Milken in Halfway House, Vows Community Service
Michael Milken, the onetime junk bond promoter who came to embody the Wall Street excesses of the 1980s, Monday checked into an aging halfway house in Hollywood to begin his transition to freedom and a life he says will be dedicated to extensive community service work.
After serving 22 months for securities fraud and other violations, Milken was released from a minimum-security federal prison camp at Pleasanton, Calif., early Sunday morning, a day earlier than prison officials previously announced.
Milken was given until Monday to arrive at the Vinewood Re-Entry Halfway House, where a Manila time card awaited him in the facility’s lobby. He arrived about 8:15 p.m.
“It’s great to be back in L.A.,” he said, smiling politely to a group of reporters waiting outside the facility. He said he hoped to work in education in some capacity. Asked if he had made New Year’s resolutions, he said, “I want to spend more time with my family.” He declined to answer other questions.
Milken reportedly spent his first hours of freedom visiting with his wife, Lori, and three children, as well as talking to his lawyers. He said he also had been in meetings to discuss setting up educational programs for Los Angeles-area youth.
Like most residents, Milken will be required to be in the halfway house between 6 p.m. and 6 a.m. daily, unless a job mandates different hours.
“My current plans are to comply with my obligations to the halfway house and to the court. I will again involve myself in community activities that I care about and the fulfillment of my community service program,” Milken, 46, said in a statement released earlier in the day.
“I obviously have seen great changes in my life, and as this next chapter begins, I will do my best to make a worthwhile contribution to the community.”
Milken, who is scheduled to remain at the halfway house until March 2, will be required to perform 1,800 hours of community service during the next three years. The former Drexel Burnham Lambert executive’s initial 10-year prison sentence was reduced to two years because of his cooperation with government authorities. Milken pleaded guilty in 1990 to six counts of securities laws violations after a massive government investigation.
The former junk bond wizard, who has paid $1.1 billion in fines and settlements of civil claims, is still estimated to be worth several hundred million dollars. His new residence is less than 15 miles from his family’s Encino home, but it is a world away.
The Vinewood halfway house is a federally contracted facility that houses about 45 men and women who have been released from prison. The rambling, white-and-tan, three-story house was built in 1927 and is said to have once been owned by silent movie star Mary Pickford.
Residents have access to a small coin-operated laundry room and an outside recreation area.
Milken’s new neighborhood of older homes and apartment buildings is a short walk from the busy intersection of Sunset Boulevard and Western Avenue. Nearby businesses include an X-rated theater and the White Horse, which offers “mini-disco, cocktails, pool.”
Residents say prostitutes and drug dealers frequent the area. Across the street, a studio apartment rents for $375 a month.
The mostly run-down neighborhood is littered with broken auto glass, and many of the buildings have for-rent signs in the windows.
Many of Milken’s new neighbors had not heard of his Wall Street exploits, but they were happy to share a street with a man who, in 1987 alone, earned more than $550 million.
“I think he’s going to think this is a little bit strange. It’s not his kind of living,” said Tom Fiedler, a homeless man who has lived beneath a nearby freeway overpass for nine years. Fiedler’s tips to Milken included “stay inside” and “stay away from Western Avenue.”
The neighborhood “is what you make of it,” he said. “It can be good. It can be bad.”
Patricia Forman, the program manager at Vinewood, said that Milken has a job lined up, but declined to elaborate. But Lorraine Spurge, a longtime friend and one of Milken’s closest aides during his Drexel days, said Milken will spend the next few months meeting with community leaders to determine how best to use his talents, probably by setting up some sort of education program.
“The only consistent thing he’s told me is education,” said Spurge, who heads a Beverly Hills consulting firm. Milken has spoken of setting up a motivational CNN-like cable network for teachers and of developing interactive educational software of some sort, Spurge said. Milken, a friend of Rebuild L.A. co-chairman Peter V. Ueberroth, also might be considering lending a hand in getting the city back on its feet, she said.
Milken has been barred from working in the securities industry by the Securities and Exchange Commission.
Next-door neighbor Alex Stancevic was unimpressed with the notoriety of the new halfway house resident. He said the facility has had plenty of wealthy occupants in the past, most of whom had served time for drug and alcohol offenses.
“Their cars range from Rolls-Royces to the cheapest car you have,” he said. “Most of the time it’s quiet. Nobody has a problem here.”
As for Javier Perez, who was visiting his sister across the street, he would like to meet Milken.
“I would ask him to loan me only $10,000,” Perez said, with a laugh.