EXCLUSIVE
Powerful Wall Street tycoons convinced former President Bill Clinton not to pardon junk-bond king Michael Milken in a furious last-minute battle, The Post has learned.
Personal phone calls to Clinton and White House aides – arguing that the widely expected Milken pardon would undermine public confidence in financial markets – tipped the balance.
On one side of the struggle were government securities enforcers and Milken’s old enemies on Wall Street; on the other were influential Hollywood execs and Clinton fund-raisers who lobbied for Milken.
The opponents of a pardon included Citigroup’s influential Robert Rubin, a former treasury secretary in the Clinton administration, and Evercore Partners chairman Roger Altman, a former deputy treasury secretary, sources said.
Supporters of a pardon included Ron Burkle, a Los Angeles supermarket mogul and Clinton pal who hosted five Hollywood fund-raisers for the Clintons.
“Yes, Ron was a supporter of Milken’s” said Ari Shuller, spokesman for Burkle’s firm, the Yucaipa Companies, noting that Burkle had previous business dealings with Milken’s former firm, Drexel Burnham Lambert.
The debate was so consuming that former White House Chief of Staff John Podesta and other top Clinton advisers were unaware the president was considering granting even more controversial pardons – such as the one for fugitive billionaire Marc Rich.
Milken served 22 months in prison, paid more than $200 million in fines, and pledged never to trade securities again after being convicted in Wall Street’s biggest insider-trading scandal.
Rich fled the country in 1983, ahead of his indictment, and has continued to make billions from his far-flung trading empire.
There were major differences between the Milken and Rich pardon requests.
Milken’s lawyers went through the established procedures for pardons, filing the petition in October with the Justice Department.
Rich’s lawyer, former White House aide Jack Quinn, bypassed the department and quietly slipped his petition directly to the White House in December.
Also, the debate over Milken’s pardon was reported in the news media for weeks, giving opponents and prosecutors a chance to mobilize.
In December, the Securities Exchange Commission wrote a letter to the White House charging that Milken consulted on a number of big deals, including Time Warner’s purchase of CNN and two deals involving News Corp., which owns The Post, as proof that Milken was violating his pledge to stay out of the securities industry.
In contrast, few people outside the Oval Office knew Clinton was even considering pardoning Rich, said Martin Auerbach, the former assistant U.S. attorney who helped prosecute Rich.
Richard Sandler, Milken’s lawyer, said he learned from the department on the night before George W. Bush’s inauguration that Milken’s name was not on the list of 140 last-minute pardons.
“All I was told was there were certain people who were very much against it. It was disappointing,” Sandler told The Post.
Another Milken supporter involved in the debate said the pardon battle was won by people “with old grudges whose firms lost business to him” during his Wall Street heyday.
On Dec. 28, Clinton strongly hinted that Milken was on the list of last-minute pardons.
“If some years have elapsed and they’ve been good citizens and there’s no reason to believe they won’t be good citizens in the future – I think we ought to give them a chance to, having paid the price, to be restored to full citizenship.”