliani's investigation of Wall Street malfeasance in the 1980s, when he was a federal prosecutor, that led to Milken's guilty plea and imprisonment.
Through his pioneering use of junk bonds, Milken was credited with rescuing companies that were running low on cash or never had much to start. But critics accused him of enabling corporate raiders to plunder and gut otherwise viable corporations, laying off workers by the thousands and draining the savings of retirees.
The New York Times called Milken "the most powerful, most innovative, and most feared American financier since J.P. Morgan." He wasn't known for lavish living, but his $550 million salary and bonus in 1987 alone prompted outcries in newspaper editorials.
When Milken was sentenced in 1990, Richard C. Breeden, the chairman of the Securities and Exchange Commission, argued that the legendary trader "stood at the center of a network of manipulation, fraud, and deceit." At the time, the annual budget for Breeden's entire agency was less than one-quarter of Milken's record-setting payday.
Milken, however, insisted that his work created many more jobs than it killed _ and that even some of those could have been saved if companies under threat of takeover had been more efficient.
"I'm proud of what we accomplished at Drexel," he told Forbes magazine in 1992 as he was doing his time. "We were matching capital to entrepreneurs who could use it effectively. We were creating investments that money managers needed in volatile markets."
Shortly after his release from prison in 1993, Milken was diagnosed with advanced prostate cancer and given 18 months to live.
Surprising some of his doctors, he survived _ and started a foundation that channeled more than $700 million into prostate research. In 2004, Fortune magazine declared Milken "the man who changed medicine," pointing to the increased funding and visibility he had brought to the fight against prostate cancer.
Milken also poured himself into causes beyond the Prostate Cancer Foundation. His Milken Family Foundation, which he started in 1982 with his brother Lowell, has made charitable donations of more than $1.25 billion.
Thousands of outstanding teachers across the U.S. were recognized with no-strings awards of $25,000 each. In 2014, George Washington University in 2014 opened its Milken Institute School of Public Health with a gift of $50 million.
Milken also founded the Milken Institute, a think tank that promotes capitalist solutions to global challenges. It annually brings together several thousand of the world's most successful people in business, government, entertainment, sports, arts and the sciences.
After Trump's announcement, Milken issued a statement saying he had no plans to return to the securities industry. Instead, he said he and his wife, Lori, are "very grateful to the president" and "look forward to many more years of pursuing our efforts in medical research, education and public health."
