(Bloomberg) -- Some of President Donald Trump’s closest confidants have urged him to pardon Michael Milken, the 1980s “junk bond king” who has unsuccessfully sought for decades to reverse his securities fraud conviction, according to people familiar with the matter.
The idea of a Milken pardon is being supported by Anthony Scaramucci, the financier who briefly directed White House communications; Treasury Secretary Steven Mnuchin; and Trump son-in-law and senior adviser Jared Kushner, the people said. Another advocate is Rudy Giuliani, the onetime federal prosecutor whose criminal investigation landed Milken in jail but who later bonded with him.
Milken’s attempts to secure a presidential pardon have spanned Republican and Democratic administrations, with him or his supporters putting his name forward as a worthy clemency candidate in no small part due to his philanthropic works. Milken, who is worth $3.4 billion according to data compiled by Bloomberg, has mounted high-profile efforts since his conviction to combat prostate cancer and improve childhood education. However, until now presidents have declined requests to embrace a man who came to be viewed as a symbol of greed on Wall Street.
Trump, who in recent weeks has waved away convictions of Lewis “Scooter” Libby (obstructing justice) and Dinesh D’Souza (campaign-finance violations), has said he has asked for names of others who may merit clemency. He has also publicly entertained the prospect of pardoning Martha Stewart and former Illinois governor Rod Blagojevich.
Although it’s unclear where Milken, 71, may fall on any priority list, he can count many advocates in Trump’s circle. His annual Milken Institute Global Conference, known as Davos of the West, attracts U.S. cabinet members including Mnuchin and Commerce Secretary Wilbur Ross, as well as former presidents and prime ministers, bank and private equity titans and celebrity athletes.
Milken didn’t respond to a request for comment, nor did the White House or those said to be advocating on his behalf.
Among Milken’s most persistent advocates is Giuliani, a Trump campaign stalwart who is now advising the president. Giuliani’s investigation into insider trading on Wall Street resulted in guilty pleas from Milken in April 1990, on six counts of securities and tax violations.
From his X-shaped desk in Beverly Hills, California, Milken had helped popularize high-yield debt in the 1980s at Drexel Burnham Lambert, fueling the leveraged buyout boom. He was implicated in illegal transactions by Ivan Boesky, a stock arbitrager and longtime Milken client.
Less than a decade after Milken served 22 months in prison and agreed to a lifetime ban on trading other people’s money, his former adversary had turned ally. Giuliani said that Milken, a prostate cancer survivor, had helped him through his own battle with cancer. In 2000, according to news reports, Giuliani pressed unsuccessfully for then-President Bill Clinton to pardon him.
A presidential pardon wouldn’t reverse Milken’s lifetime ban on securities dealing, which would require a separate appeal to the Securities and Exchange Commission.
“The SEC might well resist such an application,” said Lance Jon Kimmel, a lawyer at the SEC Law Firm in Los Angeles. Even with a pardon, regulators may view Milken’s ban as appropriate “to defend the integrity of the securities markets.”
Blow to Prosecutors
Ripping up Milken’s conviction -- the result of arguably the highest-profile inside trading case ever -- would be a blow to federal prosecutors, particularly those overseeing Wall Street. It would also be a rebuke to the judge who oversaw the matter three decades ago and excoriated Milken at his sentencing.
“When a man of your power in the financial world, at the head of the most important department of one of the most important investment banking houses in this country, repeatedly conspires to violate, and violates, securities and tax laws in order to achieve more power and wealth for himself and his wealthy clients, and commits financial crimes that are particularly hard to detect, a significant prison term is required in order to deter others,” the judge said at Milken’s November 1990 sentencing hearing.
That judgment was delivered by U.S. District Judge Kimba Wood in Manhattan. Wood remains in that seat, and is now in charge of reviewing evidence seized by federal agents from Michael Cohen, Trump’s long-time personal attorney.
©2018 Bloomberg L.P.