Sunday, July 15, 2007

Business: Conrad Black’s Downfall Shaped by Many Battles

Conrad Black

News Analysis: Conrad Black’s Downfall Shaped by Many Battles

Conrad M. Black showed a capacity for mixing mischief and capitalism at an early age: at 14, he was expelled from a Toronto private school for stealing copies of coming exams and selling them to his fellow students.
The two engines of indignation and opportunism helped power Mr. Black’s rise to the heights of the media mogul life during the 1980s and 1990s. During that time, Mr. Black routinely sparred with regulators, denounced critics and sued journalists whom he claimed defamed him.
He also displayed his not inconsiderable charm — gathering the likes of Henry Kissinger and Margaret Thatcher to sit on his corporate boards — and wrote conservative thought pieces and scholarly biographies of great men whose lives he felt had been inaccurately depicted elsewhere, including Franklin D. Roosevelt, Richard M. Nixon and, well, himself.
His grandiose style, characterized by sweeping pronouncements and Latinate diction, served Mr. Black well while he was building a publicly traded company Hollinger International that, at one point, was the third-largest newspaper company in the world by circulation, owning The Daily Telegraph, The Jerusalem Post and The Chicago Sun-Times.
At his apex, Mr. Black and his wife, Barbara Amiel, shuttled in a company Gulfstream among grand homes in London; New York; and Palm Beach, Fla. Where high society was concerned, Mr. and Mrs. Black appeared to live in the mesosphere, the place above the stratosphere where the air is thin and meteors burn up.
Mr. Black had been pushing buttons and testing limits his whole career.
It is striking, then, that Mr. Black’s conviction in a criminal trial in Chicago yesterday came down to a mere $2.9 million he is accused of siphoning from the company he used to run directly — a far cry from the “corporate kleptocracy” that one former Securities and Exchange Commission chairman accused Mr. Black of running.
Mr. Black’s lawyers were quick to point out yesterday that he had actually been cleared of the “central charges” against him, all of them stemming from the sale of most of Hollinger International’s North American newspapers from 1998 to 2001, for proceeds of more than $2.5 billion.
In those deals, they contended that Mr. Black, his former partner F. David Radler and several other executives had improperly helped themselves to bonuses that were couched as agreements not to compete with buyers of Hollinger International’s newspapers. (Typical of Mr. Black’s byzantine approach to business, the storyline was even more complicated — for instance, in some cases private companies controlled by Mr. Black and Mr. Radler were buying some of the small papers from Hollinger International.)
But Mr. Radler, Mr. Black’s partner for more than 30 years, turned on his longtime ally, testifying at the trial in return for the promise of a light sentence.
The jury found Mr. Black guilty on one count of mail fraud relating to the sales of newspapers and two counts relating to a sham noncompete agreement that paid him and his colleagues $5.5 million for an apparent agreement not to compete with themselves. The most serious guilty count against Mr. Black, carrying a maximum sentence of 20 years, is the same one that sent Martha Stewart to jail: obstruction of justice.
In Mr. Black’s case, the jury watched security camera video showing Mr. Black taking boxes out the back door of his Toronto office on the Friday of a holiday weekend after apparently being told that was forbidden. Mr. Black’s lawyer, Edward Greenspan, suggested in a Canadian radio interview that his client remained as unbowed as ever by the verdict.
“He’s making plans for an appeal, and he’s making plans to vindicate himself,” Mr. Greenspan said.
This was not Mr. Black’s first tangle with the legal system. In the early 1980s, he signed a consent decree with the Securities and Exchange Commission in which he admitted no wrongdoing but promised not to violate securities laws in the future.
Several years ago, he sued the prime minister of Canada after Mr. Black’s nomination as a peer of the realm was blocked. Mr. Black lost the lawsuit and subsequently renounced his citizenship to become a Briton to accept the peerage, a decision that could haunt him now as it makes it unlikely that he could serve his sentence in a Canadian prison.
Insult to injury, Mr. Black — as a convicted felon — might face difficulty returning to Canada during his appeal. And yesterday the Conservative Party of Britain said that it would rescind its affiliation and no longer allow Mr. Black to sit on its side of the house. (He hasn’t been around much anyway.)
Another striking aspect of Mr. Black’s downfall is the degree to which his own bullheadedness has worked against him. Mr. Black, a military history buff who would compare his business strategies to great battles, made several aggressive moves after being removed from his company that resulted in more lawsuits and investigations into his affairs.
Perhaps he was taking a page from “Citizen Hearst,” a book about William Randolph Hearst that he read around the time of his expulsion from private school and piqued his interest in newspapers. In it, the book’s author, W. A. Swanberg, wrote: “No one could dispute his title as the champion loser of his time. The inspiring thing about him was his ability to see himself trounced in one fight and to come back swinging in the next.”
Even before Mr. Black got into legal hot water, Paul B. Healy, who was Mr. Black’s head of investor relations and a prosecution witness at the trial, said that his former boss might have moderated his behavior to appease complaining shareholders.
“This is not a happy day and I believe all of this could have been avoided if he had just dropped the arrogance,” Mr. Healy said.
One of Mr. Black’s lines of defense was to point out that the company he built was not bankrupted like an Enron or WorldCom or Adelphia, and that in fact he was prescient to begin selling newspapers before the industry hit the funk it is in now.
Indeed, despite many millions in legal fees Hollinger International has spent investigating and suing Mr. Black, investors whose complaints led to Mr. Black’s ouster have not had much to cheer about financially.
“If we had to do it all over again, we would,” said Gene Fox, managing director of Cardinal Capital Management, a shareholder who has been suing Mr. Black and other directors for their poor governance. “It’s a matter of principle.”
In addition to appealing for his freedom, Mr. Black will be now be fighting for what’s left of his legacy. In the eyes of Patrick Fitzgerald, the United States attorney who prosecuted him, it is a cautionary tale.
“He’s now a convicted felon,” he said, “convicted of very serious fraud charges and convicted of obstructing justice. And I’ll leave it at that.”

Copyright 2007 The New York Times Company

Dave Chidley/Canadian Press via Associated Press

Fall of an arrogant fraud: What really brought down the empire of Conrad Black?

Not that many years ago, Conrad Black seemed to have everything he ever wanted: a major right-wing newspaper, a beautiful wife, and homes on two continents. But it wasn't enough. He and Barbara Amiel were millionaires who wanted to live like billionaires. Christopher Silvester tells how Black's scorn for shareholders, regulators, and the law led to the humbling of a newspaper tycoon
Published: 15 July 2007
Conrad Black used to keep a picture of the Chicago gangster Al Capone on the silk-lined wall of Hollinger International's New York boardroom and would jokingly point him out to visitors as "our chief shareholder". Unlike Capone, who was convicted of tax evasion back in 1931, Black escaped a similar charge in Chicago on Friday. He was also cleared of eight other charges, including one of racketeering. Had there been a clean sweep of convictions, Black would have faced a prison sentence of almost 100 years. However, the former proprietor of the Telegraph Group was convicted on three charges of fraud and one charge of obstructing justice, enough for him to be facing a fine of $1m (£492,000) and a jail sentence of 35 years.
This was not how Black had envisaged the outcome of the case. "Stage one were the ululations of joy at the so-called downfall," he had said earlier. "Stage two is the big battle ... And then stage three is where I win." Convinced that he has a special relationship with God, Black has always believed in his invincibility. He was inspired by such military heroes as Alexander the Great, Napoleon and General MacArthur, as well as by tenacious politicians such as as Churchill, Franklin Roosevelt, Nixon and Maurice Duplessis, the dictatorial leader of mid-20th-century Quebec.
In 2006, Black vowed that "we will bring this entire gigantic, malicious prosecution down around the ears of its authors". Throughout the trial he maintained a demeanour of comic-opera bravado, dubbing the US government prosecutors "Nazis" and telling reporters that the prosecution case was "hanging like a toilet seat around their necks".
The government failed to win convictions on the so-called lifestyle charges, relating to Black's expenses claims for his wife Barbara Amiel's lavish 60th birthday party at New York's La Grenouille restaurant in 2000 and for a 2001 trip to Bora Bora, Polynesia, for the two of them.
At the heart of the prosecution case were several controversial "non-compete" agreements arising out of the sale of Hollinger-owned newspapers in America and Canada. These payments were made by the buyers of the newspapers so as to prevent Black and his colleagues from setting up new titles in competition with them. Such payments, totalling approximately $60m, should have been paid to Hollinger, the government argued, but were instead diverted to the defendants. In the most blatant instance, the American Publishing Company (APC), a Hollinger subsidiary, paid Black and David Radler (his long-time business partner) £2.75m, so that the two men were in the absurd position of paying themselves not to compete with themselves (in the event that they left Hollinger). Mark Steyn, a former employee of Black's and his chief journalistic champion, dismissed the APC payments as "a book-keeping wheeze dreamt up by David Radler that I'd wager Conrad wasn't even aware of until afterwards".
"If they are honest about it, the heart of their case was lost," said Edward Greenspan, Black's Canadian lawyer. "They lost on the big stuff." Bernard Harcourt, a professor of law at the University of Chicago Law School, strongly disagreed: "I think the verdict is a whopper. They got him on the four counts that mattered, the four that really make a difference." Jacob Frenkel, a former federal prosecutor and Securities and Exchange Commission enforcement lawyer, called it a "stunning victory" for the government and explained how a split verdict was in fact the best possible outcome for the prosecution since "it highlights for the appellate court that the jury was very thoughtful and thorough in its deliberations, separating the wheat from the chaff, identifying those counts in which the government met its burden of proof and those in which it failed to do so". Even Mr Steyn, Black's indefatigable supporter and – some would say – useful idiot, conceded: "The US Attorney's office might usefully adopt as its motto the IRA's message to Mrs Thatcher after the Brighton bombing – 'You have to be lucky every time. We only have to be lucky once.'"
According to their (very unofficial) biographer Tom Bower, Conrad Black and Barbara Amiel were millionaires who behaved as if they were billionaires, desperate to keep up with the Kravises, Manhattan's pre-eminent power couple, who definitely are billionaires. Ms Amiel envied the Kravises their two private jets and encouraged Black to acquire two corporate jets for Hollinger. Once, when her Concorde flight was delayed, she tried to reach Lord King, the British Airways chairman and a Hollinger director. Instead she had to pass on a message for him via a Telegraph journalist: "Tell Lord King that I'll never fly commercial again. I'm finished with British Airways, public transport and the lot of them."
It was Black's arrogant refusal to abide by a November 2003 agreement to pay back $7.2m in non-compete fees and admit that they were "not properly authorised on behalf of the company" and his underhand attempt to sell the Telegraph Group to the Barclay twins that proved his undoing. What followed was an investigation by the Securities and Exchange Commission, the Delaware court case in February 2004, at which Judge Leo Strine characterised Black as an "evasive and unreliable witness", and Hollinger's May 2004 $1.25bn lawsuit against the Blacks, culminating in the seizure of their principal assets and the indictment against him in the autumn of 2005.
The chief architect of the frauds was David Radler, Black's business partner since 1969, who decided to admit his part in the crime and become a government witness in September 2005, in return for a 29-month jail sentence to be served at a Canadian "country club" prison. As a witness, Radler was evasive and creepy, but the suggestion by Black's attorneys that he was a renegade partner who acted on his own in setting up the fraudulent scheme was belied by the evidence of Hollinger's directors, who said that Radler and Black were like peas in a pod. "David Radler didn't turn into a criminal overnight," argued Eric Sussman, the lead prosecution lawyer. "They're birds of a feather. Conrad Black and David Radler nested together for over 30 years."
Black's defence team ran the familiar argument of defence attorneys in mob trials when faced with the incriminating evidence of so-called "rats", mobsters turned government witnesses, and that is to damn them as liars. Because they have engaged in criminality themselves, the argument goes, how can anyone believe a word they say? This rarely works, as is shown by the vast number of organised crime bosses now in prison on the basis of such evidence. It is usually explained to jurors that the immunity or reduced sentences given to such witnesses can be revoked if they are shown to have perjured themselves.
For Black's defence to be believed, the jurors would have had to conclude not only that Radler was a liar, but also that the board directors of Hollinger who gave evidence for the prosecution, including a former US ambassador, a former governor of Illinois, and Marie-Josée Kravis, who has served on the boards of several public companies, were also inveterate liars.
Also, there was the inescapable logic of who benefited from the non-competes. "It's as simple as 'follow the money'," said Eric Sussman, quoting the words of Watergate's "Deep Throat" to the investigative journalist Bob Woodward. If David Radler was the sole criminal as opposed to a co-conspirator, why would he have sought to enrich his fellow defendants? Indeed, Black was the bigger beneficiary, the government pointed out in its summing up, having received $14.7m in disputed payments, compared with Radler's $8.8m. "David Radler is not Robin Hood," said Mr Sussman. "Why would he be stealing money to pay Conrad Black's mortgage?"
Yet the prosecutors were thought to have made some strategic blunders in their presentation of the case, relying too much on the uncorroborated testimony of Radler and overdoing their indignation about Black's flamboyant lifestyle, harping on about the trip to Bora Bora and Ms Amiel's 60th birthday celebration. Government witnesses described the latter as a private party masquerading as a business event, while a character witness for Black, John O'Sullivan, a Washington journalist, described it as a business event masquerading as a private party.
"The government's efforts to put Black's lifestyle on trial almost undermined the entire trial," said John Hueston, the prosecutor in the Enron case. "By acquitting Black of the counts accusing him of fraud in using company funds to pay for lavish parties and perks, the jury signalled rejection of the theory that Black was motivated by greed to commit crime."
The decision not to go into the witness box was always going to be a double-edged sword for Black. On the one hand, he avoided making a fool of himself. "Black has a famously bad temper, most recently revealed when he made an obscene gesture to journalists outside the courtroom," said John Hueston. "A competent cross-examination would likely have resulted in a fatal meltdown for Black, the alienation of the jury and a full slate of convictions."
But on the other hand, the jurors may have convicted him on the most serious charge, obstruction of justice, precisely because he did not testify. Caught on CCTV cameras he thought weren't working, he removed boxes from his office without permission. This charge, argued Mr Steyn in a Friday blog, "could only be explained and mitigated by understanding what was in his head ... The circumstantial evidence was too appealing to be overridden by anything but the testimony of the defendant himself". Without his testimony, the video footage of Black sneaking into his office and removing boxes of evidence could not be gainsaid.
Speaking on Sky News on Friday, Andrew Neil reckoned that Black would receive a sentence of no more than 10 years when he is sentenced on 30 November. Yet Mr Hueston, now a litigation partner with a Los Angeles law firm, believes that the outlook for Black is more worrying. "The jury result reflects a classic compromise verdict," he said, "but like many such attempted verdicts, the sentencing outcome for the defendants will be almost as grim as a full slate of convictions."
The Sentencing Reform Act of 1984 laid down new federal sentencing guidelines that require trial judges to undertake a cold mathematical computation and follow a pre-ordained grid when it comes to meting out jail terms. Black faces a maximum possible sentence of 35 years. The likely tariff will be about half that, somewhere around 15 years. Bernie Ebbers, the former CEO of WorldCom, who was sentenced to 25 years, and Jeff Skilling, the former CEO of Enron, who was sentenced to 24 years, can both expect to serve close to the full length of their sentences. The reason for that is that parole was abolished in the federal system.
Whatever his sentence, Black will have to do the time. Federal prisoners now have to serve about 85 per cent of their sentences. What's more, it will be hard time. He will most likely be sent to a federal prison far from a major city, making it difficult for friends to visit. Without the Hollinger corporate jet at her disposal, Ms Amiel will have to suffer the indignities of being an ordinary commercial airline passenger. At the same time, she and his children by his first marriage will see his assets swallowed by forfeiture claims.
Black may rue the day he renounced his Canadian citizenship to take his seat in the House of Lords. "He can reapply," says Canadian lawyer and legal commentator Lorne Honickman, "and my guess is he will reapply immediately. If he was a Canadian citizen, as is David Radler, we have an agreement with the United States, a prisoner exchange programme where you can make the application to serve your sentence in Canada."
Otherwise, Black's best hope is that President Bush might give him a presidential pardon. It would make a mockery of the federal justice system, of course – but then so did Mr Bush's recent pardon of the convicted perjurer Lewis Libby.
For the sake of a mere $7.5m and his gargantuan pride, Conrad Black lost control of a multi-million-dollar media empire and faces financial ruin as well as a lengthy spell inside. Now he will have time to reflect on a remark by General Dwight D Eisenhower which he quoted during the British newspaper price war of the early 1990s: "The cost of victory may be high, but the price of defeat is everything."

In his own words

Pride and prejudice: the thoughts of Conrad Black

'I have no doubt that mothers in America use my name to frighten their children into finishing their vegetables'

'I said [to Margaret Thatcher]: 'The revolution you have wrought on this country is more important by far than the episodes in British history that usually enjoy that description.' She patted me indulgently on the forearm and said, 'That's very good. Do come back, won't you?'

'Bullies are intolerant of contrary opinion, domineering and rather cowardly. I hope none of those terms could be used to describe me'

'It's war. I'm on an inexorable march to victory ... I see the trend. My strategy is working. (Outside the Chicago courtroom) '

'The malaise of our free press [is] the irresponsible power of journalists, unrestrained by publishers'

'I have always had the twin ambitions to have at least one hundred million and to get away from Canadian winters'

The young Black

Born 1944, son of a brewery magnate. Buys his first paper in 1966 and, with business partner David Radler, his second in 1969. By mid-1970s has a chain of small newspapers ts/keystone usa/rex features

The rising tycoon

Adds more papers. In 1985, buys 'The Daily Telegraph' and takes over 'Melbourne Age' and 'Sydney Morning Herald'. Divorces in 1991, marries Barbara Amiel; they become famous for spendthrift ways tim graham

The years of plenty

By the end of the 1990s he has a stake in more than 500 newspapers. He decides to renounce Canadian citizenship when he is offered a peerage by the British government universal pictorial press


In 2003 comes the beginning of a welter of lawsuits and investigations that culminate in a Chicago trial. The jury is swayed towards conviction by CCTV footage of him removing documents from his offices

Conrad Black helped build Hollinger International, once the third-largest newspaper company in the world by circulation.

Black: the hunt for the cash
US investigators in race to find hidden wealth
By Stephen Foley in Chicago
Published: 15 July 2007

Lord Black of Crossharbour, the disgraced media baron and former owner of The Daily Telegraph, faces a court-ordered probe into his opaque finances. The prosecutors who secured his conviction for fraud allege that he has squirrelled away millions of dollars in cash, property and other assets.
The battle to discover what Black is really worth has taken a nasty turn since he was found guilty on Friday on three counts of fraud and one of obstructing justice, with the prosecution saying that Black cannot be trusted and should be sent to prison immediately.
He remains free on bail in the Chicago area this weekend, as questions swirl about how he has been able to maintain a comfortable lifestyle despite court controls being imposed on his finances north and south of the US-Canadian border. The US government alleges that he has already broken the terms of his bail bond, lied about his assets and is funnelling millions of dollars through his wife, the conservative columnist Barbara Amiel.
Black faces up to 20 years behind bars in the US, millions of dollars in fines and the possible forfeiture of assets including his $35m (£17m) mansion in Florida, but the balance of jail time and financial penalties will be decided only after an investigation by court officials into the extent of his assets.
The judge, Amy St Eve, pushed back Black's sentencing until 30 November, giving the court a longer than usual amount of time to carry out its investigations, which are likely to prove tortuous. Prosecuting attorney Eric Sussman said in court on Friday that he was aware of "a large amount of money moving back and forth ... literally millions of dollars".
The court has the power of subpoena if it feels that information is being held back, but hovering over the process is the threat that Judge St Eve could take obstructive behaviour into account when sentencing Black. "Usually it is in a defendant's best interest to co-operate," one courthouse source said wryly.
The judge has already shown her frustration with Black over the issue of his bail bond, which was originally set at an unprecedentedly high level of $20m.
The judge will rule this Thursday whether Black's bail will be revoked, although she appeared to be ready to return his passport and free him to travel back to his home in Toronto, if his Canadian lawyers are able to give watertight assurances that he will return to Chicago for sentencing.
George Tombs, a Quebec-based biographer of Black, said that the Blacks' finances have always been opaque and that tracking down all their assets will be a tough job for court officials. "It is a very hard task, so hard it would take a forensic accountant," said Mr Tombs. "One thing to consider is that he has more than real estate. He has art works and antiques and other property. As an international business tycoon he had interests on several continents."
The peer's desire for an entrée into the billionaire business set has often led him to act as if he is wealthier than he really is. At the peak of his powers between the end of the 1980s and the start of this decade, he may have been worth several hundred millions of dollars. Now, faced with having to pay back millions of dollars in legal fees and pay fines that could run into millions more, he could well slip towards personal bankruptcy – particularly if other civil lawsuits go against him.
The Blacks still have use of their beachfront mansion in Palm Beach but it is heavily mortgaged. The government had ordered Black to pay off the mortgage. He has not done so, saying he is in dispute with the mortgage company, and the government says it does not know if Black is refusing to pay or simply cannot.
In Toronto, the couple live in the family home, a Georgian mansion where Black has installed an 18th-century throne and a three-storey library. Their homes in London and New York have been sold.


Sarah Sands: Magnificent, but preposterous Conrad Black: the end of an era

Nobody believed that Conrad Black would get off but, looking at his enemies, some had a slight hope that he might. The former deputy editor of one of his papers says he's not the monster he's painted
Published: 15 July 2007
'Don't be too hard on Bob," Conrad Black said to his editor on The Daily Telegraph, Max Hastings, on hearing the news that Robert Maxwell had drowned. "I know he was a crook, but he was a not uninteresting character as well. He had his moments."
I watched the news footage of Black entering the Chicago court for the final verdict with the same mixed feelings. He looked physically diminished, although he tried to emulate the nonchalant manner of a free man. His daughter Alana, who became a Cordelia-like figure during the trial, was near by to catch him if he staggered with shock. His wife, Barbara Amiel, accused by her detractors of being the agent of his fall, never left his side.
In the end, nobody really believed that Black would get off. But looking at those arraigned against him, some of us sort of hoped.
Black was magnificent and preposterous and self-deceiving. I have met David Radler, the business partner who took a deal to give evidence against him, and he made my blood run cold. He was vicious and venal. I have also met many of those politicians and captains of industry and society figures who flattered Lord Black and drank his champagne and are now competitively indignant about where the money came from. It is pure Trollope.
Conrad Black feigned indifference to the fripperies of society. But a business colleague of his told me at the height of the political dealing that secured Lord Black of Crossharbour his title: "Conrad would crawl on his hands and knees over broken glass all the way from Canary Wharf to Westminster to get a peerage."
He had a fat boy's face and it would light up with sly pleasure when he name-dropped or mentioned an invitation to the top table. I remember frantic negotiations behind the editor's door to get the Blacks in to state functions. Similarly, he was serenely happy to reel off, in his dry Canadian drawl, the attendance list at meetings of Hollinger's international board, the group of people invited to dignify the honorary board of The Telegraph's parent company: President Giscard d'Estaing, Richard Perle, William Buckley, Lord Weidenfeld and – most beloved – Henry Kissinger.
Then there were speakers chauffeured in: Rudy Giuliani, or Donald Rumsfeld. I recall a meeting of that honorary board, where Lord Black moved his lips to echo Rumsfeld's witticisms. This was in the days before Iraq, when the then defence secretary was a dapper, sought-after figure. Black's eyes shone with pride as the American – a man praised by Black for having "made a considerable fortune" in his own right – talked. Suddenly Rumsfeld stopped in mid-flow and reeled round. What was that tape-recorder on the table? Was someone taping him? Who was the sonofabitch?"
I remember Black's stricken, sweaty face. He looked at the smattering of Telegraph journalists as if he might kill either them or himself. Then Rumsfeld's taut boxer's shoulders relaxed. "Hey, it's just the secret service." And Black's small eyes creased up with pleasure and relief.
Where are those presidents and lords now? Where is Henry Kissinger when you need him? Who will speak up for an old friend? When Black was a boy, he stole exam papers and shared them out with fellow students. He was caught and expelled. As he left, he was jeered by the boys who had bought the papers from him. He said later: "I've never forgotten how cowardly and ungrateful people can be."
I don't know if Conrad Black needs financial help to launch his appeal, but the friends he purchased in Britain have mostly been unavailable to take his calls. In the end, it is the journalists whom he insulted but also indulged who have the greatest fondness for him. If he was a bank robber, none of us have ever really worked out whose money was stolen. We know who ultimately benefited from his crime and they are mostly lawyers.
Looking back, it is hard to recall when we had the first intimations that Nemesis was approaching. Black's financial dealings had always been a mystery to most of the Telegraph staff. Journalists, being perpetual adolescents, complain but secretly enjoy the firm hand of a proprietor. Men who own newspapers are meant to be wealthy, domineering and demanding. Black had his own plane. He arrived at the office in a Rolls-Royce. He rang the editor at any hour when there was something in the paper of which he did not approve. He looked and sounded and behaved like a proprietor, not least in reserving the right to keep New York hours in London, which meant that he invariably wandered late into meetings.
I suppose it was mildly disconcerting to remind ourselves that our newspaper was actually the property of a quoted American company called Hollinger International that was in effect controlled by a Canadian company called Hollinger Inc. Our job at the Telegraph was to make money and send it back to Hollinger International in New York. What Hollinger International did with it was nothing to do with us. Technically, Black was proprietor by virtue of controlling shares with special voting rights. But while he had control through those shares, we began to understand that he had an army of institutional investors in Hollinger International to keep happy – and they were the ones who turned on him.
Little by little, a mood around the office that said capitalist empires were always financially complex hardened into a suspicion that all might not be well at the empire's heart. Black dismissed the stories that began to surface in other papers. We were loyal and lazy enough to believe him. In any squabble between him and Richard Desmond, we had to back our man. But it was a bit odd for him to arrange refinancing only months after the company had boasted about the brilliant deal it had done in selling a load of papers to the Canadian company CanWest.
This, in time, was the deal that came back to bite Black. It dawned on us that Hollinger companies were not awash with the funds we had thought they were. We asked our colleagues in the City office what it all meant. They seemed no clearer than we were. One day a group of executives was sent into the boardroom to impress a team sent over by Nelson Peltz, the billionaire owner of Arby's fast-food chain. The rumour was that he was considering a stake in some part of the Telegraph or Hollinger empire. We made snobbish jokes about working for the man who had made a fortune from Arby's signature dish, roast beef sandwich. Later, the laughter dried up.
Meanwhile, the discontent grew among the fund managers who had taken shares in Hollinger. It was getting sticky. A City friend mentioned to me that Black's private plane was to be grounded. I realised that there were degrees of great wealth and, strange as it sounded, Conrad and Barbara were living beyond their means. He might have got away with it if he had done more to ingratiate himself with the fund managers. But when they suggested the investment and pension funds they ran deserved a better deal, they were told they should count themselves lucky to be investors at all.
Commentary about Black's downfall has centred on his "character". He was not the monster created by his biographer Tom Bower, but he could be rude and dismissive of those he thought dull or stupid. Many of us found his mad rhetoric too comic to be offensive, but some were just plain offended. It was not immorality that did for Black so much as his careless slights to others, which burned within them into grievances.
His critics say that Black's crime is the worse because it was committed from a position of privilege. A burglary we understand. His is a crime that we frankly do not – and one that many legal observers assert is not a crime at all. If you look at what he was up to, it is not so very different from "wealth creation" of the entirely legal kind.
A former Telegraph journalist asked Black at a lunch why his business had to be so complicated. "It is how you make money," explained Black with paternal patience. I can't help feeling that he is closer to the sin of avarice than the sin of theft. But we must accept that an American jury has decided differently.
Was he good for journalism? For a man who professed to hate journalists, he was remarkably interested in it. He took a stake in the Telegraph titles when they were close to closure, invited in by a Hartwell family who had almost been broken by the print unions. The chance to pose as white knight was set up for him by Andrew Knight – another of the great and good of Britain – and he was quickly able to seize the whole prize. Not everyone believes he was the company's saviour: my old friend Perry Worsthorne, installed and dismissed as editor of The Sunday Telegraph by Black, believes he destroyed the titles with his neo-con interests. Yet he also built them up, employing many more journalists and printing new sections.
He had, too, an instinct which is now lost in so much of the industry – that there should be a certain glory, an argumentativeness, an intelligence to newspapers. He was, to his credit, a man with a hinterland, a proprietor who took an interest in ideas, a historian whose books have attracted good reviews even from those who did not work for him. And if we used to complain that the editorial budget faced cuts in order to feed Black's Hollinger debts, we did not truly appreciate the meaning of cuts until the regime that followed him.
Yes, both he and his wife could be grand and imperious, but some of it at least was for show. I remember being in charge of The Daily Telegraph when I got a message from Black, through the editor's secretary, that he would like a leader to be written praising a particular government policy. I sent a message back saying that since the editor, Charles Moore, was away, and since I happened to know he was vehemently against the policy, I would rather wait for his return before addressing the subject.
Black then phoned me, wondering sarcastically if I would deign to speak to my chairman, whose views I had discarded so lightly. Intimidated but cross, I told him again that I would not undermine the editor. An hour later, I received a long, kindly fax from Black saying that he understood my position and that the matter was closed. A lot of Black's bullying was bluster.
I cannot imagine such a chaotic encounter with Rupert Murdoch. And I was genuinely scared of the Barclays, the men who now run the Telegraph group.
Conrad Black lost control of his empire three years ago. But the regime really ended with the guilty verdict on Friday. So that is that, the end, as Tony Blair puts it. A former Telegraph leader writer, known for his uncanny impersonations of Black, phoned me up, for the first time in his own voice rather than Black's.
I glanced up at a photograph I have on the wall of the leaving party for Charles Moore, former editor of the The Daily Telegraph. The leader writer and I staged a double-act sketch: he as Conrad, in full Napoleonic dress, I as Barbara in a gold dress and a tiara. The following day I had a message from Barbara that she wanted us to perform it again for her.
Like many right-wing romantics, Black was a hero-worshipper. He was interested in gigantic, fallen men. There is a symmetry that he was sentenced in the week that his biography of Richard Nixon was favourably reviewed. I imagine that his prison role model will be Nixon's other biographer, Jonathan Aitken, although I do not think that Black will embrace Christian humility as the path to redemption in quite the same way. First, he would have to admit his guilt, which is not something Conrad Black is inclined to do.


Conrad Black And His Wife, Barbara Amiel, Dressed In 18th Century Style Costumes for ball given By Prince And Princess Michael Of Kent At Kensington Palace, London. Picture: Getty Images

From lord to lag in four easy steps

IF ANY image of Conrad Black is to outlive his new infamy it surely will be the one of him taken as he arrived at a fancy-dress party dressed as Cardinal Richelieu. His glamorous wife, Barbara Amiel, on his arm as Marie Antoinette, nothing captured the newspaper mogul's keen sense of his own importance better than this 2000 snap of Black decked out in the red robes of France's 17th-century L'Eminence Rouge.
As Black, a historian and converted Catholic, would have known, the cardinal's achievements have been acknowledged as consolidating royal power - that of King Louis XIII - and crushing domestic factions, although some of his methods did not stand up to ethical scrutiny. Much the same could be said of Black, who devoted a great deal of his time as head of a multinational media conglomerate to accomplish the same goals.
When Richelieu died in 1642, with his reputation as a clergyman and great statesman intact, Pope Urban said: "If God exists, Cardinal Richelieu will have to answer for many things. If not... then, yes, he will have done well in life."
There, the similarities end. Last week, 62-year-old Black - also known as Lord Black of Crossharbour, a Conservative peer - was found guilty of three charges of fraud and one of obstructing justice, and is now facing up to 35 years in jail. Justice arrived in his lifetime at the hands of an American jury; divine retribution will have to wait.
Black, the son of a wealthy Canadian businessman, told anyone who would listen during his 14-week trial in Chicago that he was on "an inexorable march to victory... my strategy is working".
Yesterday, he woke up in his suite at the city's plush Ritz-Carlton hotel to the knowledge that his strategy had failed. That he was not already behind bars is down to Judge Amy St Eve's acceptance that there would be no profit in the disgraced tycoon going on the run. Instead he was stripped of his British passport and ordered to stay in the Chicago area until a fresh bail hearing on Thursday. Given his circumstances, it is likely that Black will remain out of jail until November 30, the date scheduled for formal sentencing.
His Canadian defence counsel, Edward Greenspan, who immediately announced Black's intention to appeal following the guilty verdicts, insisted his client would be there. "His life - his past, his present and his future - are all wrapped up in this case," he explained.
Black's transition from Lord - he was only ennobled in 2001 - to lag has been remarkably swift. At the time of the elevation of the political right-winger to the House of Lords he was head of the successful Hollinger media empire embracing three continents and prestigious titles such as the Telegraph group in London, the Jerusalem Post and the Chicago Sun-Times. He had amassed a personal fortune of around £136m during his business career and shuttled between luxury homes in Florida, New York and Kensington by private jet. Wealth, power and influence were already in his back pocket and he could count among his friends such international luminaries as Dame Margaret Thatcher and Henry Kissinger.
But it was all thrown away in four easy steps. Originally, Black and three senior business colleagues were charged in 2005 with looting Hollinger International of more than $80m. By the time the trial started in March, this had been whittled down to $60m. In the end, Black and his colleagues were found guilty of three counts of taking illegal payments from the company in schemes adding up to $6.1m - a relatively small sum in the high-flying corporate world they once inhabited.
Then, the three frauds were compounded by Black himself. His obstruction of justice conviction relates to him removing boxes of potential evidence from his Toronto office ahead of the trial, a sight caught on the office's security cameras and shown to jurors.
On a personal level, those who had a close view of Black's style say he combined total self-belief with great personal charm. Bill Jamieson, a former economics editor on the Sunday Telegraph, said: "There was always an air of thunderous menace about him. He could be a bit of a blusterer, but there was this huge aura of power whether meeting him informally or in the boardroom. Women loved this about him. I have seen very mature female journalists totally knocked out by this as he could also be very charming if he wanted to be."
Black loved nothing more, Jamieson said, than showing off his collection of powerful friends. "I remember one meeting of his advisory board at which senior British businessmen and politicians of the stature of Lady Thatcher were present. The only one not there was Kissinger, who gave his apologies because he had to address the United Nations. It was of that scale. But that was Black's meat and drink. In that kind of company he lit up like a lightbulb."
To run with such wealthy and influential companions, however, Black and Amiel, the newspaper executive and columnist he married in 1992 after his first wife ran off with a priest, had to finance a lifestyle to match. As Kim Fletcher, a former editorial director of the Telegraph titles under Black, recalls: "The sadness for his supporters is that it need never have happened. The companies were doing well. Everyone at the top was making money. Sadly, though, he was very rich, [but] he was not rich on the scale of his friends. It must annoy the rich a lot to discover that there is a wealth beyond their own. Black, it is said, began to play beyond his means, a rich man who ran with the super-rich and needed to find the funds to do it."
Black's crimes began in 1998 with a phone call to his lifelong business partner, David Radler. At the time, Hollinger was selling off local newspapers in North America and Black suggested hiving off a relatively tiny portion of the proceeds. As prosecutor Jeffrey Cramer put it, the pair were cautious in what they took. "They'd just take a little piece - the tiniest piece," he said. But some of those deals were worth many billions.
The trial heard that Black apparently believed he could do as he pleased, describing himself in internal memos as the "proprietor" of Hollinger even though, in reality, he only owned 14% of the shares. The rest was in the hands of investors who eventually spotted that they were being robbed. In 2002, unhappy shareholders began questioning payments made to Black, other executives and holding companies he controlled. In 2003, he stood down as chief executive of Hollinger International, asserting he was the victim of corporate governance "terrorists" out to steal his company.
But, as the jury heard, Black was routinely milking the business with lavish perks. He charged the company $42,000 for a party for his wife, insisting it was a "business event". He and his wife took a $570,000 Polynesian holiday aboard the corporate jet, claiming travelling on a commercial aircraft was a terrorist risk. He got Hollinger to reimburse him for furnishing his New York apartment - including the purchase of a $12,500 vanity stand complete with a shaving bottle used by Napoleon.
Although his lawyers insisted all his actions were commonplace among senior corporate executives, his own words, reproduced in court, undermined him. In a 2002 e-mail to colleagues, he acknowledged that his behaviour was not typical. "We have a certain style that all these shareholders were aware of when they came in," he wrote. "We should fine tune that style, not revolutionise it with Damascene conversion to vows of poverty."
He added, in a phrase that has come to back haunt him: "The goose keeps laying a golden egg every year and the best, by far, is yet to come."
His assertions that Hollinger's panel of independent shareholders approved the schemes that were later found to be fraudulent collapsed in court when they denied they knew where the money was going. The coup de grâce was administered by Radler, his long-time friend. He took the stand as a prosecution witness and admitted his own complicity, but fingered Black as the fraud's mastermind.
In the time-honoured traditions of American justice, Black could have plea-bargained with prosecutors in the hope of getting off lightly. Instead he gambled on a high-risk, all-or-nothing strategy. Partially, it succeeded. He was cleared of nine other counts, but the guilty verdicts on the remaining four counts still leave him facing a lengthy jail sentence. Prosecutors are pressing for 15 to 20 years, although some lawyers are suggesting a much more lenient sentence. Andrew Stoltmann, who specialises in white-collar crimes, predicted five to seven years. As Black has to serve a minimum of 85% before parole, it could be less. In any case, lawyers predict, Black will do his time in a minimum security federal jail.
Meanwhile, Greenspan argues that there are "viable legal issues" for Black's appeal against the convictions. Stoltmann disagrees: "I think Conrad Black has virtually no grounds for appeal. The judge bent over backwards to give him a fair trial."
With his business career effectively over, Canadian supporters hope jail time will give free rein to Black's other talents.
Hal Jackman, Ontario's former lieutenant-governor and a longtime business associate, said: "I don't think he's the best CEO in the world, or the best president or chairman of a company, so he should do what he is good at. I think he has established himself as a great scholar - very quick writer, very retentive mind - and that's his future."
Jeffrey Archer, the former peer who served a jail sentence for perjury and still makes a handsome living as an author, should look out. He may soon have fresh competition.
Beauty whose extravagance knows no bounds
Of equal interest to media watchers in Britain is the future of Black's wife, Barbara Amiel. Many journalists are convinced she played a big role in her husband of 15 years' fall from grace, her expensive lifestyle the catalyst that drove him to commit fraud on a massive scale.
She is believed to have annoyed shareholders at Hollinger International - who ultimately forced Black out of the company - with her comment to fashion magazine Vogue that her "extravagance knows no bounds."
She is known as a true Canadian "beauty," petite and thin, always elegantly dressed and with a virtually unlined face. Few guess she is 66 and, in Black, on her fourth husband.
She has always been more than the wife of a media mogul. She was Black's business partner, a director of Hollinger International, an editorial consultant to the Chicago Sun-Times and a columnist for the Daily Telegraph.
She rose to prominence as an outspoken right-wing columnist and became the first female editor of the Toronto Sun in 1983. She resigned after a year and moved to London with her third husband, David Graham, a cable TV entrepreneur.
Her third marriage lasted four years and, on marrying Black in 1992, she moved her column from Rupert Murdoch's Times group to the Telegraph.
In the courtroom over the last 14 weeks, observers say she has proved an asset to her husband. She has also amused readers of Maclean's, a Canadian magazine run by a friend, with a weblog.
"Chicago routine is straightforward: get up at 6.45am, leave for court at 8.25am, pat-down by pleasant court security man 8.50am, listen to nasty things said about us till 5pm, with a lunch break for one banana and a carton of skim milk," was one recent entry.
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