Clinton Should Pardon Mike Milken!! Jude Wanniski January 17, 2001

Memo To: Neil Lewis, NYTimes
From: Jude Wanniski
Re: Mike is a good man

Dear Neil:

I was happy to see your Saturday story, “Ex-Financier Milken in Line for a Pardon, Official Says.” Only one quibble. If you had a chance to personally know Mike Milken, even for a day or two, you would realize he is totally incapable of "mounting an aggressive campaign" for a pardon. I got to know him extremely well, after I began writing in his defense in the years before he went to trial and prison. Indeed, in the year before he went to trial, he called me several times a week, at 5:00am PST, knowing I would be up and about, a recent divorcee alone and making breakfast for myself. I am not exaggerating. He came to see me as one man outside his paid retinue who saw through the whole bogus railroad job, and truly believed in his innocence. The railroading of course involved The Wall Street Journal news section, Milken's primary prosecutor.

It seems incredible, I know, but Mike is a true naif, as unworldly as you can imagine. He automatically thinks everyone he meets for the first time is a good person. He is pathologically incapable of committing a crime or of saying something that might upset someone. I remember begging him to replace Edward Bennett Williams with another criminal attorney after Williams died, but he did not want to hurt Arthur Lyman’s feelings, as Arthur was handling the civil side and offered to take over the criminal. Arthur's first criminal case was Milken's and of course he botched it. The conventional wisdom always has been that Milken is a “typical” billionaire who would do anything to beat the rap, even take a busload of little black kids to Dodger Stadium on a Saturday afternoon (which he had been doing long before he got caught by the forces of history and Rudy Giuliani).

Yes, he pled guilty to a few technical violations of law (failing to file a certain paper on time with the SEC), but this was when he became persuaded that the Giuliani Feds had made such an investment in his guilt that they could not let go without a victory. (I recently compared Wen Ho Lee to Mike.) The point is that between plea and sentence, about 550 friends of Mike, me included, wrote letters to Judge Kimba Wood, to tell her this guy was incapable even of knowingly allowing his parking meter run out. The press corps wrote that Mike had mounted that campaign too, when neither he nor his lawyers did so. He did have a pr firm, but they went nuts because Mike was not helpful in doing spin. Kimba Wood did not read the letters, on the grounds that they must have been organized because the press said so. She did read the letters sent by people who did not know him and asked that he be executed, boiled in oil, for his crimes. The poor lady had to come crashing down on him even though it was clear to me she had not the foggiest idea what he was supposed to have done. The Fed cops knew even less, somehow believing that a "hostile takeover" was equivalent to the Lindbergh kidnapping.

I became interested in the Milken case at the time I was publishing the MediaGuide. We had given James B Stewart **** for his Wall Street stuff in our second edition. But then I began noticing that he was writing stories about Milken's alleged criminal activities without sourcing the allegations by name. I was horrified at this departure from the strict rules which had been laid down by the founders of the modern WSJ, particularly Barney Kilgore and Vermont Royster. It soon became clear that Giuliani was feeding stuff to Jim Stewart that had been fed to him by Ivan Boesky. It also was clear that Norman Pearlstine, another trained prosecutorial lawyer -- as is Stewart -- was eyeing a Pulitzer and would let nothing stand in his way. I wrote a defense of Milken BEFORE I EVER SPOKE TO HIM. And in the period before and after I never profited financially from the relationship. When he came out of prison, he naively offered a business relationship with me, but I told him I could never take a penny from him because it would appear that I had defended him on the come.

In short, if anyone deserves a full pardon, it is Mike Milken. His imprisonment was truly a miscarriage of justice, at a time when the country was looking for someone to blame for the Reagan "Decade of Greed." I remember my frustration when I read that David Rockefeller said it was "disgusting" that Milken paid himself $500 million in one year at Drexel Burnham, when that was simply the cut-and-dried commission worked out in advance on his success in placing capital with people who could turn seemingly “junk ideas” into fortunes. By contrast, Rockefeller inherited his wealth from John D., who made $500 million a year for twenty years in a row, correcting for inflation.

How do I explain Milken's great wealth? He is a true financial genius -- by which I mean a man who can see a pile of manure and sense a Secretariat or Native Dancer beneath. (Ronald Reagan had the same genius in the political realm.) I told Mike years ago he is the only man in the world who gets tomorrow's WSJ delivered a day early, by the grace of God. In the 1980s, more than half of all loans made to black businesses by dollar volume came through Michael's hands -- which is why the NY Amsterdam News argued editorially that the campaign against Mike was part of the conspiracy to keep black folks down. Hey, Neil, it was part of the conspiracy of the Business Establishment to destroy a man whose genius in helping up-and-comers was threatening their hold on the status quo. I've written since that the only equivalent in the 20th century was A.P. Giannini, founder of the Bank of Italy in 1902, which became the Bank of America. Giannini's secret was lending money to Italian immigrants (“junk people”) who could not get financing from the power banks of San Francisco after the earthquake.

So before you write a follow-up that talks about the "aggressive campaign" he has mounted, please call some of the folks he has helped with his junk bonds. Put in a call to Ted Turner and ask if he was called by Mike to promote a Clinton pardon. Call Steve Wynn and ask him. In his years in prison, my wife and I only visited Mike once; Wynn spent one day a month with him on the prison grounds. Ask these big guys if they were asked by Mike or Mike's people to help him get a presidential pardon. There is not the slightest doubt in my mind that they were never contacted. Just to be sure, I e-mailed a fellow who works for Mike in LA. Here is his response:

"Jude, your instincts are correct: Mike has not 'mounted an aggressive campaign.' On the contrary, we have given no encouragement to the many people who have called offering to write letters or help in other ways. Some have undoubtedly written to the President anyway, but not as a result of anything we have done. As you well know, the NYT has its own agenda. If you haven't seen it, you may be interested in Mike's new web site: www.mikemilken.com. A small effort to counter the flood of distortion that you have documented so well in the past. I'll let Mike know you called."

What is so disheartening about all this at the moment is that President Clinton may be advised that if he wants a pardon by President Bush, he probably should not pardon Milken. It would look like some kind of payoff to a wealthy California Democrat and Clinton fundraiser, a fellow who has, on his own, "mounted an aggressive campaign" to get a presidential pardon for Milken. There is more of a story here than meets the eye, Neil. You can be sure my old friends at The Wall Street Journal editorial page are on the horns of a dilemma. They know Milken is as innocent as a lamb and would love to see him pardoned by Bill Clinton, but they do not want Clinton pardoned by a President Bush. I have no such dilemma.

If you would like to see some of my Milken archives, I would be happy to send you the material or direct you to it at my website.