After serving nearly two years in prison for securities fraud, Wharton alumnus Michael Milken is being considered for a presidential pardon, despite numerous objections by legal professionals. Milken, nicknamed the "junk bond king," pled guilty to six counts of securities fraud in 1990. He was ordered to pay more than $1 billion in fines and was barred from the securities business for life. If President Clinton were to pardon Milken, the six convictions would be wiped clean from Milken's record. A leading advocate of pardoning Milken is Democratic fund-raiser Ron Burke. The request for a pardon was made on the basis of Milken's philanthropy, which has amounted to over $750 million in charitable donations. But others say that Milken's crimes are enough to make a pardon inappropriate. "The scope and magnitude of Milken's multiple, willful federal securities law violations alone make a pardon inappropriate," wrote Richard Walker, director of enforcement for the Securities and Exchange Commission, in a letter to Beth Nolan, Counsel to the President. Walker also noted that "philanthropy cannot provide a license to violate the law." Clinton has until Saturday morning -- before the inauguration of President-elect George W. Bush -- to decide whether to pardon Milken, who graduated from the Wharton MBA program in 1979. "Milken's application is pending and is being considered with the rest of the many applications that have been received," a White House spokesman said. The SEC contends that Milken's work as a consultant after his prison release directly violated his ban from the industry. Milken acted as a broker in at least two financial deals, one of which involved a 1994 transaction between News Corporation and New World Communications Group, Inc., which was headed by Perelman Quadrangle benefactor Ronald Perelman. Milken acted as a consultant to Perelman, who is also a Penn alum. Milken then gave up his $47 million in fees without entering a plea after the SEC sued him for restarting his activities as a broker. Mary Jo White, the United States attorney in New York, helped prosecute Milken and remains against his pardon. White wrote a letter to the president expressing her opposition. Securities law experts also believed that a pardon would send the wrong message. "Pardoning Milken would send a negative message to those who think that they can erase their records through money," said Lisa Fairfax, a professor at the University of Maryland. "It's wrong to think that white-collar criminals are less deserving of punishment than others," Fairfax said. Pardons are filed through the Office of the Pardon Attorney at the Department of Justice in Washington, D.C. The department reviews the application and makes a recommendation before passing it on to the president. However, "the discretion is solely with the president," said Chris Watney, a Justice Department spokesman. Milken, who was an executive at Drexel Burnham Lambert, Inc. during the 1980s, transformed corporate takeovers and financing through the use of high-yield junk bonds. His settlement in excess of $1 billion was the largest ever recorded by the SEC. Milken is chairman of the Milken Family Foundation, a charity that funds programs in education and health care. He also founded CaP CURE, the Association for the Cure of Cancer of the Prostate.
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