Milken’s Holiday Plans : He’ll Greet ’93 Behind Bars After Transfer Is Delayed

Former junk bond financier Michael Milken will spend his second New Year’s behind bars after federal prison authorities substantially delayed his release to a halfway house.

Under federal prison rules, Milken became eligible for transfer to a halfway house in early September, six months before his March 2 release date from custody under his sentence for securities fraud.

But for undisclosed reasons, the federal Bureau of Prisons has chosen to keep the former Drexel Burnham Lambert junk-bond king locked up at the federal minimum security prison camp in Pleasanton far longer than is normal for nonviolent offenders in similar circumstances.

Richard Sandler, Milken’s lawyer and personal adviser, confirmed Monday that no date for Milken’s release to a halfway house had been set and that he is unlikely to be out before sometime in January.

“I’m positive it will not be before Christmas,” Sandler said.

Prisoners normally are assigned to halfway houses near their legal residence, so Encino resident Milken would land at one in the Los Angeles area.

While living at halfway houses, which are designed to ease the adjustment to freedom, prisoners must get jobs, although they have evening curfews and all activities must be approved by a supervisor. The houses are privately run under contract with the Bureau of Prisons.

Bureau spokesman Greg Bogdan declined to comment on the reasons that Milken is being detained, saying regulations forbid the bureau to comment on individual prisoners’ cases.

However, several attorneys who were involved in the Milken case speculated that prison authorities fear public criticism if they appear to be treating the former head of Drexel’s high-yield bond department too gently.

“There are rules for everybody else, and there are rules for Michael Milken,” Sandler said.

The Bureau of Prisons came in for some criticism when it was disclosed in 1989 that admitted inside trader Ivan F. Boesky was released to a halfway house more than four months before his prison release date.

Bogdan denied that such factors play a role in the decision to move prisoners to halfway houses.

According to Bogdan, prisoners become eligible for transfer six months before their release date. On average, all prisoners--including even those with violent records--move to halfway houses between 90 and 120 days before their release, he said.

Milken has 85 days, or less than three months, remaining before his scheduled release.