Milken Faces Pay Cut of Up to $107,000 an Hour at Federal Prison Camp

Michael Milken, who at the height of the junk bond craze was making a tad over $107,000 every 60 minutes, will earn a modest 12 to 40 cents an hour when he becomes a working inmate at the Federal Prison Camp in Dublin, Calif.

But the former junk bond king will have a far shorter workday. At Drexel Burnham Lambert, he was famous for putting in 14 to 18 hours a day until he became the nation’s best-known white-collar criminal. Prisoners generally work from 7 a.m. to 3:30 p.m.

The minimum-security prison to which Milken is to report on March 4 is on the grounds of Camp Parks, an Army base in the East Bay. The men’s facility is across the road from a federal women’s prison where publishing heiress Patty Hearst spent time and where a swain rescued his inmate sweetheart by helicopter in 1986. (In 1987, the year the rescuer was sentenced to 25 years for the episode, Milken was paid an astronomical $550 million in salary and bonuses.)

When Milken begins serving a 10-year term for violating securities laws, he will share a 360-square-foot room, probably with three other men, in a converted barracks that opened just last October and now holds about 80 inmates. Each man has a locker and a desk; bathrooms are down the hall.

Milken, who is expected to serve only three years of his term, will sleep on a single bed, hike about one-eighth of a mile to a cafeteria for his meals and work at some form of job such as maintenance, construction, landscaping or vehicle repair. He will have a choice of wearing his own clothes or a uniform of khaki pants and shirt.

“It’s impossible to tell what his duties will be,” said Janice Killian, executive assistant to warden Loy Hayes. “It’s dependent upon the skills of the individual.”

Deal making, Milken’s primary skill, is not officially an option.

For the time being, his leisure activities will be limited. There is a TV room, but the library is still under construction. Recreational facilities consist of some outdoor weight equipment and a jogging track.

Under prison policy, Milken will have to shed his ever-present toupee. “Our bureau policy does not allow any hairpieces of any kind,” Killian said, adding that Milken “will not be afforded any special privileges.”

In designating the Dublin facility, federal officials went against the recommendation of U.S. District Judge Kimba M. Wood in New York, who sentenced Milken last November. Wood had asked the Federal Bureau of Prisons to send Milken to a facility on Nellis Air Force Base in Las Vegas, which is closer to Milken’s Encino home.

Milken had asked that his prison be convenient for visits from his family and near pediatric neurology services, for one of his three children.

The Dublin facility is 30 miles from UC Berkeley, where Milken received a B.S. in September, 1968.

Greg Bogdan, a spokesman for the prison bureau in Washington, said there are “any number of reasons why we might decide another facility best suits his needs. We try to place him where his security needs can best be met.”

Although the facility is called a camp, Bogdan cautioned that one shouldn’t get the idea that this is a country club. In prison parlance, “camp” simply means that there is no fence and inmates are free to stroll the grounds. Prisoners assigned to such facilities are deemed trustworthy enough not to abuse the privilege and take a long stroll, say off the grounds, although Bogdan acknowledged that this occasionally happens.

Minimum-security facilities save taxpayers money, Bogdan said, noting that it costs about $10,000 a year to house a prisoner at a camp, compared to $15,000 at Marion, Ill., which replaced Alcatraz in 1963 as the nation’s highest-security prison.

When it opened in 1974, the women’s prison was actually in Pleasanton, about an hour’s drive southeast of San Francisco. The boundaries later changed, but the facility is still officially known as the Federal Correctional Institution-Pleasanton. It is set in rolling hills and has been described as looking like a cross between a condo complex and a college campus. Nearby residents dubbed it “Club Fed.”

Sara Jane Moore, who in 1975 attempted to assassinate Gerald Ford when he was President, is housed there. And kidnaped heiress Hearst, after her conviction for bank robbery, served some time there in the 1970s.

The legendary “jailbird lover” incident took place in November, 1986, when a former Vietnam War helicopter pilot named Ronald McIntosh, himself an escapee, hijacked a helicopter and flew it to the prison to sweep up his waiting girlfriend, inmate Samantha Dorinda Lopez.

Camp Parks is actually a holdover name for what is now officially the Parks Reserve Forces Training Area, an operation that falls under the Presidio of San Francisco.

Times staff writer Scot J. Paltrow in New York and researcher Norma Kaufman contributed to this story.