page 504 The quotation is from Anders and Mitchell, “Junk King’s Legacy.”
page 504 Ingersoll’s mounting debt woes were the subject of Patrick M. Reilly, “Deadline Squeeze,” Wall Street Journal, Mar. 26, 1990.
page 504 The seizure of Columbia Savings and Loan by federal regulators was reported in The Wall Street Journal, Jan. 28, 1991.
page 510 Nearly all plea agreements approved by the Justice Department are revocable in the event the defendant lies subsequent to entering into the agreement, as Boesky’s was. But not Milken’s. In paragraph six of the Milken plea agreement, dated Apr. 22, 1990, four events are cited that render the agreement revocable. Subsequent false testimony isn’t cited. (The government did reserve the right to charge Milken for perjury, but such cases are notoriously difficult to prosecute, the Jones conviction notwithstanding.) This provision was a remarkable concession, suggesting the government’s desperation to reach a plea. The provision undercuts the value of Milken’s cooperation, since it is all but a license for Milken to lie.
page 514 The Mulheren verdict was reported in The Wall Street Journal, July 13, 1990.
page 515 Siegel’s sentencing was reported in The Wall Street Journal, June 8, 1990.
page 516 Milken’s role in the collapse of various savings and loans is the subject of pending lawsuits filed by private plaintiffs, including Columbia Savings & Loan, and the Federal Deposit Insurance Commission. In its complaint, the FDIC alleges that Milken, Drexel, and other defendants defrauded numerous S&L’s of unspecified millions. Milken and Drexel have denied the charges.
page 517 Prior to Milken’s sentencing, two weeks of hearings were held at Judge Wood’s direction, beginning Oct. 11, 1990. At the time of Milken’s plea, prosecutors obtained an agreement from Milken’s lawyers allowing them to introduce evidence of additional crimes by Milken for consideration at sentencing. Milken’s lawyers subsequently demanded the right to contest the government’s allegations, and Judge Kimba Wood ordered the government to pick no more than six additional charges and present evidence, giving Milken’s lawyers the right to rebut them. Such hearings are known as “Fatico” hearings, named after the case that established a defendant’s right to contest such allegations. The hearings proved anticlimactic. Boesky wasn’t called as a witness (the prosecutors had been dismayed by his performance at the Mulheren trial) and none of the Boesky-related charges, about such deals as Diamond Shamrock and Pacific Lumber, were presented. Evidence for some of the charges presented seemed inconclusive (see, e.g., Laurie P. Cohen and Wade Lambert, “Prosecutors Fail to Tie Milken to Trades,” Wall Street Journal, Oct. 12, 1990). Judge Wood ultimately disregarded the additional charges, though she said she was persuaded that Milken had attempted to obstruct justice.
page 517 Excerpts from Judge Wood’s statement at the Milken sentencing appeared in The New York Times, Nov. 22, 1990.
Epilogue
pages 519–520 The Milken cover story, “My Story—Michael Milken,” appeared in the Forbes issue of Mar. 16, 1992.
page 522 Depositions in the civil suits against Milken haven’t been made public. The descriptions and quotations in the text were obtained from people with access to the transcripts.
page 523 Details of Milken’s settlement were reported in “Milken to Pay $500 Million More to Settle Civil Suits”, Wall Street Journal, Feb. 18, 1992, and in “FDIC Rejects Plan to Settle Milken Lawsuits,” Wall Street Journal, Mar. 6, 1992. Although the FDIC initially rejected the deal on the grounds that Milken had failed to disclose his assets, it later relented. As part of the settlement, Milken neither admitted nor denied the government’s allegations, including any responsibility for the savings and loan crisis. His lawyers continue to deny that Milken caused any losses.
page 525 Details of the Boesky divorce proceeding, filed as Anonymous v. Anonymous in New York Supreme Court, were first reported in the New York Post.
page 526 In her appearance on “20/20,” Seema Boesky denied that she holds money that was criminally earned by Ivan Boesky, saying, “there is no truth to that.” Nonetheless, much of the profit earned by Boesky for his investors, including his wife and family members, was generated by illegal insider trading.
Photo Credits
1. Joyce Ravid, Onyx
2. Steve Smith, Onyx
3. Arty Pomerantz, The New York Post
4. Robert A. Cumins, Black Star
5, 12, 13, 32. UPI
6, 9, 10, 11, 14, 15, 16, 17, 18, 20, 21, 28, 29, 30. Wide World Photos
7. Tom Fenton
19. Women’s Wear Daily
22. Roger Sandler, Black Star
23. Roger Sandler
25. Michael Garland, Onyx
31. Faye Ellman
Other photos used courtesy of private sources.
Index
Abrams, Floyd, 448
Accuracy in Media, 232
Ackerman, Peter, 62, 133, 211, 224, 236, 242, 246, 252, 260, 354, 367, 460, 470, 472, 474, 476, 477, 480, 498, 523
Adasar Group, 530
Adderly, Paul, 293
Adelson, Merv, 259
Agee, Mary Cunningham, 111
Agee, William, 111–12
Alexander, Norman, 259
Allied Corporation, 113
Allied Department Stores, 501
All-Steel, 229
Altman, Edward, 256
American Express, 395, 439
American Hospital Supply, 199
American Natural Resources Co. (ANR), 156–57, 158, 159, 202
American Savings, 227
American Stores, 145–46
American Telephone & Telegraph, 372
AM International, 218–19
Amsterdam News, 467
Andersen, G. Christian “Chris,” 413
Andrews, Steve, 453, 454, 455
Anheuser-Busch, 17
Anka, Paul, 235
Antoniu, Adrian, 551n
APL, 119
arbitrage, 36–37
Boesky on, 41
Boesky’s book on, 226–27, 320
1987 crash and, 419
Arkin, Stanley, 382, 396–97, 400
Armstrong, Michael, 464, 476, 509
Atlantic Monthly, The, 41, 176, 446
Auerbach, Martin, 525
Auspitz, Jack, 368
Bachelor, Herbert, 56, 133, 246, 414, 479
Baird, Bruce, 21, 425, 434, 437, 449–50, 462, 466, 469, 471, 472, 473, 474, 482, 484–88, 492, 494, 512
Giuliani’s appointment of, 404
resignation of, 508
RICO charges threatened by, 435, 450
Baker, Bobby, 363
Baker, Howard, 558n
Balser, Donald, 240, 370–71, 376
Bank Leu International, 85, 89, 93, 154, 156, 161, 271, 272, 286, 287–88, 290–91, 293–95, 306, 309, 321, 323, 508
grant of immunity and, 291–92
Levine’s cover-up plan for, 276–78, 281–82
Pitt’s visit to, 280–81
SEC investigation of, 273–78
Barr, Thomas, 521, 523
Barry, Kevin, 275, 292
Bass family, 125, 181, 187
Bawl Street Journal, 225
Baxter Tavenol Laboratories, 199
BCM Capital Management, 275–76, 292
Bear, Stearns & Co., 206, 224, 530
“bear hug” technique, 185, 195
Beatrice, 21, 200–202, 203, 222, 224–25, 252, 259, 442, 445, 467, 470, 491, 493, 494, 495
Beck, Jeffrey, 252
Bedford Partners, 46, 47
Belnick, Mark, 523
Belzberg, Mark, 260
Belzberg, Samuel, 260
Belzberg family, 173–74, 206, 235–36, 424, 429, 530
Bendix Corporation, 17, 111–12, 140
Bergman, Richard, 522
Berkman, Paul, 407–8
Berkshire Hathaway, 229, 419
Beverly Hills Hotel, 116, 526
Bialkin, Kenneth, 422, 427
B
ingham, Richard, 142, 152
Black, Leon, 56, 133, 162, 218, 246, 248, 252–53, 460, 472, 474, 476, 479, 480, 498, 505, 523
SEC negotiations and, 482–83
Black Monday, 418–19, 503
Bloomingdale’s, 501
Bluhdorn, Charles, 30
Blyth Eastman Dillon, 73, 78
Boesky, Billy, 42, 48, 532
Boesky, Ivan:
on arbitrage, 41
Atlantic Monthly interview of, 41
background and childhood of, 40–43
Bendix-Martin Marietta takeover and, 112–13
Beverly Hills Hotel acquired by, 116
Billy Boesky on, 48
book by, 226–27, 320
Café des Artistes dinner and, 95–96
Carnation deal and, 170–71, 176–77
CBS takeover attempt and, 232–33, 234
“Chartreuse” file of, 105, 124
Cities Services deal and, 101–5
Clabir-HMW deal and, 142–43
Coastal-ANR deal and, 157
Conoco deal and, 98
Crown Zellerbach deal and, 161
“DBL arrangement” file of, 405
described, 38–39
Diamond Shamrock deal and, 211–13
at Drexel high-yield conference, 138, 260
early career of, 41–44
at Edwards & Hanly, 42–43
employees as treated by, 43–48
false disclosure statement of, 123
Fischbach takeover and, 122–26
Fortune article and, 172–74, 320
Golden Nugget takeover and, 213–14
as government agent, 331–32, 333–34
on greed, 261
Gulf + Western takeover attempt of, 230–34, 514
Gulf Oil deal and, 168–69
Harris Graphics takeover and, 218–19
Jefferies and, 394–95
John Mulheren and, see Mulheren, John
Joseph and, 117–18
Kay’s epithet for, 370
Levine and, 156–59, 253–54, 544n
logo of, 41
in Los Angeles Times article, 173
Lowell Milken’s aversion to, 117
marriage of, 42, 525–26
Martin Siegel and, see Siegel, Martin A.
MGM deal and, 216–17
Michael Milken and, see Milken, Michael
mother of, 171–72
net capital requirements and, 206–8, 547n
net worth of, 328, 526, 532
new office of, 169
penalties paid by, 20, 327, 337, 345–46
Pitt briefed by, 320–25
plea agreement signed by, 331–32
plea bargain of, 510, 559n
prestige sought by, 229–31
in prison, 431, 531
prison inmate letter on, 508–9
private life of, 263–64
psychology of, 555n–56n
puppy incident and, 45
QE II incident and, 264–65
savings and loans investment sought by, 227–29
SEC briefed by, 332–34
SEC code names for, 327
SEC investigation of, 320–25
sentencing of, 420–21, 555n–56n
signature dress of, 43, 532
“special projects” file of, 124, 220
statement to employees by, 338–40
surrender of, 265
University of California address by, 261
work habits of, 44–46
Boesky, Seema Silberstein, 38, 39, 42, 44, 45, 95, 96, 103, 106, 107, 116, 169, 263–64, 339, 525, 526, 532
Boesky, William, 40–41
Boies, David, 521, 523
Boise Cascade, 146, 208, 310
Bond, Alan, 260
bond market, 51
“Born in the U.S.A.” tour, 206, 209
Bossidy, Lawrence, 391, 393, 394, 400, 401
Bradley, Bill, 256
Bradley, Ed, 531
Bradley, Tom, 467
Brady, Nicholas, 507
Brant, Peter, 179
Breeden, Richard, 507
British Water Authority Superannuation Fund, 236
Bromberg, Alan, 480
Brosens, Frank, 195, 492–93
Brown, David, 304, 311–12
Brown Brothers Harriman, 26
Brown-Forman Distillers Corporation, 166
Browning Ferris, 186, 192
Bruck, Connie, 41, 176, 446
Buffalo Partners, 530
Buffett, Warren, 229, 419
Burnham, I. W., II, “Tubby,” 48–49, 50, 51, 57, 472, 479
Burnham & Co., 48, 74, 120, 138
Bush, George, 507
Business Week, 33, 273, 442
Cable News Network, 216
Cacheris, Plato, 458–59
Cahill Gordon & Reindel, 259, 359, 365, 368, 369, 436, 448, 452, 465, 478, 482
call option, 546n
Cambrian & General Securities, 118
Cameron, Dort, III, 125
Campbell, Brian, 270–74, 292, 347
SEC testimony of, 274
Campeau Corporation, 501, 503
Carberry, Charles, 21, 290–91, 292–93, 295, 307–8, 313–15, 320, 326, 327–28, 329–30, 332–33, 338, 344, 354, 364–65, 367, 375, 379–80, 383, 396, 399, 404, 425, 512
Boesky’s employees targeted by, 373
Boesky’s fine as determined by, 327
Kidder-Peabody meeting and, 392, 393–94
Levine interrogated by, 308–11
Levine’s arrest and, 297–98
Rakoff’s meeting with, 354, 355
resignation of, 402–3
Siegel’s meeting with, 357
Thurnher granted immunity by, 376
Williams’s meeting with, 378
Carnation, 21, 170–71, 175–76, 177, 249
Carr, Fred, 67, 122, 130, 218, 257, 259, 416, 454, 521
Carrier Corporation, 108
Carrier Facility, 431
Carroll, John, 372–73, 404, 411, 420, 456, 458, 462, 478, 479, 484–88, 508, 509–11, 512
Carson Pirie Scott, 253
Carter Hawley Hale Stores, 148
Cartusciello, Neil, 379, 391–92, 398–99, 403, 405–6, 408, 410, 484, 512, 515
Cathcart, Silas, 400
CBS, 220, 232–33, 234, 236, 447
CBS News, 35
Cecola, Randall, 163, 254, 309
background of, 148–49
Wilkis and, 148–49, 158, 301–3, 312–14
Central Intelligence Agency (CIA), 42
Centrust, 220, 227
Champion International, 186, 187–88
Chapman, Max, Jr., 247, 390, 400
“Chartreuse” file, 105, 124
Chase Manhattan, 102
Chemical Bank, 54, 102, 361
Chicago Pacific Corporation, 149–50
Chicago Tribune, 146, 310
“Chinese wall,” 542n
Christie, Scott, 30–31
Chung, Janet, 114
Citibank, 59
Citicorp, 68, 69, 70
Cities Service, 101–6, 116, 168–69
Clabir Corporation, 142–44, 148
Clark, Henry, 143–44
Coastal Corporation, 156–58, 159, 202
Cochran, Sue, 114
Cogut, Craig, 464–65, 522
Cohen, Alan, 508, 511, 512
Cohen, Laurie, 416
Coke, Edward, 527
Colgate Palmolive, 34
Columbia Savings and Loan, 66, 123–24, 130, 223, 225, 227, 257, 452, 454, 457, 489, 500, 504, 521–22
C.O.M.B., 411
Comcast, 196
“comfort letter,” 238, 240
Congress, U.S., 27–28, 168, 180, 222, 256, 347, 414, 431, 437, 444–45, 528
Coniston Partners, 193, 196, 197, 406
Connally, John, 363
Conoco, 98, 101
Considine, Frank, 127, 129–30
Continental Group, 182�
�83, 393
Conway, Stephen J., 115–16, 169, 207–8, 225, 228, 229, 234–35, 253
Corrigan, Gerald, 506–7
Coulson, Richard, 280–81, 283
Courtois, Jacques, 551n
Cranston, Alan, 256
Cravath, Swaine & Moore, 161, 233, 264, 280, 521–22, 523–24
Crawford, Gordon, 196
Crédit Suisse, 79, 85
Criton Corporation, 91, 149
Crown, Lester, 151
Crown Zellerbach Corporation, 138, 160–62, 186
Crudele, John, 360
Cruise, Tom, 294
CS-1 (confidential source one), 384, 386
Curnin, Thomas, 366, 369, 371, 377, 448, 452, 462–63, 465–66, 471, 477–78, 479, 482, 485
Curran, Paul, 383, 402, 492
Customs Department, U.S., 279, 296
Dahl, James, 66, 118, 227, 228, 237, 245, 260, 334, 367, 368, 464, 466, 469, 486, 522–23, 530
Drexel’s countermeasures against, 457
earnings of, 63, 242, 243, 436
Flans and, 223
immunity granted to, 457
Milken and, 58–63, 212–13, 341, 363–64
Milken’s plane ride with, 460
wavering loyalty of, 452–56
D’Amato, Alfonse, 256, 273
Davidoff, Michael, 47, 206–7, 208–9, 211, 212–13, 221, 241, 373, 422, 424, 425, 426, 427, 428, 514
Davidow, Robert, 133, 481, 499
David-Weill, Michel, 203–4
Davis, Martin, 135, 230–32, 260, 294
Davis, Marvin, 249, 259, 364
Davis Polk & Wardwell, 404, 492
“DBL arrangement” file, 405
Dean Witter, 56, 190, 191
de la Renta, Oscar, 137
Delaware National Bank, 283
DeNunzio, David, 37
DeNunzio, Ralph, 28, 29–30, 31, 178–81, 182, 183–84, 185, 191, 193, 247–48, 251–52, 360–61, 391
GE ouster of, 400
GE’s view of, 393
Siegel and, 34–35, 108–9, 173, 176, 198–99, 203, 204, 250
Dershowitz, Alan, 519, 521
Dewey, Thomas E., 288
Diamond Holdings, 282
Diamond Shamrock, 21, 164–65, 211–12, 457
Diller, Barry, 135, 259
Dillon, Read, 26, 77, 195, 507
Dingell, John, 347, 444
Distillers PLC, 551n
Dolan, Beverly, 149–50
Dome Petroleum, 98
Donahue, Phil, 533
Doonan, Thomas, 295–98, 309, 332, 335, 357, 360, 361, 362–63, 379, 386
affidavit errors by, 385, 395–96
Freeman arrested by, 380–81
Jones interviewed by, 409–10
Dorfman, Dan, 331
Doris (Siegel nanny), 349, 359
Dresner, Joseph, 236
Den of Thieves Page 66