---
category: Private Organization
end: 1990
location: New York City
start: 1935
summary: Drexel Burnham was the investment bank where Michael Milken built his junk-bond
  empire, and whose financial infrastructure was used by the Iran-Israel Joint Committee
  slush fund to finance covert activities.
tags:
- Organization
- Private
- Finance
- USA
---

[Drexel Burnham](/organizations/drexel-burnham/) was a prominent brokerage house where [Michael Milken](/people/michael-milken/) built his junk-bond fortune. It was involved in the financial operations of the [Iran-Israel Joint Committee](/organizations/iran-israel-joint-committee/)'s slush fund, which was used to finance various covert activities and political initiatives.

Large amounts of money from the arms sales to [Iran](/places/iran/), along with profits from earlier deals, were held at various interest rates by Drexel on behalf of [Israeli](/places/israel/) front companies after being funneled through [American](/places/united-states/) banks. These large deposits contributed to Drexel's stature and helped underwrite huge quantities of junk bonds.[^1]

In 1987, the [Iran-Israel Joint Committee](/organizations/iran-israel-joint-committee/) decided to withdraw its funds from Drexel and from the control of [Menachem Schneerson](/people/menachem-schneerson/) (Lubavitcher Rebbe). This decision was influenced by concerns that the funds might be frozen if relations between [Israel](/places/israel/) and the [U.S.](/places/united-states/) deteriorated, and it contributed to [Milken's](/people/michael-milken/) growing troubles and ultimately to the fall of Drexel.[^1]

[^1]: Ben-Menashe, Ari. *Profits of War: Inside the Secret U.S.-Israeli Arms Network*. TrineDay, 1992.