Milken Said to Be Subpoenaed by House Panel

The head of Drexel Burnham Lambert Inc.’s “junk bond” business, which has come under scrutiny in the Wall Street insider trading scandal, was subpoenaed Thursday to testify before a congressional panel next week, sources said.

Michael R. Milken was subpoenaed to testify April 27 before the House Energy and Commerce Committee’s subcommittee on oversight and investigations, said the sources, who spoke on condition of anonymity.

Drexel’s chief executive, Frederick Joseph, already was scheduled to testify next Thursday, but a subpoena was not considered necessary in his case, one source said.

“Milken did not want to appear,” the source said, and the subcommittee, chaired by Rep. John Dingell (D-Mich.) decided to subpoena him.

Kevin Madigan, the attorney at Drexel’s Beverly Hills office who sources said received the subpoena for Milken, was not in his office Thursday afternoon and queries were directed to Steve Anreder, the firm’s spokesman in New York.

Asked about the subpoena, Anreder said: “We can’t confirm it, but we anticipate hearing next week.”

Drexel’s operations have been the subject of a broad government inquiry because of the firm’s reported past business links with speculator and inside trader Ivan F. Boesky, who now is serving a three-year prison term for securities fraud.

Drexel repeatedly has denied any improper activities and neither the firm nor Milken have been charged with any wrongdoing.

Milken was the architect of Drexel’s pioneering Beverly Hills-based business in junk bonds--that is, high-yield, high-risk debt instruments, which in past years frequently were used to help finance corporate takeovers such as those in which Boesky speculated.