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Anthony Scaramucci, L.A.'s Gary Winnick encouraging pardon for ‘junk bond king’ Michael Milken

Trump insiders are said to seek pardon for Milken, ‘king’ of junk bonds
Michael Milken attends the Bloomberg Businessweek celebration in New York on Dec. 4, 2014.
(Anthony Behar / Sipa USA / TNS)

Some of President Trump’s current and former advisors have urged him to pardon Michael Milken, the “junk bond” king of the 1980s who went to jail for securities fraud but has since become a high-profile philanthropist and crusader for cancer prevention, child education and other causes.

Anthony Scaramucci, a financier who briefly was White House communications director last year, confirmed Friday that he is among the advocates along with Gary Winnick, a former associate of Milken’s in the 1980s.

At Trump’s inauguration last year, “Gary said to me, ‘Of all the people, given his lifetime achievements and his commitment to health and global progress, Michael has earned a pardon,’” Scaramucci said in an interview.

“It was really an idea that Gary Winnick brought to me at the inaugural,” Scaramucci said, adding that he added his support in meetings with Trump.

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Winnick, who worked with Milken at the now-defunct investment bank Drexel Burnham Lambert Inc. and later founded Global Crossing, a telecommunications firm that went bankrupt, confirmed the conversation with Scaramucci but declined to elaborate.

Milken did not respond to a request for comment, and the White House did not immediately respond to a similar request.

Other proponents of a Milken pardon include Jared Kushner, Trump’s son-in-law and senior advisor, Treasury Secretary Steven T. Mnuchin and Rudolph W. Giuliani, Trump’s outside counsel, Bloomberg reported, adding that they did not respond to requests for comment.

It was Giuliani’s investigation of Wall Street malfeasance in the 1980s, when he was a federal prosecutor, that led to Milken’s guilty plea and imprisonment.

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But Giuliani long has supported a pardon for Milken. In 2000, when he was mayor of New York, Giuliani said he favored a pardon in good part because of Milken’s contributions to cancer research. Giuliani, like Milken, is a prostate cancer survivor.

Interest in pardoning Milken, 71, has swelled following Trump’s decision to pardon several other individuals recently — and the president’s indication that more pardons could be forthcoming.

Among those who have received pardons are I. Lewis “Scooter” Libby, the former aide to Vice President Dick Cheney (perjury and obstruction of justice charges) and conservative commentator Dinesh D’Souza (campaign-finance violations).

A presidential pardon would not allow Milken to step back into the securities business. After he pleaded guilty to six felony counts in 1990, Milken also drew a lifetime ban from securities dealing by the Securities and Exchange Commission, and it would take a separate appeal to that agency to lift that ban.

Milken previously applied for a presidential pardon during the Bill Clinton and George W. Bush administrations, but neither application was granted. Milken currently is not actively pursuing a pardon, according to sources close to him.

Milken has lived in Encino since the late-1970s, and he ran his junk-bond operations in Century City and Beverly Hills.

His think tank, the Milken Institute, is based in Santa Monica and each year holds its Global Conference that attracts Cabinet members such as Mnuchin, along with former presidents, other government officials, corporate executives and celebrity athletes.

Milken long has been a polarizing figure. One side sees him as a junk-bond villain whose work not only landed him in jail but enabled other financiers to launch debt-heavy corporate takeovers that upended industries.

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Others see him as an innovative financial trailblazer who paid for his crimes and then aggressively took up honorable causes with his philanthropy and personal campaigning. Milken has zealously pursued research for cancer and other diseases along with education. The Milken Institute also researches regional economic trends, demographics and financial markets.

Milken rose to prominence in the 1980s when he turned Drexel Burnham Lambert into a Wall Street powerhouse by trading and later underwriting bonds for risky companies.

Those bonds — dubbed “junk” because of their risk but also “high yield” because of their high interest rates — became a favored source of capital for so-called corporate raiders who took over a myriad of companies, often with mostly borrowed money.

Milken became renowned for starting work well before dawn, reigning over a frenzied trading operation from an X-shaped desk, and collecting enormous fees that reportedly earned him an astonishing $550 million in 1987 alone.

But in 1989, as federal prosecutors were pursuing insider trading and other Wall Street abuses, Milken was indicated on 98 felony charges, including racketeering, insider trading and securities fraud.

The following year, Milken pleaded guilty to six counts of more minor securities and tax violations and was given a 10-year prison sentence. Milken served 22 months and publicly became a leading symbol of Wall Street corruption and white-collar crime.

Milken also paid $1.1 billion in fines, restitution and settlements. Yet he’s wisely invested since then and his current net worth is $3.7 billion, according to Forbes.

Although Drexel Burnham Lambert collapsed in bankruptcy in 1990, Milken still looms large in the Los Angeles financial industry because scores of investment bankers and bond traders who worked for him remain in the region at firms such as Leonard Green & Partners and Ares Management.

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james.peltz@latimes.com

Twitter: @PeltzLATimes


UPDATES:

6:10 p.m.: This article was updated with details about Gary Winnick’s business dealings.

4:30 p.m.: This article was updated with staff reporting throughout, including an interview with former White House communications director Anthony Scaramucci.

This article was originally published at 10:20 a.m.


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