Armed robbery

By Vin Suprynowicz
web posted May 1998

Americans used to speak with a mixture of disgust and condescension about the routine methods of bribe extraction practiced by police in the Third World -- pull over the motoring tourist in his rental car, make ominous noises about having to throw the offender in jail, and then suddenly let it be known that it can all be taken care of, if only the victim will "pay the fine right here."

Well, Paul Craig Roberts -- former Treasury Department subaltern during the Reagan administration -- makes a convincing case that America's "Department of Justice" is now engaging in fund-raising tactics little removed from that old standby of Tijuana justice.

"Junk Bond King" Michael Milken -- now semi-retired to Northern Nevada -- "has been thrice held for ransom" in unjustified prosecutions, Roberts argues in a March 31 column in Investor's Business Daily.

"Milken was first grabbed by U.S. Attorney Rudolph Giuliani and the Securities and Exchange Commission," Robert writes. "Milken forked over $600 million to buy his way out of a 98-count indictment that University of Chicago law professor Daniel Fischal has shown to be as phony as a $3 bill.

"Milken was next seized by the Resolution Trust Corp. and the Federal Deposit Insurance Corp. These agencies ludicrously blamed the collapse of the savings and loans on junk bonds. To buy his way out of endless litigation" -- funded by the taxpayers, of course -- "Milken handed over $900 million."

But the latest version of "Your cow was trespassing; we're fining her a gallon of milk" was the most outrageous, in Roberts' view.

Milken agreed last year to serve as a consultant in merger negotiations among MCI Communications, News Corp., and New World Communications, only after a careful review by attorneys to make sure his role could in no way be interpreted as that of a securities broker, which would risk violating terms of his parole.

Nonetheless, Roberts reports, "The SEC's robber barons grabbed Milken again." Casting covetous eyes on the $42 million consulting fee Milken had been paid by News Corp.'s Rupert Murdoch and MCI's Bert Roberts, the regulators demanded Milken fork it over -- plus a $5 million bonus -- before they would give him a clean bill of health with his parole judge.

Milken paid up on Feb. 26. Once the government had his money in hand, the Justice Department wrote to the judge, indicating it had found no reason to pursue Milken for parole violations -- that Justice had decided he was innocent of any wrongdoing before he handed over his latest ransom.

Thus, "The money extracted from Milken is neither fine nor penalty and was not a payment for wrongdoing," writes Robert for the Business Daily. "Proof of the point is that the $47 million went into the Treasury's general fund and not into a fine fund. ... In other words, Milken was held up and robbed by the SEC in broad daylight for no other reason than the power the SEC has to extract ransoms from chosen victims."

Furthermore, Robert concludes, "The Justice Department was an accomplice in the extortion of Milken. In violation of rules of evidence, Justice withheld exculpatory evidence and kept secret its findings that Milken had committed no wrong until after he had paid his ransom. Indeed, the SEC timed the extortion to take advantage of Milken's vulnerability -- his term of probation expired on March 1. What we have witnessed is a conspiracy between the SEC and the Justice Department to rob a man of $47 million."

All this would be bad enough if we could believe Mr. Milken alone had been singled out for such attentions. But in a passing reference in its March 9 coverage of the federal "antitrust" case against Bill Gates' Microsoft, Newsweek mentions the same antitrust team has "painful memories of the endless 1970s and '80s IBM breakup case, which turned into an O.J.-like courtroom comedy until it was rendered moot by a market-spawned challenger to IBM ... Microsoft."

How's that again? The "crimes" in question became "moot" once the chosen victim lost his preeminence in the market, and thus his attractiveness for milking? So a necessary part of the definition of this "crime" is success, while all one must do to escape official "justice" is to lose market share?

Curiouser and curiouser.

Still, many an American will doubtless mimic Aunt Polly in The Adventures of Tom Sawyer, figuring these rascal billionaires must have done something to merit their punishments, while blithely assuming those of us without millions in the bank need never worry about being victimized by such tactics.

Sure. Just like they assured our grandparents that no one but millionaires would ever have to worry about paying "the income tax."

Vin Suprynowicz is the assistant editorial page editor of the Las Vegas Review-Journal. Readers may contact him via e-mail at The web site for the Suprynowicz column is at The column is syndicated in the United States and Canada via Mountain Media Syndications, P.O. Box 4422, Las Vegas Nev. 89127.

Current Issue

Archive Main | 1998

E-mail ESR




1996-2020, Enter Stage Right and/or its creators. All rights reserved.