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Judgment Day is near. Five years after Conrad Black was publicly accused in New York of being a thief, a jury will be empanelled this week in Chicago to decide whether the former owner of The Daily Telegraph is guilty of fraud, racketeering, money laundering and obstruction of justice after looting $83m from Hollinger International, his former company.
The stakes are nuclear. If convicted, Black faces nearly 100 years’ imprisonment, financial ruin and humiliation. If acquitted, his vengeance will be merciless.
Writs have already been issued against dozens of former Hollinger directors including Henry Kissinger, and also against lawyers, accountants and other professionals. All are blamed for accusing Black of fraud and for liquidating the remnants of the world’s third largest newspaper empire.
This weekend, attended by Berner his faithful butler, Lord Black of Crossharbour is enjoying his last hours of comparative freedom at his vast house set on seven acres in Toronto. Greed for other sumptuous homes in London, New York and Palm Beach, two private jets, an army of personal butlers, cooks and cleaners, and glittering parties has fuelled his downfall.
Unaccused but also blamed for his plight is Barbara Amiel, his glamorous and intelligent wife. The opinionated journalist encouraged the excesses that her husband could not afford. Five years ago, surrounded in her London dressing rooms by a cascade of couture dresses, shoes, handbags and diamond jewels costing millions of pounds, the self-confessed glamour puss infamously confided: “I have an extravagance that knows no bounds.”
Her quip has haunted the couple ever since.
Ostensibly, the weight of evidence amassed by the prosecutors leaves 62-year-old Black undaunted. The prosecutors, he says, are seeking glory by waging a vindictive campaign of character assassination and asset seizure. Styling himself a “freedom fighter”, he has pledged: “The US marines would fail to keep me from facing my accusers in court. I am very optimistic. I know the facts.”
Since his arraignment in 2005, he has gradually rehabilitated himself in Canada, his birthplace. Rather than cower as an ostracised recluse, he has flaunted his notoriety. In a regular newspaper column and in appearances at parties, lectures and galas, Black has persuaded some Canadians that he is the victim of America’s corporate governance terrorists.
A group of Canadian admirers — including writers, academics and publishers — has fed his self-righteousness, skating over his condemnation of his birthplace as a land consumed by “spiteful envy” when he renounced Canadian nationality in 2001 to secure his peerage.
There has been a television drama-documentary portraying him as a heroic titan. And a Toronto website, supportlordblack. com, has been urging sympathisers to join the “on to Chicago caravan”. This turns out, however, to be a spoof. Banner-waving sycophants will not be cheering him in the Windy City after all.
Behind the scenes, Black is trying to regain Canadian citizenship; it would enable him to serve an American jail sentence in Canada’s softer prisons.
CHICAGO has changed since Al Capone was jailed for tax evasion in 1931. The new Chicago is a magnificent fest of art, music, food and architecture. Among the gems is Mies van der Rohe’s federal courthouse.
As Black faces his accusers there, his latest book, The Invincible Quest: The Life of Richard Milhous Nixon, will appear in the shops. It has been timed to coincide with his trial.
The jury, Black hopes, will be impressed by a scholarly defendant giving television interviews about an American president. He intends to show how, like Nixon, he relied on others to abide by the law and was unaware of their failure to comply.
This looks like yet another grandiose miscalculation. Chicago’s voters overwhelmingly support the Democrats, yet Black expects to earn their empathy by comparing himself to a disgraced Republican.
Recent visitors to the Blacks’ home remark that Amiel is not confident of his acquittal. Beyond her husband’s hearing, the 66-year-old reportedly predicts: “He’s going to prison.”
After sifting through about 3m documents, the prosecution claims to have amassed proof that Black financed his billionaire’s lifestyle at the expense of Hollinger International, the publicly owned company that he headed. In the prosecution’s words, Hollinger’s chairman turned the newspaper company into “the Bank of Conrad Black”.
One statistic is irrefutable. Between 1997 and 2003 Black and three directors took $391m out of Hollinger in income and expenses. This amounted to 73% of the company’s entire net income over that period.
According to the prosecution, at least $83m was diverted from Hollinger into Ravelston, Black’s private company, by concealing the full facts from Hollinger’s independent directors.
Lavish living, say Black and his supporters, is not a crime. True, says the prosecution, but the costs of his personal lifestyle were paid without the approval of the independent directors and shareholders. Those directors, including Kissinger, are among the 60 witnesses lining up to give evidence against their former benefactor.
Black is not a stranger to controversy, accusations and retribution. His early business career in Canada was chequered with allegations of duplicity and sharp practice. He was damned in 1982 in Cleveland, Ohio, for giving evidence about a takeover bid which, said a judge, was “strained and unpersuasive”.
More recently, an investigation conducted by Hollinger’s independent directors declared that Black was guilty of “corporate kleptoc-racy” because Hollinger had been “wilfully and deliberately looted by its controlling shareholders”.
Black’s indictment has been masterminded by Patrick Fitzgerald, the high-profile district attorney who has been buoyed by his perjury trial victory in Washington last week against Scooter Libby, Vice-President Dick Cheney’s former aide.
Like Black, Fitzgerald has become a legend in his own lifetime. Famed as a crusading workaholic in pursuit of criminals in New York and Washington, Fitzgerald writes on his personal website that he is “fighting for truth, justice and the American way”. Now, declares the website: “The long arm of the law . . . is targeted at Black.”
The former Telegraph proprietor wrote a bombastic article in Tatler last week saying he had been caricatured as “a greedy, flamboyant crook who stole money from his company to . . . feed the insatiable materialism of his harridan wife”. The prosecution’s purpose is to show that this is no caricature but the truth.
Fitzgerald salivates about presenting evidence that Black enjoyed a billionaire’s lifestyle at the shareholders’ expense. Among the juicy extravagances for the jury’s attention will be a holiday by the Blacks to Bora Bora in French Polynesia in 2001. Black charged the $530,000 cost of the corporate jet to Hollinger. En route, the couple stopped in Seattle to hear Wagner’s Ring Cycle. Black let shareholders pay $2,785 for their tickets.
The jury will be shown Black’s e-mails to two of his codefendants — Peter Atkinson, Hollinger’s lawyer, and Jack Boultbee, the finance director — refusing their request to repay his entire costs. Exploiting discord among Black’s cabal will be a crucial tactic by the prosecution.
Amiel’s personal extravagance is another feature of the prosecution’s case. Among the 11,000 e-mails between the Blacks in the prosecution’s possession — many of them embarrassingly sexual — are a clutch from Amiel asking her husband to charge her shopping expenses to Hollinger.
“Although relatively small in amounts,” says the indictment, listing Amiel’s handbags, jogging attire, exercise equipment, a leather briefcase and even stereo equipment for their New York flat, all charged to the shareholders, “[they] demonstrate Black’s intent and pattern of conduct when it came to International’s money.”
Black’s advocate is Edward “Fast Eddie” Greenspan, a Toronto lawyer known as a publicity seeker keen to defend alleged fraudsters. His friend Conrad, he insists, is innocent. There is “no smoking gun”.
During dozens of pretrial hearings, Greenspan has argued to Judge Amy St Eve, a good-looking former fraud prosecutor, that the evidence of the Blacks’ personal expenditure is “unpersuasive [and] unduly prejudicial because Mrs Black has sometimes been a lightning rod of controversy”.
The jury’s sympathy, Black fears, will be dented by references to his membership of the Lords, his four lavish homes, his servants and chauffeurs, and his wife’s spending habits. All, he has told the judge, are “legally irrelevant . . . inflammatory and prejudicial”.
“Injecting Mrs Black into the trial,” the defence argued, “would be unnecessary to any real issue in this case, and would result in a circus-like sideshow. Because the shopping expense evidence threatens the return of a verdict for the wrong reasons.”
Citing Matthew 19:24 (“It is easier for a camel . . .”), Black lamented that since biblical times, the wealthy have been envied and condemned.
In reply, the judge, a mother of three children, has been breezy but firm. Amiel’s lifestyle, she says, is intrinsic to the trial. The excesses, she has ruled, are all material to the alleged fraud.
To Black’s dismay, she has also admitted other evidence that he argues is prejudicial. The most damning concerns his allegedly fraudulent diversion of $83m from Hollinger International for the benefit of himself and his codefendants by way of so-called “noncompete fees”.
The alleged fraud started in 1998 to finance the Blacks’ dream of stardom. Six years into their marriage, the Blacks had transferred their aggressive social ambitions from London — already conquered — to New York. Their Alist lifestyle embraced Henry Kravis, the famed investor, and his wife Marie-Josée, Donald Trump, Mercedes Bass and Oscar and Annette de la Renta.
Unknown to Amiel, her husband concealed a serious problem: although he styled himself a multi-millionaire, he possessed comparatively little money and had accumulated substantial debts.
The illusion of wealth had been conjured by his describing Hollinger International, valued at more than $2 billion, as “my company”. In fact, Black owned only 15% of Hollinger.
The remainder was owned by public shareholders. Black maintained the mystique because, quite legally, he controlled 78% of the shareholders’ votes through a separate company.
Black glided over reality by appointing famous men and women as Hollinger’s independent directors. Besides Kissinger and Raymond Seitz, a former US ambassador to Britain, the army of the great and the good included Richard Perle, the former assistant secretary of defence, Paul Volker, the former chairman of the US federal bank, Marie-Josée Kravis, a director of Ford, and Jim Thompson, a former governor of Illinois who chaired Hollinger’s all-important audit committee.
Black also retained the services of Torys, Canada’s most prestigious law firm. To the subsequent dismay of Kravis, Thompson and Torys’ partners, Black claims to have obtained their consent to payments by Hollinger that, according to the prosecution, were fraudulent.
All those personalities accuse Black of deception and deny giving their consent, but all have been criticised for being supine suckers to Black’s charm and failing to prevent him “fleecing” Hollinger.
To settle a claim for negligence, Torys has already paid $30m in compensation to Hollinger. An insurance company has also paid $50m on behalf of the directors to settle a separate negligence claim. BLACK’S expected defence will be that he was not involved in the minutiae of decision-making. That defence does not explain his failure to question the deposit of millions of dollars in his bank accounts or his use of that money on a jet-set life-style.
The first act of the trial this week will be the empanelling of a jury. Chicago juries are famed as “Irish meat and potatoes folk”. Judge St Eve will pick Black’s peers after reading the prospective jurors’ replies to 114 questions about every aspect of their life, employment, social status, beliefs and prejudices about courts, crime, business, corporations, the rich, politics and the defendants themselves.
The prosecutors want educated people who are suspicious of corporations; the defence favours those sympathetic to businessmen and distrustful of the state.
The prosecution’s ace witness is David Radler. In a deal with Fitzgerald, Black’s former business partner has confessed that he acted fraudulently and claims that Black was aware of all the facts. In return for adequate testimony to convict Black, Radler will serve 29 months in a Canadian open prison and pay a $250,000 fine.
Radler’s problem will be to reconcile initial denials of wrongdoing with his later confession of guilt. “Radler is a liar,” Greenspan has said, promising to unmask him as the master criminal who deceived Black.
“I love to cross-examine,” Greenspan has said. “I don’t stop when I have someone on their knees — I won’t stop.”
The same can be said for Fitzgerald, however. Black’s desire to give evidence in Chicago contradicts Greenspan’s advice. “There is an appearance of pompous arrogance,” admits the lawyer. Fitzgerald can’t wait.
Black talks of crushing his critics, returning in glory to the House of Lords and getting his revenge.
“My libel suits, the largest in Canadian history at over $3 billion, which have been waiting like race-horses at the starting gates, will finally proceed,” he wrote last week.
And if he loses? His nightmare is handcuffs and disappearance into permanent darkness. In the Chicago courthouse, a holding cell has already been allocated; and an orange Guantanamo-style suit is waiting.
© Tom Bower 2007
Conrad and Lady Black by Tom Bower is published by HarperCollins
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Neither. Black is undoubtedly an exceptional individual in terms of his physical and intellectual assets. He got lucky in an exceptional context which enabled him to acquire a very large income and substantial assets introducing him to a luxurious environment in which he could lead an exceptional lifestyle. He must have gradually got to think he was invincible and to make the quite understandable mistake of confusing this good fortune with his personal ability and efforts. He should have realised that it had very little to do with the latter, and everything to do with luck. No doubt he did to some extent, but it would seem insufficiently, and failed to appreciate the real possibilities of the adage easy come, easy go. He might also have cared to reflect on his particular name. Presumably he did, but it remains to be seen whether he took sufficient precautions to cover himself against the powers that elevated him in the first instance.
Henry Percy, London, UK