After pleading guilty to six counts of securities fraud last week, Michael Milken probably won't remain a billionaire much longer.
By most calculations, the trim, suntanned California native will still be worth half a billion if not more, almost as much as he has to pay to the U.S. government to settle the charges. That $600 million fine represents more than six times the fine Ivan Boesky, his partner in securities fraud, paid and four times the entire budget of the Securities and Exchange Commission last year.So how are Milken and family going to survive once their fabulous wealth is cut in half?
Well, the Milkens may have one less mouth to feed at least for the next three or four years - if prosecutors manage to convince U.S. District Court Judge Kimba Wood to put the main Milken breadwinner behind bars. In addition, the Milkens should really see an improvement in their cash flow once Milken can stop paying out an estimated $2 million a month in legal fees.
But, according to Milken's friends, money has never had much to do with the family's lifestyle or with what drove Milken to do billion-dollar deal upon deal.
"The money is a side issue. It has always been a side issue with Michael," said Martin Klein, a Manhattan attorney and a close friend of Milken and his younger brother, Lowell. "If you think he did things for the money, then you don't know him. Mike is a visionary who wanted to build for the future, who wanted to be a creator of jobs."
What many might see as an excess in wealth never translated into an excessive lifetsyle for Michael, his wife Lori and three children - Bari, 9, Lance, 14, and Gregory, 16.
"I have one house, one wife, one cat and one car," Milken was once quoted as saying. The line has since become a mantra for some of his friends when asked about what it must be like to be a self-made billionaire.
For more than 10 years, the Milkens have lived in a relatively unimpressive subdivision home with a pool on the former Clark Gable estate at the foot of the Santa Monica Mountains. The home is in the same Los Angeles district where Milken grew up and where most of his immediate family now live.
Though in very recent years Milken had a driver and Mercedes to ease the commute to his office, he had been content to drive himself in a Buick for years. The wheels were bought for him by Thomas Spiegel, the former chairman of Columbia Savings and Loan .
And for all the ambition that drove him to earn money - one friend said he had a deal with Drexel that always gave him a percentage of his department's revenues - Milken is undoubtedly a generous man.
He and his brother Lowell have a group of family foundations with assets estimated at about $350 million. In 1988 the foundations contributed $25 million to public schools in New York and Los Angeles, to cancer and epilepsy research - diseases that have reportedly affected the Milken family - and to other programs serving disadvantaged children.
Since he left Drexel in 1988, Michael Milken has spent time teaching math classes in public and Catholic schools and taking poor kids to the zoo and the circus.
He has also spent time trying to build a new business - International Capital Access - a consulting firm that will help companies finance dreams of expansion.
Most friends and colleagues say it is premature to speculate what the future holds for Milken; jail is a very real possibility. He has been barred from the securities industry for life, but Klein stressed that Milken will have to work.
"He is an active man with a lot of dreams," Klein said, "and he will just have to find himself a place in a less regulated business environment than the securities industry has become."