Michael Milken is back in the national spotlight. UCLA has welcomed the former junk bond king with open arms to teach its graduate students about corporate financing, a move that has raised hackles in higher education from coast to coast.
A Milken spokeswoman told Business Week earlier this year that Drexel Burnham Lambert’s former head of high-yield securities wanted to take some tarnish off his image by tackling the classroom, and that a full-time professor’s post might be in the works.
So every Wednesday evening from 7 to 10 p.m., Milken regales professor Brad Cornell’s class in capital markets with tales and theories of Wall Street wizardry.
The fact that Milken served prison time for securities fraud and that many consider him a prime factor in the savings-and-loan debacle seems not to matter. As one student told the Los Angeles Times: “He made $550 million in one year. It blows your mind.”
Carol Scott, associate dean of academic affairs at UCLA’s Anderson Graduate School of Management, hastens to note that Milken “has not been hired and is not being paid.”
Rather, she says, Milken is a guest in the class, sharing the floor equally with Cornell and the students. Yet Cornell himself contradicted that, telling a Times reporter he would merely jump in with an opposing view if he felt it appropriate.
The fact that Milken, 47, is not being paid is hardly an issue. Even after being forced to hand over more than $1 billion in court settlements, Milken is still worth a reported $1.5 billion. He reportedly received an advance of $1 million to write his autobiography for Hyperion, a Walt Disney Co. subsidiary, and has established the Milken Institute for Job and Capital Formation. He’s also taping his lectures and hopes to market the videos.
“This whole thing has been blown up by the press,” Scott argued. “This is one class with about 55 students. He really does get challenged. We put things under the academic microscope.”
Scott says Milken taught at the school before his conviction. But she admitted that Milken’s presence at UCLA won’t end with that “one class”-the school has plans for future collaborations with the former Drexel trading boss.
Did Milken approach UCLA, or vice versa? Neither, says Scott.
“This was a spontaneous agreement in the course of discussion about lots of projects,” she said.
Chief among those projects is work on a database Milken has developed that “he claims no one else has,” Scott said. Milken and UCLA staff will produce research projects and papers together, she added.
Milken’s claim about the database is reminiscent of the swagger and one-upmanship he brought to business dealings that made him one of the most feared and admired names on Wall Street. It also shows, as a Tribune profile noted last month, that he is “steadfastly uncontrite.”
That raises red flags for some observers, including business school administrators, who look askance at Milken’s entry into the world of academia-after all, this isn’t a case of a chastened man trying to warn young people from following his felonious footsteps.
Ronald Patten, dean of the Kellstadt Graduate School of Business at De Paul University, says that, in the interests of academic freedom, he’d be willing to consider bringing in a guest speaker like Milken for one class of one business course to offer one alternative viewpoint-but that would be all. The unrepentant part, he said, among other issues, would give him pause about enlisting Milken’s expertise for a lengthy teaching assignment.
“If he were coming in as one of the guest speakers in a class and it was a case of, `Here’s a person who now says, “I see the errors of my ways” ‘-that would be a side to consider,” Patten said.
But a full course? Not a chance. “We can’t control what the man’s going to say,” Patten said. “The way I look at it, we’d be giving the man a platform.”
Milken’s moneymaking savvy alone wouldn’t qualify him for a University of Chicago assignment, said John Huizinga, deputy dean for the faculty.
“I think we’re looking for our faculty to be producers of ideas,” he said, “and we want our business school to be a place where ideas can be critically challenged and evaluated.”
A person’s skills in acquiring wealth is only part of the equation, Huizinga said. And if there were questions shadowing how that money was made, “we would certainly be hesitant to move forward if we thought someone was using his or her skills or information in an undesirable way.”
At Northwestern University’s Kellogg Graduate School of Management, rated by some as the top business school in the country, Dean Donald Jacobs put it more bluntly:
“He (Milken) never spoke here. Neither did (Ivan) Boesky. They weren’t invited. And that was before the convictions.”
And if Milken sent out feelers now, Jacobs said, even contriteness couldn’t help him.
“I was once approached by a person who had done some time in prison,” Jacobs said. “He had been convicted of a payoff or a price-fixing scheme. And he was contrite. I have to tell you he never taught here.
“I don’t know if I even like the `contrite’ part of it. I don’t think you need someone who’s been convicted of a crime to explain that you ought not to do something.”
David Messick, the Morris and Alice Kaplan professor of ethics and decision in management at Kellogg, said: “We could probably find someone at least as good who wouldn’t carry the kind of negative baggage he carries.”
The jury is out on Milken’s attempts to reupholster that baggage-and Milken himself has said that history will be a kinder judge of his actions in the greedy 1980s than the media. For better or worse, UCLA now must await that jury’s verdict as well.
