He is the virtual Rain Man of corporate finance, a fiercely concentrated boy genius adrenalized by playing three-dimensional chess with corporations as pieces. With one revolutionary tactic—aggressively helping companies raise capital with high-yield “junk” bonds-Michael Milken, 43, made $3 trillion available to high-risk ventures, godfathering many new businesses and touching off a frenzy of controversial corporate takeovers. From 1984 to 1987, his own cut of the action was $1.1 billion. In 1987 he set the all-time record for Most Money Earned in a Single Year by a Mortal—he was paid $550 million by his employer, Drexel Burnham Lambert. That works out to $62,785 an hour, year-round.
From that height, then, there was little to wait for but his fall. It came this year in the form of a98-count federal indictment on charges of racketeering and securities fraud. Despite the fact that his most notorious client, Ivan Boesky, and his former employer, Drexel, have pleaded guilty to similar felony counts, Milken says he’s innocent. What is certain is that his fall brought to an end a decade of deal making on Wall Street.
Friends of Milken say that the size of his income inspired the puritan envy of federal prosecutors. And there’s no question that some top capitalists hated him, fearing his boardinghouse reach. (Donald Trump, on learning that Milken earned $550 million in one year, said, “You can be happy on a lot less money.”) Intriguingly, Milken did everything with money except spend it. No breathtaking shopping. No lust for fame. At Drexel he was known for his worn-out shoes and was so keen on privacy he kept his photo out of the firm’s annual report. Raised in Encino, Calif., he returned there after attending the Wharton School in Philadelphia and working a few years in New York City to lead a quiet suburban life with his onetime high school sweetheart, Lori, 42, and their three children. Only since his indictment has Milken taken any pains with his public image, allowing a few reporters a glimpse of his unostentatious home and stepping up his charitable donations, which have now topped $350 million. Personal wealth, he insists, has little to do with his machinations. “I think of myself as a doctor,” he has said. “So many companies and people need help.”