Milken’s Latest Woe Is Named Benjamin Stein

No voice has been louder than writer Benjamin J. Stein’s in criticizing federal prosecutors for letting Michael Milken avoid a trial by acceding to six felony counts and $600 million in fines and restitution.

A prolific author and former speech writer in the Nixon White House, Stein says that the plea bargain was too soft and that a trial is needed to bring out the truth.

But is Stein telling all?

Just days after the junk bond king agreed to plead guilty, Stein published an “open letter” in Barron’s in which he said “junk was really a Ponzi scheme all along.” Stein had an opinion piece in the New York Times, in which he called Milken “the premier financial swindler of all time.” Stein was quoted in the Wall Street Journal and was interviewed on ABC World News Tonight with Peter Jennings.

Stein was vocal, but certain ironies went unmentioned.

For example, Stein was paid to act in a Western Union television commercial that ran from late 1987 through the end of last year. Western Union happens to be burdened with junk bonds issued through Drexel.

Western Union’s problems are so big that it has acknowledged it may seek protection from creditors in bankruptcy court. Indeed, when Stein made the commercial, Drexel was an important stockholder in Western Union. An investment group including Milken and other Drexel executives was even trying to buy a controlling interest in the company.

Another irony: Stein wrote Milken in late 1988, offering to be an “in-house vetter of deals from a fairness to stockholders standpoint, and teacher of ethics to your young and bright colleagues.” The letter was revealed in February’s Spy magazine under the headline “The Queerest Letter Mike Milken Ever Received.”

In an interview, Stein said he was unaware of Western Union’s relationship with Drexel. Besides, he said, he isn’t opposed to all junk bonds, just those in which the risks are misrepresented. As for the letter to Milken, Stein, who also is a lawyer and economist, says he was not asking for a job, but offering to do the work “pro bono” for the billionaire Milken. Stein says he now regrets the way he worded the letter.

Stein is probably best known as the defendant in a lawsuit filed by comedian Joan Rivers over a 1987 article he wrote under the pseudonym Bert Hacker in GQ. The article was a first-person account in which the author claimed to know Rivers, and to have heard her joke about her late husband, who killed himself. Stein later admitted he never met Rivers, and the suit was settled out of court.

Stein seemed unhappy when asked by The Times about the Western Union ad and the letter. He alleged that the questions were prompted by Linda Robinson, a partner in the New York public relations firm that represents Milken, and he vowed to say as much in Barron’s. Ten minutes later, he called back to say he was just teasing.