21.
WALL STREET,
JEWISH / ISRAELI ETHICS,
AND THE WORLD OF FUND RAISING
* Jewish dictate holds that
the Jewish collective community
is morally superior to all others
and that, throughout history,
they are victims of innocence.
The next two chapters represent
merely the beginning of an inquiry
into this enforced myth, a myth
represented everywhere in American
popular culture as fact.
Among the economic fields
in which Jews today are especially
visible is investment banking
-- "Wall Street," including interconnected
networks of lawyers and other
legal and economic manipulators
stretching deeply into Hollywood
and the mass media. Since the
1800s the "Old Crowd" of German-Jewish
banking families (the Seligmans,
Lehmans, Goldmans, Sachs, Warburgs,
Schiffs, Loebs, et al) had predominated
the field; a "New Crowd" of Jews
has in recent decades taken their
place. After World War II, melodramatically
note Judith Ehrlich and Barry
Rehfeld, "economic power in America
and Wall Street was shifting ...
Fresh faces came forward as if
answering a call ... They were
the children and grandchildren
of Italian, Irish, Poles, and
other Europeans who were not of
Anglo-Saxon ancestry. But most
of all they were Jews." [EHRLICH,
p. 12] This is not to suggest
of course that the seminal Jewish
American investment firms are
today inconsequential. Far from
it. In 1999, for instance, Goldman,
Sachs and Co. stretched across
the world to become the "single
largest and controlling shareholder
of South Korea's largest bank,
Kookmin. [BLOOMBERG NEWS, p. 11]
"In the
world of high finance," observed
Gerald Krefetz, "Jewish interest
is concerned with investment banking,
a broad catchall for activities
ranging from tendering advice
to underwriting securities. The
heart of investment banking is
public offerings and private placements,
the risking of capital -- sometimes
ones' own, but more often other
peoples' -- to finance new companies,
or expand old ones." [KREFETZ,
p. 54] The nature of Wall Street
entrepreneurship might well be
presumed in the title of a 1986
volume by Ken Auletta: Greed
and Glory on Wall Street: the
Fall of the House of Lehman,
or Martin Meyer's Nightmare
on Wall Street: Salomon Brothers
and the Corruption of the Marketplace
(1993). Both Lehman and Solomon
are Jewish-founded firms.
A French Jewish
commentator, Bernard Lazare, noted
Jewish propensities in high finance
in the late 1800s:
"The man of
the lower middle class, the small
tradesman at whom
speculation
has probably ruined has much clearer
ideas of why he
is an anti-Semite.
He knows that reckless speculation
[by financiers],
with its attendant
panics, has been his bane, and
for him, the most
formidable jugglers
of capital, the most dangerous
speculators, are the
Jews; which,
indeed, is very true." [LAZARE,
B., p. 173]
Finance, investment
banking, brokerage, and commodities
are the speediest ways (short
of outright crime) to get rich
in America; by 1988 the stock
and bond market and linked economic
activities totaled 12 trillion
dollars a year (six times the
value of the assets of Fortune's
top 500 companies). "Where the
money went," note Ehrlich and
Rehfeld, "and what happened to
it were greatly influenced by
Wall Street power brokers." [EHRLICH,
p. 19] Corporate mergers, acquisitions, and
takeovers have become an especially
lucrative field. "By the 1980s,
says Ehrlich and Rehfeld, "along
with [Gentile] T. Boone Pickens,
and a few others ... the [Jewish]
New Crowd was at the very core
of the mergers and acquisitions
field." [EHRLICH, p. 15].... [This
circle of money men] bought luxurious
homes, expensive art, high-priced
foreign cars, designer clothes
and jewelry; they hosted or appeared
at the right parties." [EHRLICH,
p. 16] ... The old WASP establishment
had seen its wealth eroded by
changing tax laws and inflation
... arriviste Jews began to appear
on the boards of such time-honored
WASP institutions as the Museum
of Art, the Metropolitan Opera,
and the New York Public Library."
[EHRLICH, p. 5] ... The New Crowd
broke the stranglehold of the
Establishment WASP bankers and
[older Jewish] Our Crowd competitors
... and extended profit centers
to newer financial activities
such as block trading, risk arbitrage,
a wide range of retail securities
products, financial futures, listed
trading of options, and junk bond
financing that helped companies
expand and made almost every company
vulnerable to a takeover, a leveraged
buyout that restructured corporate
entities and raised critical debt
levels." [EHRLICH, p. 394]
In the 1970s, "hostile
turnovers," notes James Stewart,
"bore an unsavory taint. They
generated bad feelings, especially
toward those who represented the
attackers. This sometimes alienated
other clients. Much of the WASP
investment banks and loan firms
preferred to leave such work to
the other firms, many of them
Jewish." [STEWART, p. 25] "Various
techniques and instruments were
used in the Wall Street boom of
the 1980s," says Norman Cantor,
"but the most consequential --
and lucrative was the floating
'junk' (low grade) bond to provide
capital for involuntary takeovers
of one company by another ...
Fiscal critic Benjamin Stein [sees]
the junk bond device as a huge
fraudulent Ponzi scheme generating
temporary money pools that could
be looted by ruthless investment
bankers and corporate executives
and their overcompensated lawyers."
[CANTOR, p. 402]
William Leach
traces the influence that those
in investment banking have had
in shaping America, both economically
and in influencing the nation's
values:
"The growth
of investment banking and mass
consumption industries
were (and
still are) closely related developments
... Bankers assisted in
undermining
the competitive ethos by directing
business interest toward
concentration
and easy economic fixers. They
helped local monopolies
become
major national 'players' almost
instantaneously. Banker-inspired
megalomania
reinforces an already clear pattern
in the economy away from
'making
goods' to 'making money.'" [LEACH,
p. 275]
There is a long list
of Jewish entrepreneurs on Wall
Street who, as a group, have been
influential in literally changing
the American economic system.
Sanford I. Weill, for instance,
"amassed a brokerage empire and
eventually became President of
American Express;" he was later
"recognized as one of the most
powerful Jewish businessmen in
the nation."
[EHRLICH, p. 13] John Gutfreund
rose to become the chairman of
Solomon, Inc., "one of the most
powerful securities firms in the
western world." Felix Rohatyn
"perhaps more than any other,
was linked with the flood of massive
corporate combinations that reshaped
American business for much of
the past three decades." [EHRLICH,
p. 14]
Sanford C. Bernstein &
Co., valued at around $3.5 billion
and with assets of $90 billion,
is "one of the biggest closely
held U.S. money managers." It
manages $55 billion "for institutions,
such as pension funds, endowments
and foundations, and $35 billion
for wealthy individuals." [BLOOMBERG
NEWS, INTL HERALD, p. 10]
Other influential
Jewish Wall Street 'players' (financiers,
lenders, borrowers, advisers,
lawyers, et al) in recent years
have included Alan Greenberg,
Ira Harris, Bruce Wasserstein,
Jerome Kohlberg, Henry Kravis,
Peter Cohen, Joseph Flom, Martin
Lipton, Victor Posner ("a onetime
Baltimore slumlord" [FORBES, p.
45] who was indicted in 1982 for
$1.25 million in income tax evasion
and filing false tax returns [BRENNER,
p. 72]), [Posner is "the flamboyantly
wealthy Miami Beach financier
[who has] been discredited as
one of the most unprincipled and
destructive modern corporate raiders."
[BIANCO, A., 1991, p. 31], Nelson
Peltz, the Belzbergs, and many
others. Alan Greenberg is the
head of Bear Stearns, Stephen
Schwarzman founded the Blackstone
Group, a prominent investing
firm. Well-known traditional Jewish
investment banking houses include
Lehman Brothers, Lazard
Freres, Goldman Sachs,
Salomon Brothers, Bache
& Co., and Cantor/Fitzgerald.
[SILBIGER, S., 2000, p. 78-79]
"Jews took the lead in the '60s,"
notes Jewish business author Steven
Silbiger, "with new investment
banking techniques that helped
introduce a conglomeration craze
by using multipurpose holding
companies ... The concentration
of Jewish-owned securities firms
created well-paying employment
opportunities at all levels of
the securities industry: securities
analysts; portfolio managers;
and stock, bond and futures traders;
brokers and deal-makers. Among
the equity holders of the Jewish
investment banking and trading
firms on Wall Street are hundreds
of Jewish millionaires. Upward
mobility based on merit and high
salaries has made working on Wall
Street a Jewish-friendly career
choice ... Although exact figures
for the numbers of Jews are not
available, they no doubt have
a leading and disproportionate
role on Wall Street." [SILBIGER,
S., 2000, p. 78-80]
In a book entitled, "The Money
Machine," about the KKR
company (Kohlberg, Kravis, and
Roberts), the author address three
more Jewish Wall Street members:
"Here
were three men who started a firm
in 1976 with a few million
dollars
and ten years later had control
over what is believed to be the
largest
corporate empire in the world
... Why did their names arouse
such
intense emotions, ranging from
envy, to awe, to fear?"
[BARTLETT,
p. x]
By 1999, KKR controlled 23 companies. Among
others, its stable included the
Amphenol Corporation, Boyd's Collection Inc., Idex Corporation, Kindercare Learning Centers, Primedia Inc, and Gillette. It also made $5.9 billion
profit in 12 years of ownership
of America's second largest food
retailing chain. By the 1980s,
the company had "$45 billion in
buying power," a sum "greater
than the gross national products
of Pakistan or Greece." [BURROUGH/HELYAR,
p. 130]
A
Jewish investment financier, Jeff
Beck, has been afforded an entire
volume about his life, entitled
Rainmaker. "By the end
of the 1980s," notes its author,
"[Beck] was living a life of deceit
so absolute that in effect his
true personality had become turned
inside out ...[BIANCO, A., 1991,
p. 18] ... As money and money-making
were glorified in the Reagan years,
Beck's pursuit of wealth and the
social status derived from it
flowered into a full-fledged mania."
[BIANO, A., 1991, p. 12]
Another
Jewish financier, Carl Icahn "rose
from obscurity to become one of
the most feared corporate raiders
in the country, Chairman of TWA, the largest shareholder in Texaco
and USX (formerly US Steel) and
a billionaire ... [EHRLICH, p. 15] ... [Icahn was] perhaps
the most successful financial
predator of them all." [EHRLICH,
p. 290]
Icahn is particularly notable
for his repeatedly ruthless campaigns
to take over unwilling companies,
loot them for obscene profits,
and -- successfully taking them
over or not -- spitting them out
again, leaving a wake of relative
ruin. In 1982, for instance, Icahn
warred with the whole community
of Danville, Virginia, in his
hostile bid to takeover a corporation
called Dan River. Townspeople
unified to resist him, investing
retirement money and other savings
into company stock. The company
finally resisted the financial
predator with a leveraged buyout;
Icahn, however, managed to strip
the town's economic lifeblood
of $8.5 million." In another much
publicized financial effort, during
early attempts [eventually successful]
to take over TWA Airlines the company president,
then C. E. Meyer, Jr., called
Icahn "one of the greediest men
on earth." [BROCK, p. 171] By
1998 he was attempting to take
over Pan Am airlines.
In an attempt to ward off Icahn's efforts
to take over the Phillip's petroleum
company, it had to go $4.5 billion
deeper in debt, as well as cut
hundreds of millions of dollars
of capital expenses, sell off
$2 billion in assets, limit investor
dividends, and tighten budgets.
5,000 fewer employees were working
for Phillips by the time Icahn
was through. [BRUCK, p. 191] Icahn
walked away from Phillips unsuccessful
after a 10-week struggle to seize
the company, but $52.5 million
richer.
"The business establishment
took notice [of Icahn's recurrently
nasty dealings]," notes Connie
Bruck, "One close associate of
Icahn recalled that Laurence Tisch
[the Jewish] chairman of Loews
and now of CBS,
Inc., said to him, 'Tell Carl
to cut this out. It's not good
for the Jews.'" [BRUCK, p. 160]
And what of
this sensitivity to issues of
Jewish concern on Wall Street,
Jewish solidarity, and Jewish
economic influence, particularly
(but not only) with regard to
Israel? In 1974 Stephen Isaacs
noted a premiere example:
"Gustave Levy
[is the] managing partner of the
important Goldman,
Sachs, and Company investment banking
firm ... Many have regarded
Levy as
the most powerful single individual
on Wall Street, able to make
or break
men and companies almost casually.
He personally controls the
movement
of billions of dollars. 'Gus is
very conscious of being Jewish.
He's very
conscious of the problems it can
cause,' said Philip Greer, a
one-time
stockbroker who had reported on
Wall Street ... 'When you
talk about
Jewish muscle, Gus will back off
-- 'I don't make waves, [he
says],
'I've got it, and I can use it,
and I know how to use it, and
I do
use it,
but I'm not going to talk to you
about it because then that redneck
in Alabama
is going to get very upset and
I don't want him to know
about
it.’.... In the Six Day War Gus
was sending money over [to Israel]
like crazy.
He would have financed the whole
war all by himself. And he
made no
bones about whether you were Jewish
or not. 'You need
Goldman, Sachs.
I need you now. If I don't get
you now, you aren't
getting me later.'
It was as simple as that. He could've
raised it from
Schwartz or
O'Reilly, it didn't make any difference
to him, because
they're both
after the money that Gus controls."
[ISAACS, p. 263]
In 1995, Wall Street financier Michael
Steinhardt (wizard of the moneymaking
device, the "hedge fund") closed
his company, Steinhardt
Partners, to concentrate more
deeply upon spreading the message
of Jewish and Israeli identity
so dear to him. With a personal
fortune of $400 million, he joined
as a member of a consortium that
bought Israel's Bank Hapoalim and the Maritime Bank. One of his brainchildren,
called "Birthright," was by 1998
still in its developmental stages;
it is a plan to bring all young
American Jews for trips to Israel,
to renew their roots to Jewish
and Zionist identities. "As part
of the birthright of every Jew
on this planet, we want to offer
free trips to Israel in their
formative years," says Steinhardt.
[RABINOVICH, p. 20] A building in Manhattan for renewal
of Jewish identity was purchased,
and there has been sponsorship
of the Jewish Campus Service Corps
to pull young Jews to Jewish programs
at national campus Hillel centers.
By late 1999, "Birthright"
was in progress, at a cost of
$210 million. "Funded by the Israeli
government, in partnership with
Jewish philanthropists and communities
abroad," college-age Jews in America
competed in a lottery for free-trips
to Israel with the expressed purpose
of being socialized into deeper
identification with the Jewish
state. The goal is to transport
50,000 Jews a year to connect
to the tenets of Zionism. Not
all Jews are happy with the program.
The chairman of the World Jewish
Congress, for example, Isi Leibler,
thought there were many more worthy
applications of the funds. Many
Jews getting in on the program
too, he noted, were already "from
affluent homes." [GREENBERG, J.,
2000, p. A1]
"It can be said,"
suggested Gerald Krefetz in 1982,
"that Jewish wealth is generated
from the financial side rather
than the operational side. Many
wealthy Jews have climbed the
corporate ladder through law,
accounting, and investment banking.
Apparently, they are more at home
massaging numbers than dealing
with technical or substantive
problems of production ... [KREFETZ, p. 69].... If Jews are drawn
to the financial side, it is probably
due to the fact that in the last
decade or two the financial tail
wags the industrial dog." [KRAFETZ,
p. 69]
"Greed knows no bounds,"
said the New York Director of
the Securities and Exchange Commission
in 1986, "there's always someone
who makes more than you do. Investment
banking is the new gold mine."
[HOWE, p. 413] In the same year
New York psychiatrist Samuel Klagsbann,
who had "a lot of lawyers handling
mergers and acquisitions" as patients,
noted that for these people "business
is God." [HOWE, p. 413]
"In the field of takeovers
and mergers the sky is the limit,"
said prominent Jewish financier
Felix Rohatyn (later President
Bill Clinton's ambassador to France),
"Not only in size, but the type
of large corporation transactions.
We have gone beyond the norms
of rational behavior. The tactics
used in corporate takeovers, both
on offense and defense, create
massive transactions that greatly
benefit lawyers, investment bankers,
and arbitrageurs, but often result
in weaker companies and do not
treat share holders equally and
fairly ... In the long run we
in the investment banking business
cannot benefit from something
that is harmful to our economic
system." [EHRLICH, p. ]
In 1986, Dennis Levine
was the first to be caught, a
"dealmaker" at Drexel Burnham
Lambart, for his "insider trading
[exploiting confidential company
information] which opened the
doors to the greatest scandal
in Wall Street history, a scandal
that "caused grave concern within
the Jewish community." [EHRLICH,
p. 17] Not long after, Martin Siegel was also
arrested. As the scandal opened
up, it was discovered that these
wealthy criminals were overwhelmingly
Jewish, including all its central
players. "What was particularly
upsetting from a Jewish perspective,"
notes Ehrlich and Rehfeld, "was
the fact that the [criminal] network
began, in part, when one member
first introduced another to a
third at a United Jewish Appeal
function." [EHRLICH, p. 340]
Connie Bruck,
a Jewish journalist, notes that
"Privately, [lawyer
Martin] Lipton expressed another
concern, one shared
by many of the
businessmen and lawyers who were
part of the Jewish
establishment
in New York, and by some of the
Drexel contingent as
well. They feared
that the common strain among these
nouveau
entrepreneurs
and their nouveau banks at Drexel
-- an overwhelming
majority were
Jews -- would unleash a backlash
of virulent anti-Semitism
... As one Drexel
client ... put it: 'It used to
be that the Jews would go [to
WASP lenders]
and they'd beg for money, and
they'd be rejected while
the Gentile
would come in and they'd all go
to lunch and smoke cigars.
Now it's a shift
of power to the Jews. Drexel is
making these huge sums
of money and
the banks comparatively little.
The problem is, all
the entrepreneurs are Jews with
the exception of [T. Boone] Pickens
and
[Carl] Lindner
-- and Lindner, a long time supporter
of Israel, is the most
Jewish non-Jew
I've ever known." [BRUCK, p. 205]
(In 1999, Lindner
became controlling
owner of the Cincinnati Reds professional
baseball
team.)
"It is
hard to grasp the magnitude and
the scope of the crime that unfolded
beginning in the mid-1970s," wrote
a Wall Street Journal editor
James Stewart, "in the
nation's market and financial
institutions. It dwarfs any comparable
financial crime, from the Great
Train Robbery to the stock-manipulation
schemes that gave rise to the
nation's securities laws in the
first place. The magnitude of
the illegal gains was so large
as to be incomprehensible to most
laymen." [STEWART, p. 115] "[Michael]
Milken [and] some of his Drexel
colleagues and anointed players,"
says Connie Bruck, "had made more
money in a shorter period of time
than any other individuals had
done in the history of this country."
[BRUCK, p. 20]
"A variety of critics
voiced their apprehension about
what they saw as greed that had
gone out of control," says Ehrlich
and Rehfeld, "... over the course
of the next three years, it was
revealed that more than a dozen
insiders -- many of them members
of Wall Street's most powerful
firms -- as well as one of the
hottest houses on the Street,
had amassed millions of dollars
in illegal profits. The accused
were charged with violating securities
laws that prohibited insider trading,
that is, they used material confidential
information primarily about impending
merger bids, to profit from securities
and transactions." [EHRLICH, p.
338]
"During the
crime wave," says Stewart, "the
ownership of entire corporations
changed hands, often forcibly,
at a clip never before witnessed.
Household names -- Carnation,
Beatrice, General Foods, Diamond
Shamrock -- vanished in takeovers
that spawned criminal activity
and violations of securities laws.
Others, companies like Unocal
and Union Carbide, survived but
were heavily crippled. Thousands
of workers lost their jobs, companies
loaded up with debt to pay for
the deals, profits were sacrificed
to pay interest costs on the borrowings,
and even so, many companies were
eventually forced into bankruptcy
or restructurings. Bondholders
and shareholders lost millions
more. Greed alone cannot account
for such a toll. These are the
costs of greed coupled with market
power -- power unrestrained by
the normal checks and balances
of the free market place." [STEWART,
p. 16]
A major wheeler-dealer
in the 1980s scandals was Ivan
Boesky, who was (only a year before
his 'public disgrace') also the
Chairman of the New York area
United Jewish Appeal. He also
was a member of the board of both
Yehsiva University and the Jewish
Theological Seminary of America,
as well as a self-described "founder
and supporter" of the Simon Wiesenthal
Center in Los Angeles. "Boesky's Jewish involvement," noted
the Jewish Week, "resurfaced
in the media at the time of his
sentencing in December, with revelations
that he had been taking classes
at the Jewish Theological Seminary
while awaiting sentencing and
that leaders of some organizations
that benefited from his gifts
had written character references
to the court, attesting to his
generosity. The letters have sparked
a new internecine debate among
Jewish activists. Some claimed
that Jewish philanthropies were
'going to bat' for a confessed
felon because they had 'gotten
their cut' from his ill-gotten
wealth." [GOLDBERG, JEWISH WEEK,
1-8-88, p. 41] "Many Jews," wrote
Ehrlich and Rehfeld, "worried
that his trading abuses could
cast a pall over the entire Jewish
community. Not only was he the
most important figure in the scandal,
he was deeply involved in Jewish
philanthropy." [EHRLICH, p. 341],
including a $2.5 million donation
to the Jewish Theological Seminary
for a library to be named after
him and his wife.
This former head of
the UJA was a particularly nefarious
character. He had been fined for
violating New York Stock Exchange
trade laws in the 1970s; [EHRLICH,
p. 317], his 1985 book Merger
Mania was written by a ghost
writer, Jeffrey Madrick, and largely
patterned (without saying so)
on an existing volume by Guy Wyser-Pratte.
[EHRLICH, p. 326] Boesky was the
time of man who watched his employees
throughout his company by a video
system in his office; [p. 324]
he paid up to $5 apiece for catered
lunches so employees wouldn't
have to leave their desks, [p.
36] and "screamed at [employees]
regularly." His oldest son, Billy,
is reported to have called his
father "stark raving mad." [p.
40] Upon Boesky's installment
as the UJA campaign general chairman,
he told his Jewish audience: "We
must make an enormous effort to
encourage people's sense of responsibility
-- to be sure that at the very
top we have the right attitudes
about giving to the campaign.
Attitude filters down." [JEWISH
WEEK, 6-29-84, p. 7]
The biggest fish caught
in the Wall Street scandal, however,
was super billionaire Michael
Milken, the "junk bond king,"
who was charged with racketeering
and mail and securities fraud.
Milken single-handedly threatened
to fulfill in real life the most
profound of traditional anti-Semitic
nightmare fantasies. A former
Milken associate, notes Jewish
journalist Connie Bruck, saw in
Milken "the force of
... obsession, the megalomania,
the conviction of a cause so just
that the end justifies the means
and, finally, the conceptualization
of the corporate vehicle as a
means of extending control nationwide
-- and then worldwide." [BRUCK,
p. 358] "Many billions of dollars
were at his command," notes Bruck,
"capital, as Milken had been saying
and proving for a long time, was
not a scarce resource. The only
limits to his power, it seemed,
would be the limits of his fertile
imagination." [BRUCK, p. 359]
Milken, sometimes present
at Simon Wiesenthal functions
[BRUCK, p. 313], was well-known
for being able to assemble billions
of dollars overnight to aid corporate
takeovers. At a yearly Milken-centered
conference of the world's leading
corporate takeover specialists,
affectionately called the Predator's
Ball, a close Milken associate,
Donald Engel, arranged for high-priced
prostitutes to service the gathered
"predators." [BRUCK, p. 15]
The goal of Milken
and his predatory cronies, says
Leon Black of Drexel Lambart (the
company that was ostensibly Milken's
employer) was to finance "the
robber barons who would become
the owners of major companies
in the future." [BRUCK, p. 149] (Black's father, Eli, was the "rabbinically-trained
corporate chieftain of United Brands" who in 1975 jumped out
a skyscraper window when it was
revealed that he was paying bribes
to foreign governments). [BRUCK,
p. 65] Among the players in this
scenario, Black particularly noted
robber barons Carl Icahn, Henry
Kravits (who guided a $6.2 billion
buyout of the Beatrice company),
Samuel Heyman (chairman of GAF
who bid $6 billion for Union Carbide),
Ronald Perelman, and a lone Gentile,
Rupert Murdoch (who was financed
by Milken to take over Metromedia).
[BRUCK, p. 245]
"By ... 1985...," says
Connie Bruck, "Milken was moving
his players across the M&A
[corporate mergers and acquisitions]
field as though it were a chess
board." [BRUCK, p. 106]
Ron Perelman's rise
is typical. Closely associated
with Milken, his mentor's junk
bonds supported a variety of Perelman-inspired
corporate invasions. Perelman
seized a resistant Revlon
with a company one-eighth its
size, Pantry
Pride. (In 1991 he installed
Jerry Levin to head it). He also
took over a group of tottering
Savings and Loans for $315 million,
suddenly controlling $7.1 billion
in assets. In 1982 Perelman faced
a lawsuit in his takeover of Technicolor. "Taken as a whole," says
Connie Bruck, "the complaint painted
a picture of Perelman allegedly
using deceit and secret deals
-- money here, position there,
whatever it took -- to buy off
the necessary people and get the
company." [DEALY, p. 308] In Perelman's hostile takeover of Revlon, he tried to bribe the CEO of
that company, Michel Bergerac.
[BRUCK, p. 194]
Another key Milken crony was Fred
Carr (born Seymour Fred Cohen),
head of the Beverly Hills-based
First Executive Corporation, described
by Benjamin Stein as "the largest
insurance catastrophe in the history
of the United States." [STEIN,
B., p. 86] Others who made use of Milken junk bonds
to build illusorily business empires
include Perry Mendel and Richard
Grassgreen of the conglomerate
Enstar (in Montgomery, Alabama). Enstar eventually went bankrupt, becoming,
notes Benjamin Stein, "a source
of rage, frustration, and loss
for the people of Montgomery.
They were taken, and taken badly."
[STEIN, B., p. 111]
Mendel and Grassgreen were
convicted of fraud in 1991.
Milken has had a powerful
hand in a wide range of other
attempted corporate takeovers.
"He would cause frightened managements,"
says Bruck, "to focus on short
term gains and elaborate defenses
rather than research and development
that makes for sustained [corporate]
growth. It would cause the loss
of jobs, as companies were taken
over and broken up." [BRUCK, p.
19] Milken aided, for further
example, Eli Jacobs' acquisition
of the Memorex Corporation in 1986. And during
the banking Savings and Loans
scandals of the 1980s, Columbia Savings had a branch office
one floor above Milken's own office;
Columbia CEO Thomas Spiegel eventually
purchased about $4 billion of
Milken's junk bonds. [DEALY, p.
307] In the early 1980s Saul Steinberg,
with Milken financing, had attempted
a hostile takeover of the Disney
corporation. "Steinberg got
calls from friends, Jews and non-Jews
alike," notes Joe Flower, "warning
him, saying, as Steinberg later
characterized it, 'Saul, it's
going to be you -- and with the
name Saul Steinberg it's clear
where you are and what you are
-- taking over another white Anglo-Saxon
Protestant company. In all the
little towns of America they're
going to say, 'That Jew took over
Walt Disney. What would Walt say?' But the warnings did not make Steinberg
hesitate. 'They just made me angry.'"
[FLOWER, p. 112]
In 1969
Steinberg had tried to take over
one of the most important banks
in America, the $9 billion Chemical
Bank. "Those who ... combined
against him," noted Connie Bruck,
"included not only the director
and management of Chemical, but
most of the banking business,
Governor Nelson A. Rockefeller
and the legislature of New York
state, and members of the Federal
Reserve Board and the Senate Banking
and Currency Committee." [BRUCK,
p. 36]
Although
Milken eventually agreed to accept
a six felonies conviction and
pay $600 million (a sum larger
than the yearly budget of the
Securities Commission that sought
to prosecute him) [p. 16], the
prosecution of fabulously wealthy
Milken was no easy matter. There
was, for all intents and purposes,
no money limit to his personal
defense. He and his firm, Drexel,
planned to spend up to $650 million
to fight his conviction. [STEWART,
p. 347] This included a massive
$140 million public relations
campaign to change his public
image from criminal to hero, an
effort "revolving around the theme
that [he and his company] help[ed]
to raise money [that] benefited
every American." [STEWART, p.
346] The public relations firm
Milken hired referred to him as
a "national treasure." [STEWART,
p. 377] In an effort to control
public discourse about himself,
Milken even bought the rights
to photographs of him at all the
news wire companies. [STEWART,
p. 372]
In February 1986 he even
offered to pay journalist Connie
Bruck to not finish, and publish,
a book she was working on about
him and his associates. [STEWART,
p. 381] Expecting a significant
Black presence in the New York
City jury that would try him,
Milken hired an expert on public
relations in the Black community;
the wealthy financier suddenly
had an interest in the underprivileged
and paid for 1,700 ghetto kids
to go to a Mets baseball game.
[STEWART, p. 400] Milken clients
and sycophants even took out full
page ads in major papers, including
the New York Times, proclaiming,
"We Believe in You." [STEWART,
p. 418]
Milken ended up spending
only a little over two years in
prison, a small sacrifice for
the staggering amount of wealth
he accumulated. He was sentenced,
notes Jewish scholar Norman Cantor,
"by a Gentile woman judge who
was married to a prominent Jewish
lawyer. Eventually she found grounds
for sharply reducing his sentence
... The skill of some Jewish billionaires
in skirting the limits of the
law but somehow emerging unscathed,
with the aid of high-priced Jewish
attorneys, and a compliant press,
was remarkable." [CANTOR, p. 404]
Milken court fines alone eventually
amounted to $1.1 billion. Still on probation,
in November 1997 the New York
Times noted that "evidence
of further illegal behavior since
his release might well cause the
