Lowell Milken has been portrayed in the press as subordinate to his older brother, Michael, and the plea bargain struck by Drexel Burnham Lambert with the government is consistent with that image.
The agreement requires Drexel to fire Michael Milken immediately and withhold all of his 1988 bonus. But Lowell Milken is allowed to receive half of his bonus from last year and can remain in his job until his anticipated indictment on criminal charges, which could come as soon as today.
But people who know both men say that Lowell is more his brother’s equal than his second-in-command, and that Lowell’s grasp of nuance and detail provide a perfect complement for the broad strokes his brother painted across the financial landscape of the United States.
“I’ve read where Lowell is Michael’s right-hand man, but people who say that don’t understand the relationship,” said a friend of both men. “They are brothers and they are very close. Lowell is Michael’s confidant. But they are not twins. Lowell is his own man.”
Lowell Jay Milken, 40, grew up in the San Fernando Valley, graduated summa cum laude at UC Berkeley and was editor of the law review at UCLA law school.
A decade ago, he left a promising career with the Los Angeles law firm of Irell & Manella to join his brother in the fledgling “junk bond” operation that Michael had moved to Beverly Hills from Drexel’s New York headquarters in 1978.
“Lowell’s primary area of practice was tax law, and I remember him as being exceptionally smart,” said Edmund M. Kaufman, a senior partner at Irell & Manella. “He was enjoying being a lawyer. He was very imaginative and creative, and he was extremely smart and a very hard worker.”
At its upper levels, where Milken appeared to be headed, tax law is intellectually challenging in addition to requiring enormous attention to detail. This penchant for detail made Lowell a vital adjunct to his brother--and, along with his role as confidant, a target of the government investigators who have been on the elder Milken’s trail for years.
When he joined Michael at Drexel, Lowell’s first job was managing the investments that Michael had been making for both of them over the years. In addition to administrative duties for the investment firm, Lowell analyzed the risks of potential deals and the financial data for the companies for which Drexel issued junk bonds.
Valuable Real Estate
As the junk bond business mushroomed, so did the wealth of the Milken brothers and many others who worked in the Beverly Hills office with them. Lowell increasingly assumed the job of managing the investments in land, office buildings and securities.
Among the holdings of their numerous partnerships is the building at Wilshire Boulevard and Rodeo Drive in Beverly Hills that houses Drexel’s junk bond operation and Gump’s, the fashionable department store.
Lowell has a title of senior vice president at Drexel, and his office is within shouting distance of the big X-shaped trading desk where his brother ruled the junk bond business.
Friends say the brothers are similar in many ways. Because they are only two years apart, they shared many of the same friends growing up and still do so as adults. Both are portrayed by friends and associates as devoted family men, while others say both can be abrasive in their relations with colleagues. Both wear toupees, and Lowell is shorter than his brother.
Michael lives in an Encino house of modest proportions, at least for a man with an estimated personal net worth of close to $1 billion. Although Lowell is thought to be worth considerably less, his tastes appear to be a bit richer.
Property records show that he and his wife, Sandra, own a 7,142-square-foot house on Mandeville Canyon Road near Topanga State Park in Los Angeles. The couple paid $869,500 for the property in 1979, and it is now valued at more than $1.3 million. The 37-year-old, stucco house has seven bedrooms, six baths and a pool.
Records also show that they own a contemporary two-story beach house in Malibu with five bedrooms and four baths. They bought the house in 1984 for $975,000, apparently for cash, according to the records.
Aids Many Charities
In November, 1986, Lowell and Sandra Milken donated $7.6 million in cash and securities to create their own charitable foundation, which shares offices with Michael’s three foundations.
Lowell and his wife, who have three children, are big-league benefactors in their own right, handing out $1.2 million to 29 organizations in 1987. The largest grant, $450,000, went to the Jewish Federation Council of Los Angeles, and an education project received $323,000.
Lowell has also been active in his brother’s foundation, helping direct the contributions and serving as president of the biggest family charity.
As their fortunes have become intertwined in recent years, so have their fates. Lowell joined his brother as a defendant in the civil suit filed in September by the Securities and Exchange Commission that charges them with stock manipulation and insider trading. And he seems likely to be indicted with his brother.
Lowell’s chief attorney, Michael F. Armstrong, reacted angrily to Drexel’s decision to withhold half of Lowell’s 1988 income, issuing a statement that called it a “blatant violation of his constitutional rights.”
Armstrong said the money was being withheld despite assurances from Drexel’s chief executive, Frederick H. Joseph, that Joseph had no indication Lowell had done anything wrong. Armstrong also said one of Drexel’s lawyers assured him earlier that the firm would refuse to settle with the government if the deal implied any wrongdoing on the part of Lowell Milken.