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Lord Black: Unabashed, unbowed
Defendants facing criminal charges usually shun the limelight.
Not Conrad Black. The former owner of the Chicago Sun-Times has a date with federal prosecutors in Chicago in less than two weeks. But it will take more to silence this outspoken British lord than his impending trial on charges that he diverted millions from his newspaper company, Hollinger International.
Black is hardly a household name in Chicago, but his trial is the talk of his native Canada. Everyone from professors to clerks to newspaper columnists is buzzing about the case and whether the U.S. government is unfairly making an example of him.
Black is making the most of his celebrity.
On a sunny but frigid February day, Black holds forth about media bias to a class of University of Toronto journalism students. The next day, the 62-year-old shares memories of his privileged childhood in post-World War II Canada and plugs his coming biography of Richard Nixon during an interview on a local public television channel.
Zipping around this city of 2.5 million in a chauffeured limousine, Black says he is being so visible because there is "zero" chance he has done anything illegal.
"I want to send everybody a message: This horrible persecution hasn't turned me into a recluse," Black says proudly, leaning back in the backseat of his 1995 Cadillac, which he keeps because of its roomy interior. "After a while, people respect someone who holds his corner."
Eddie Greenspan, Canada's pre-eminent criminal attorney and the man who will orchestrate Black's defense, is similarly confident about the trial's outcome even though he has his work cut out for him. Black's business partner for nearly 40 years and the former publisher of the Chicago Sun-Times, David Radler, has pleaded guilty and is testifying for the prosecution in exchange for a reduced sentence.
"We will show Conrad Black did not commit a crime," Greenspan says, sitting in his offices appointed with marble floors, Oriental carpets and an antique plank desk in a former bank building in downtown Toronto. "David Radler, in my estimation, is central to the case, which I expect the prosecution to argue he is not. I believe there are many issues to take up with Mr. Radler about the truthfulness of his proposed testimony."
U.S. prosecutors are equally secure that they have Black where they want him. "Black did not make a distinction between his money and that belonging to a public company," they wrote in January. That mind-set, they argue, resulted in the "fleecing" of Hollinger International, the company that owns the Chicago Sun-Times, the Gary Post-Tribune, the Daily Southtown and a host of local suburban newspapers. It has since changed its name to the Sun-Times Media Group Inc.
Lots of Canadians can't wait for the battle to unfold. Many of them have detested Black since he gave up his Canadian citizenship in 2001 to accept a British title. The fact that Black could go to prison in the U.S. for 10 years or more and lose what's left of his fortune only makes the story juicier. Prosecutors have a freeze on most of his assets, including an injunction barring him or his wife, Barbara Amiel Black, from selling a $2.6 million diamond ring and a $600,000 brooch.
"There's been a great deal of dwelling on all the charges and sensational headlines and quite a bit of schadenfreude, people taking exquisite pleasure in his difficulties," said Adrian Stein, a writer who publishes a literary journal in Toronto.
The trial starts March 14 and could last three to four months. The proceedings are expected to draw media attention from around the world. Maclean's, Canada's leading weekly newsmagazine, is publishing a special issue focused on Black and events leading up to the trial.
Amassing a media empire
During the mid- to late 1980s, Black took control of the storied Daily Telegraph in London and acquired the Jerusalem Post. A decade later, he launched the National Post as a conservative alternative to what he saw as liberal slant in the Canadian press.
He also bought the Chicago Sun-Times in 1994, combined it with some of his other papers and launched a U.S. public company, Hollinger International. It is that company prosecutors allege Black and other top executives looted by funneling more than $80 million in "non-competition" payments to themselves as they unwound the heavily indebted media empire by selling off hundreds of newspapers in Canada and the U.S. from 2000 to 2004.
Among other counts, Black is accused of using company money to pay for two-thirds of a lavish birthday party for his wife, using the corporate jet for a personal vacation to the South Pacific, and buying a Hollinger apartment in New York for millions below its market price. In e-mails, Black calls the charges "nonsense" and reiterates his belief he will be completely vindicated, "but only after $200 million will have been wasted on this vendetta and I have, under quaint American corporate governance practices, been obliged to pay to persecute myself."
Black's controlling position in Hollinger is held through public and private companies in Canada. One of his holding companies, Ravelston Corp., has been forced into bankruptcy and is now in the hands of a Canadian "receiver," the equivalent of a U.S. bankruptcy trustee. Ravelston has agreed to plead guilty to a charge that it improperly received a non-compete payment related to a sale of newspapers in 2000.
Warm welcome in some circles
The fact that Black is out and about, holding his head up, is winning him some grudging respect.
At the recent annual cardinals' dinner in Toronto, which raises money for Catholic charities, Black occupied a prominent place at the head table as a past chairman of the event. When he was introduced, Black received a spontaneous ovation from the 2,300 attendees.
"I can tell you he was given a warm welcome and a very cordial welcome by the crowd," said Tom McCarthy, a Toronto commercial real estate executive and vice chairman of this year's dinner. "There was no negative response whatsoever."
Black also has garnered supporters in cyberspace. A recent post by "john(underscore)d" on a Canadian magazine blog asks if readers are "sick of how the United States is persecuting one of our best and brightest with a frivolous legal action inspired by little more than the inferiority complex of the common masses?" Then it urges them to "Stand up for Conrad Black."
A public relations blogger in the U.S. declares "Conrad Black is my new anti-hero and favorite writer."
Two months ago, Stein wrote a 25,000-word essay subtitled, "Conrad Black, Corporate Governance and the End of Economic Man." The essay, published in "Books In Canada," defends Black and attacks Richard Breeden, the former head of the U.S. Securities and Exchange Commission, who was brought in by Hollinger's board to investigate the non-compete payments.
It also paints Black as the fall guy for ambitious members of Hollinger's board of directors, such as Richard Perle, former assistant secretary of defense, and Richard Burt, former ambassador to Germany and State Department official. Stein argues Perle and Burt were afraid of losing lucrative military contracts if Hollinger's board was found wanting in oversight.
The star-studded board also included former Illinois Gov. James Thompson, who was head of the audit committee and is expected to take the stand during the trial.
Not surprisingly, prosecutors aren't buying the Black-as-victim scenario. Although they are not discussing the case this close to trial, U.S. Atty. Patrick Fitzgerald said in November that "the insiders at Hollinger--all the way to the top of the corporate ladder ... made it their job to steal and conceal."
Yet there's no question that Black's legal and financial troubles have cost him many of the upper-crust friends he cultivated in places like London, Palm Beach and New York.
"There are always people who run for the door," said Michael Levine, the Toronto super-agent who represents Black's Nixon book. "A lot of fancy people did that."
`Pompous' but `small potatoes'
Many people who never liked him still don't.
That includes many of Toronto's understated Scottish elite who were put off by his flamboyance, several friends say.
There even is a Web site called SupportLordBlack.com that purports to be a place where Black's allies can rally. But on closer examination, it drips with sarcasm, thanking Black for "his Lordship's life's struggle to confront with unflagging courage the Brobdingnagian forces of Canadian small-mindedness, parochialism, mediocrity and failure."
Brian Fawcett, a Canadian author, is certainly no friend of Black's; he calls him a "great big pompous ass." But Fawcett agrees the general mood in Canada is shifting in Black's favor as the trial approaches.
Hollinger's travails under Black pale in comparison with the big corporate fraud scandals such as Enron and WorldCom, where billions of dollars in shareholder value evaporated and thousands of employees had their retirements wiped out, Fawcett says, echoing sentiments expressed by random hotel clerks and cab drivers.
That makes Black seem like "pretty small potatoes," Fawcett adds.
Prosecutors point out that they routinely prosecute bank employees for embezzling amounts as small as $20,000, so the $80 million allegedly appropriated from Hollinger makes it a major case.
John Fraser, a friend of Black's since childhood who now heads Massey College at the University of Toronto, says it's hard to describe how Canada feels about one of its most controversial residents.
"I wouldn't call it sympathy, and it's not exactly affection," Fraser muses, "but he is ours. Maybe there's a rough affection."
One of the few lapses in Black's recent charm campaign came in January when he attacked one of his best friends, University of Toronto provost and historian Margaret MacMillan. Black wrote a review of MacMillan's recently published book, "Nixon in China," but after some initial praise, he said the book was poorly structured and contained factual errors.
"It was a bad sign," Fraser said. "He just wanted to win. He wanted to win the Nixon game."
Not long after, Black wrote a letter to the editor apologizing to MacMillan for the "inadvertent condescension" and "slightly patronizing tone" of his review.
Black's book on Nixon will hit the shelves in Canada in May, and his choice of one of America's most unpopular presidents as his subject is no coincidence, his agent says.
"It has a metaphorical quality," Levin said. "Nixon was beaten down and he came back."
Black doesn't buy the Nixon analogy. "Five-cent psychology," he harrumphs. Black previously wrote a critically acclaimed, 1,360-page biography of another American president, Franklin Delano Roosevelt, one of his childhood heroes.
Privileged, and proud of it
Many Canadians have long felt antipathy toward Black. The scion of a wealthy brewery executive, he grew up on a large estate along Toronto's Bridle Path where he was waited on by servants.
It is very un-Canadian to flaunt wealth, says Black's longtime friend Fraser, but Black never seemed to care.
"When we were at school, Conrad sometimes came in a chauffeur-driven limousine. Once or twice, he stayed in the car until the starting bell rang. It didn't turn on the masters or the boys, to tell you the truth," Fraser said. "Then he would emerge to go to his class, a bit like a senior executive at like--what--the age of 12?"
During his time at Upper Canada College, Black became known for his verbal abilities, prodigious memory and his rebelliousness. He managed to alter records that required him to participate in athletic activities and later was one of several students who stole the school's final exams and sold the answers.
The exam theft was discovered, Black was expelled, and the entire school had to retake its exams. A group of students marched to the Black estate and burned him in effigy on the lawn.
It was one of many scrapes Black would get into.
As a businessman in his 30s, he found himself lambasted after promising to revive troubled Canadian farm equipment-maker Massey-Ferguson and then throwing in the towel in 1980.
A few years later, Black had a run-in with the SEC over whether one of his firms had truthfully laid out its intention to take over Hanna Mining Co., a Cleveland-based mining concern. The SEC investigated, but in the end, the case was dropped. Black signed a consent decree with the SEC, admitting no guilt but promising to avoid future violations of securities laws.
Royal title raises ruckus
His most famous battle, however, had nothing to do with business. Black had been nominated for a peerage by British Prime Minister Tony Blair, and he wanted to accept. Jean Chretien, Canada's then-prime minister and head of the Liberal Party, was reportedly unhappy with the coverage he had received in Black's newspapers and said he would not allow it. Chretien cited a decades-old parliamentary resolution asking the British monarch to refrain from conferring titles on Canadian subjects.
Chretien informed Blair of his displeasure, and Black's name was dropped from the list of nominations. Outraged, Black sued Chretien, but his suit was dismissed by a judge who said he didn't have authority to rule on the matter. Black appealed but then took matters into his own hands. He renounced his Canadian citizenship, moved to London and became Lord Black of Crossharbour. The title refers to a part of London near the Telegraph newspaper's offices.
On his way across the Atlantic, Black didn't hide his displeasure. He called Canadians a bunch of "whining, politically conformist welfare-addicts." He soon sold most of his Canadian newspapers, including his creation, the National Post.
These days, Black sounds much more conciliatory. When asked about Chretien in his recent TV interview, Black says dryly, "We had a little falling out." Then he adds, "For 25 years we got on like smoke. He is a real fighter. He is courageous."
Black is currently trying to reclaim his Canadian citizenship and says he never meant to give it up permanently.
Numerous suits filed
Over the years, Black has launched a wave of litigation, much of it directed at journalists who printed unsavory things about him. After filing numerous defamation suits in Canada, he has succeeded in extracting apologies and out-of-court settlements in quite a few cases. Black also has filed an $800 million suit against members of the special committee at Hollinger, whose report accused him of conducting a "corporate kleptocracy."
Even with his trial approaching, Black in mid-February filed yet another suit, this time a defamation case against Tom Bower, author of the recent Black biography, "Outrageous Fortune: The Rise and Ruin of Conrad and Lady Black."
Black says he is far from done. He promises a raft of other suits after his criminal trial, vowing to regain his reputation and punish those who have wronged him. But he knows that such actions have limitations.
"You can't recover the years and I don't know if you can recover the money," he says referring to immense legal costs he has racked up during the past three years. "That's not so important. Winning the battle becomes an occupation in itself."
Black concedes he would have to be a "barking lunatic" to say there is nothing else he would rather have done with the time he has devoted to his defense. But the fight also has been fulfilling in its own way, he says, and one has to keep one's problems in perspective.
Levine, his literary agent, says Black and his wife are different people than they were before his indictment.
"I think both of them have come to appreciate the value of friendship--more than when they left. They understand the decency of this country."
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Key dates in the Conrad Black case
Conrad Black is charged with diverting tens of millions of dollars from newspaper publisher Hollinger International Inc. to other companies he controlled.
A timeline of the case:
May 22: At the Hollinger annual meeting, CEO Conrad Black and other executives come under fire for collecting $73.7 million in fees from the sale of newspapers.
June 11: Tweedy, Browne Co., a New York investment firm with a 17 percent stake in Hollinger, demands a board investigation into the alleged payments made to executives.
Nov. 17: Hollinger reveals that Black, Sun-Times Publisher David Radler and two others received more than $15.6 million in unauthorized payments. Black, Radler and other executives resign.
Jan. 17: The Hollinger board fires Black as chairman after disclosing it had sued Black, Radler and two Black-owned companies for allegedly taking more than $300 million through personal payments and inappropriate changes to the firm's accounting books.
Nov. 15: The U. S. Securities and Exchange Commission files a civil suit against Radler and Black, saying the two "cheated and defrauded" investors and filed misleading public documents.
March 21: The U.S. attorney's office confirms it is criminally investigating Black and Radler.
Aug. 18: A federal grand jury indicts Radler for allegedly helping funnel $32 million in corporate funds from Hollinger International Inc. to Ravelston Corp., a company he and Black own that is used to control Hollinger Inc.
Sept. 20: Radler pleads guilty to one count of fraud and agrees to cooperate with federal prosecutors.
Nov. 17: A federal grand jury indicts Black, alleging he and others illegally diverted millions of dollars.
Dec. 1: Black pleads not guilty, calling the allegations against him "nonsense."
Jan. 12: The judge pushes back the start date of Black's trial by one week to March 14 after defense lawyers say they do not have enough time to prepare their case.
Source: Tribune reports