Now Who Will Indict RICO?
There surely are many who will take immense satisfaction in the sight of Michael Milken, arguably the most important financier since J. P. Morgan, brought before the bar of justice to make tearful account for his crimes. But however great--or justified--that satisfaction may be, it ought also to be accompanied by a deep unease about the U.S. government’s use of the Racketeer Influence and Corrupt Organizations Act--the so-called RICO statute--to induce Milken’s guilty pleas.
To understand why, it is helpful to begin with what the six felonies to which the former head of Drexel Burnham Lambert’s high-yield securities department are not.
None, despite the allegations contained in the original indictment handed down against him, involve racketeering; none involve insider trading; none involve conduct touching in any way on the fundamental soundness of the high-yield securities--or junk bond--market Milken essentially created.
What Milken did plead guilty to were violations of the securities regulations--very serious matters, but not the racketeering or sweeping conspiracy the government first alleged.
Why, then, the use of RICO? Because the statute’s disproportionately severe sentences and cruel forfeiture provisions are powerful instruments of government coercion against the accused. Coupled with the authorities’ willingness to drop equally serious charges against Milken’s brother Lowell, a former Drexel lawyer, if the financier would plead guilty, what emerges is a picture of prosecution by intimidation and a kind of legal hostage-taking. By going to trial, Michael Milken would have risked not only absurdly long prison sentences for himself and his brother, but also having his family beggared rather than simply fined.
Michael Milken has admitted criminality, but, like any other American, he was entitled to make the government prove its case. The fact that RICO induced him not to assert that right is another count in the indictment against a law that is overboard, out of control and ought to be repealed.
