Philanthropist King

Thanks in part to Milken's fanatical secrecy, his flurry of acquisitions has received remarkably little public attention. Even Benno Schmidt of the Edison Project oddly pleads ignorance of the Milken for-profit operations. Instead, Milken is widely hailed in the press as a philanthropist, noted for his work in educational and other nonprofits. Long before he began cobbling together an eclectic array of "knowledge" businesses--and even before the law got to him--he was establishing himself as a significant force through his giving. In the early eighties the Milken Family Foundation National Educator Awards were established, and by 1987 Milken was doling out cash prizes to promising teachers and administrators. The awards bestow $25,000 checks annually on "the best" teachers and administrators; 1,330 educators--many widely admired as progressive innovators--have been awarded thus far with nearly $30 million of Milken's money. Milken began another charity, the Milken Scholar's Program (which offers financial aid to selected high school students entering college), in 1989 while he was facing prosecution that would land him in prison. He also dreamed up Mike's Math Club, a concept through which he (himself a product of public schools), and now hired staff, would land their sleighs in inner-city schools to dispense fun and accessible math lessons. Towering over Milken's charitable efforts is his well-publicized $25 million search for a cure for prostate cancer. (He survived a bout in the early nineties, and pumps millions a year into research, besides donating proceeds from his low-fat cookbook.)

Two nonprofit entities, the Milken Family Foundation and a think tank called the Milken Institute, founded in 1991, operate from offices on a palm-tree-lined avenue in Santa Monica, several miles from Moraga. Milken, who was rumored to be frustrated with the institute because of its scholarly remove from the worlds of politics and business, hosted the second of his Milken Institute Global Conferences at the Beverly Hilton Hotel (site of Milken's Predator's Balls in the eighties) in early March. Nobel laureates such as economist Gary Becker mingled with California Governor Gray Davis, controversial Russian oligarch Boris Berezovsky and high-level reps from Goldman Sachs and OppenheimerFunds, ruminating on the future of the world economy. The Milken Institute Review was recently relaunched with former New York Times columnist Peter Passell as editor; Passell's debut issue features contributors ranging from MIT economist Paul Krugman to former Fed governor and George W. Bush adviser Larry Lindsey. Milken himself contributed an article in which he identifies "intangible assets such as human capital, management information systems, software and digital distribution systems"--all on KU's acquisition list--as the key features of today's marketplace.

Former associates say Milken is obsessed with discouraging cynical speculation about links between his for-profit and not-for-profit orbits. A notoriously covert operator in his Wall Street heyday, Milken today has an extra incentive to keep an arm's distance from the details of his for-profit educational ventures: Following his conviction in 1990 he was permanently barred from brokering financial deals. Because Knowledge Universe is a holding company, not an investment firm, and because Milken is a founder and part-owner rather than executive, he is somewhat insulated from such accusations. However, the post-prison Milken has succumbed once to the lure of filthy lucre: In 1998 he admitted to improperly acting as a broker in a deal involving MCI and Rupert Murdoch's News Corporation, coughing up a $47 million fine.

If you believe his personal spokesman, Geoffrey Moore (who doubles as a senior vice president at Knowledge Universe), Milken is basically a full-time philanthropist: "He doesn't have time for interviews; he's too busy saving lives." During a recent TV appearance, Milken dodged Charlie Rose's attempts to discuss anything but his charity work. Moore insists that Milken is just "an investor" in the myriad educational ventures controlled from Moraga. Not so, say insiders, who contend that Milken is the same old business junkie he was at Drexel Burnham Lambert, where he was always at his desk by 4:30 am. "He does it full time, day in, day out," says Joseph Costello, a former Knowledge Universe CEO. "Every day of the week. Forget weekends, holidays. 'Cause that's his life. That's his art."

Milken's brother Lowell ostensibly runs the philanthropic ventures, but it's hard to separate the outfits entirely since the brothers are veritable Siamese twins. "They've been partners in all these things," says Columbia University Teachers College president Arthur Levine, who has followed Milken's attempts at educational reform and innovation closely. "Talking to them, they're almost interchangeable." Throughout his Wall Street career, Milken relied on Lowell, a lawyer by training, to handle both his personal investments and the structuring of tax shelters (Milken cut a deal with prosecutors whereby he took the heat for himself and his brother). "His brother is in with him on all ventures," says Joseph Carrabino, a former president of the California State Board of Education, who served on the faculty of UCLA's Graduate School of Business with Milken and knows both brothers. "He's like his alter ego."

• « Previous
• 1
• 2
• 3
• 4
• Next »

• Get The Nation at home (and online!) for 75 cents a week!
• If you like this article, consider making a donation to The Nation.