Dear Judge: Go Easy on Michael

By John Greenwald

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.

With reporting by Priscilla Painton/New York and Edwin M. Reingold/Los Angeles