Lying, Cheating, Conniving Manipulator
Michael
Milken again “milking” government
to regain his wealthy ways – this look back in criminal history to Milken’s
criminal ways and call it: “Milken Crimes 2019.”
RENO, NV (NY TIMES)
— In the 1980’s, Michael Milken embodied Wall Street greed. A swashbuckling
financier, he was charged with playing a central role in a vast insider-trading
scheme and was sent to prison for violating federal securities and tax laws.
Milken has spent the
intervening decades trying to rehabilitate his reputation through an
influential nonprofit think tank, the Milken Institute,
devoted to initiatives “that advance prosperity.”
These days, the Milken
Institute is a leading proponent of a new federal tax break that was intended
to coax wealthy investors to plow money into distressed communities known as “opportunity
zones.”
Milken, it turns out, is in a
position to personally gain from some of the changes that his institute has
urged the Trump administration to enact.
In one case, the Treasury Secretary, Steven Mnuchin, directly intervened in a way that benefited Milken, his longtime friend.
The Milken institute’s leaders have helped push senior officials in the Trump
administration to make the tax incentive more generous, even though it is under
fire for being slanted toward the wealthy.
It is a vivid illustration of the power that Milken, who was barred
from the securities industry and fined $600 million as part of his 1990 felony
conviction, has amassed in Trump’s Washington.
Milken’s crime: He was a Wall Street legend. He pioneered the junk bond, which enabled financially risky companies to
borrow billions of dollars and ignited a wave of often-hostile corporate
takeovers that came to define a go-go era.
His firm, Drexel Burnham Lambert, hosted an annual event, which came to
be known as the Predators’ Ball, where the era’s greatest financiers mingled. Milken
became a billionaire.
Then, in 1989, federal prosecutors charged him with violating
securities and tax laws and with being part of a lucrative insider-trading
ring. The next year, Drexel Burnham went bankrupt.
Milken pleaded guilty and was sentenced to 10 years in prison and paid
$600 million in fines. After cooperating with the government, he ended up
serving about two years behind bars.
In addition to the favorable
tax-policy changes, some of Trump’s closest advisers — including Mnuchin, Jared
Kushner and Rudy Giuliani — have lobbied the president to pardon Milken for his
crimes, or supported that effort, according to those familiar with the effort.
While the Milken Institute’s
advocacy of opportunity zones is public, his financial stake in the outcome is
not. The former “junk bond king” has investments in at least two major real
estate projects inside federally designated opportunity zones in Nevada, near Milken’s
Lake Tahoe vacation home, according to public records reviewed by The New York
Times.
One of those developments, inside an industrial park, is a nearly
700-acre site in which Milken is a major investor.
Last year, after pressure
from Milken’s business partner and other landowners, the Treasury Department
ignored its own guidelines on how to select opportunity zones and made the area
eligible for the tax break, according to people involved in the discussions and
records reviewed by The Times.
The unusual decision was made
at the personal instruction of Mnuchin,
according to internal Treasury Department emails, and that came shortly after
Mnuchin had spent time with Milken at an event Milken’s institute had hosted.
Annie Donovan, who ran the Treasury Department office
in charge of designating areas as “opportunity zones said: “People were
troubled.”
Donovan and two of her former
colleagues said they were upset that the Treasury secretary was intervening to
bend the rules, though they said they didn’t realize at the time that Mnuchin’s
friend, Milken, stood to make huge profits.
Donovan said: “Agency employees were put in a position
where they had to compromise the integrity of the process.”
The opportunity zone initiative, tucked into the tax cut bill that Trump
signed into law in 2017 (White House signature initiative).
It allows investors
to delay or avoid taxes on capital gains by putting money in projects or companies
in more than 8,700 federally designated opportunity zones.
Trump boasted it
will revitalize downtrodden neighborhoods. But the incentive, championed by
some Democrats, has been criticized as a gift to wealthy investors and developers
as a tax break targeted towards people with capital gains – the vast majority
of which are held by the very richest investors.
The Treasury permitted
opportunity zones to encompass not only poor communities but some adjacent
affluent neighborhoods. Much of the money so far has flowed to those wealthier
areas, including many projects that were planned long before the new law was
enacted.
Investors and others —
including Milken’s institute — have been pushing the Treasury Department to
write the rules governing opportunity zones in ways that would make it easier
to qualify for the tax break. That campaign worked, and Milken is among the very
rich who are potential beneficiaries.
My 2 cents: My hunch but only a hunch after reading this astonishing story
is simple: Crime pays – especially for those in the TPAIC (Trump Power and Influence Circle). (I just made that up)...
Plus, controlling most of government as Trump does including the major departments
tied to this story (e.g., Treasury, Interior, and of course Justice) allows
Trump and his ilk to basically run their money-grubbing free-wheeling not-so-secret cabal.
B/L: Milken I am sure gave kickbacks to those who apparently did and still
are helping him regain his billionaire status he lost years ago and they
re-writing rules and law changes that benefit Milken, he in turn, dishes out
benefits to them.
Sounds bizarre I know – but the facts tell a different story –
the truth, which is still evolving.
So, who says “crime doesn’t pay?” Stay tuned for more I am sure.
Thanks for stopping by.
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