WASHINGTON — The government's top securities law enforcer and federal prosecutors have written letters opposing a presidential pardon for convicted financier Michael Milken.
Richard Walker, enforcement director of the Securities and Exchange Commission, said "few people have done more than Milken to undermine public confidence in our markets."
President Clinton is considering Milken's pardon request, along with scores of others he has received from or on behalf of convicted Americans. White House press secretary Jake Siewert has said Clinton was expected to act on some of the requests before leaving office on Saturday, and a government source said Wednesday that Milken's request was under consideration.
White House spokesmen declined comment Wednesday.
Milken's crimes cost investors more than $1 billion and hurt the markets' credibility, Walker told White House Counsel Beth Nolan in a letter last month. Even after he pleaded guilty to conspiracy, securities and mail fraud and other charges in November 1990 and served a 22-month federal prison term, Milken secretly and illegally made tens of millions of dollars as a broker, Walker wrote.
The SEC sued Milken a second time in February 1998 for that alleged violation. Without admitting to or denying the allegations, he agreed to repay $47 million in brokerage fees.
The later misconduct, Walker said, showed Milken's "continuing contempt for the law and discredits any claim that he has learned from his mistakes and has been rehabilitated."
Similar letters have come from Mary Jo White, the U.S. attorney in Manhattan, and Benito Romano, who held that job at the time of Milken's indictment, according to reports in The New York Times and The Washington Post.
The SEC provided a copy of Walker's letter on Wednesday.
Milken pioneered the $200 billion market for junk bonds, the risky but potentially high-yielding debt securities that were used to finance the corporate takeover binge of the 1980s. He made billions of dollars for himself and others selling the bonds.
In 1990, Milken was fined $200 million and contributed $400 million to a settlement fund administered by the SEC. Later, he paid an additional $500 million to settle civil lawsuits stemming from the case.
Some influential people, reportedly including one of Clinton's original benefactors, California supermarket tycoon and Democratic donor Ron Burkle, are supporting Milken's pardon request.
They say he has learned from his mistakes and has greatly contributed to society through his work, donations and fund-raising for education and health care.
"These calls just keep coming in every day" from hundreds of supporters, Geoffrey Moore, a spokesman for Milken in his Los Angeles office, said in a telephone interview Wednesday.
Milken has not organized a campaign for a pardon, Moore said. He declined to name the individuals he described as prominent who had written letters offering help, saying their privacy should be protected.
"Mike's philanthropy has been a lifelong effort," Moore said, noting that Milken and his brother Lowell have been involved for many years.
The Milken Family Foundation, established in 1982, is one of the nation's largest private foundations. It focuses on youth, inner cities and minorities and makes some 1,500 $25,000 awards to educators each year.
The SEC's Walker, in his lengthy letter to the White House attorney, said that Milken's philanthropy, while commendable, "cannot erase his simultaneous illegal conduct — conduct that occurred after he was convicted and after he was released from prison. Philanthropy cannot provide a license to violate the law."
Moore disputed Walker's characterization and said the SEC investigation ended without a finding that the law was broken.
Besides Milken, others who might receive pardons include Whitewater figure Susan McDougal and former Justice Department official Webster Hubbell. Clinton has used the constitutional right to grant pardons fewer times than any other president in this century.
Former Rep. Dan Rostenkowski, D-Ill., one-time powerful chairman of the House Ways and Means Committee, was the most prominent of 59 men and women that Clinton pardoned Dec. 23 on their conviction of federal crimes, most involving drugs, taxes or fraud. Also among those pardoned were Archie Schaffer III, a chicken company executive convicted as a result of the investigation of former Agriculture Secretary Mike Espy; and Rick Hendrick III, a NASCAR team owner, banished from the sport for a year after being sentenced for bribery and mail fraud.
Previous presidents have saved controversial pardons for their final weeks in office because it reduces the ensuing political heat. President Bush pardoned six Iran-Contra figures on his last Christmas Eve in office.