|
|
|
|
Conrad Black
|
| |
|
| |
Conrad Moffat Black, Baron Black of Crossharbour, PC, OC, KCSG (born 25 August 1944, in Montreal, Quebec) is a Canadian-born British historian and columnist who was for a time the third biggest newspaper magnate in the world. Before investigation by regulators and investors, Black controlled Hollinger International, Inc. Through affiliates, the company published major newspapers including The Daily Telegraph (UK), Chicago Sun Times (USA), Jerusalem Post (Israel), National Post (Canada), and hundreds of community newspapers in North America.
In 2003, following investor complaints, Hollinger International reported to the United States Securities and Exchange Commission (SEC) about misconduct at the company, including violations of fiduciary obligations by officers.
Discussion
Ask a question about 'Conrad Black' Start a new discussion about 'Conrad Black' Answer questions from other users |
Encyclopedia
Conrad Moffat Black, Baron Black of Crossharbour, PC, OC, KCSG (born 25 August 1944, in Montreal, Quebec) is a Canadian-born British historian and columnist who was for a time the third biggest newspaper magnate in the world. Before investigation by regulators and investors, Black controlled Hollinger International, Inc. Through affiliates, the company published major newspapers including The Daily Telegraph (UK), Chicago Sun Times (USA), Jerusalem Post (Israel), National Post (Canada), and hundreds of community newspapers in North America.
In 2003, following investor complaints, Hollinger International reported to the United States Securities and Exchange Commission (SEC) about misconduct at the company, including violations of fiduciary obligations by officers. The report accused Black and close colleagues of running a "corporate kleptocracy." Black resigned under pressure as CEO of Hollinger International. He was subsequently charged with mail and wire fraud and obstruction of justice.
Black was convicted in Illinois U.S. District Court on 13 July 2007 and sentenced to serve 78 months in federal prison, pay Hollinger $6.1 million and a fine of $125,000. Black was found guilty of diverting funds for personal benefit from money due Hollinger International when the company sold certain publishing assets. He also obstructed justice by taking possession of documents to which he was not entitled.
Personal relationships and family
Conrad Black was born in Montreal to a wealthy family originally from Winnipeg. His father, George Montegu Black, Jr., C.A., was the president of Canadian Breweries Limited, an international brewing conglomerate that had earlier absorbed Winnipeg Breweries (founded by George Black Sr.). Conrad Black's mother was the former Jean Elizabeth Riley, a daughter of Conrad Stephenson Riley, whose father founded the Great-West Life Assurance Company, and a great-granddaughter of an early co-owner of the Daily Telegraph.
Conrad Black's first marriage was to Joanna (born Shirley) Hishon of Montreal, who worked as a secretary in his brother Montegu's brokerage office. The couple had two sons and a daughter.
The couple separated in 1991. Their divorce was finalized in 1992; the same year Black married Watford-born journalist Barbara Amiel. Black flattered Amiel, describing her variously as "beautiful, brilliant, ideologically a robust spirit" and "chic, humorous and preternaturally sexy". Courtroom evidence revealed that the couple exchanged over 11,000 emails.
Early life and career
Black was first educated at Upper Canada College (UCC), during which time, at age 8, he purchased shares in General Motors. Six years later, according to Tom Bower's biography Dancing on the Edge, he was expelled from UCC for selling stolen exam papers. He then attended Trinity College School where he lasted less than a year, being expelled for insubordinate behaviour. Black eventually graduated from a small, now defunct, private school in Toronto called Thornton Hall, continuing on to post-secondary education at Carleton University (History, 1965). For a time, he attended Toronto's Osgoode Hall Law School of York University; however, his studies ended when he failed exams after first year. He completed a law degree at Université Laval (Law, 1970), and in 1973 completed a Master of Arts degree in history at McGill University. Black's thesis, later published as a biography, was on Quebec premier Maurice Duplessis.
Biographer George Toombs said of Black's motivations: "he was born into a very large family of athletic, handsome people. He wasn't particularly athletic or handsome like they were, so he developed a different skill - wordplay, which he practised a lot with his father." Black became involved in a number of businesses, mainly publishing newspapers, but briefly in mining. In 1966 Black bought his first newspaper, the Eastern Townships Advertiser in Quebec. Following the foundation, as an investment vehicle, of the Ravelston Corporation by the Black family in 1969, Black, together with friends David Radler and Peter G. White, purchased and operated the Sherbrooke Record, the small English language daily in Sherbrooke, Quebec. In 1971, the three formed Sterling Newspapers Limited, a holding company that would acquire several other small Canadian regional newspapers.
Corporate ownership through holding companies
George Black died in June 1976, leaving Conrad and his older brother, Montegu, a 22.4% stake in Ravelston Corp., which by then owned 61% voting control of Argus Corporation, an influential holding company in Canada. Argus controlled large stakes in 7 major Canadian corporations, Labrador Mining, Noranda Mines, Hollinger-Argus, Standard Broadcasting, Dominion Stores, Domtar and Massey-Ferguson.
Through his father's holdings in Ravelston, Conrad Black gained early association with two of Canada's most prominent businessmen: John Angus "Bud" McDougald and E. P. Taylor, president and founder of Argus, respectively. Following McDougald's death in 1978, Conrad Black paid $30-million to take control of Ravelston and thereby, control of Toronto based Argus. This controversial arrangement resulted in accusations that Black had taken advantage of the aging widows of Ravelston Directors McDougald and Eric Phillips. Other observers admired Black for marshaling enough investor support to win control without committing a large block of personal assets.
Some of the Argus assets were already troubled, others did not fit Black's long term vision. Black resigned as Chairman of the struggling Massey Ferguson company in 1979, after which Argus donated its shares to the employee union. Hollinger Mines was then turned into a holding company that initially focused on resource businesses.
In 1981 Norcen Energy, one of his companies, acquired a minority position in Ohio-based Hanna Mining Co. A filing with the U.S. Securities and Exchange Commission stated that Norcen took "an investment position" in Hanna. However, the filing failed to disclose that Norcen's board planned to seek majority control. Black subsequently was charged by the SEC with filing misleading public statements, charges that were later withdrawn by "consent decree" after Black and Norcen agreed not to break securities laws in the future.
Dominion pension dispute
In 1984, Dominion Stores Ltd. withdrew over $56 million from the Dominion workers' pension plan surplus without consulting plan members. The firm said it considered the surplus the rightful property of the employer (Dominion Stores Ltd.). = The Dominion Union complained, a public outcry ensued, and the case went to court. The Supreme Court of Ontario eventually ruled against the company, and ordered the company to return the money to the pension fund, claiming that though the most recent language in the plan suggested the employer had ownership of the surplus, the original intention was to keep the surplus in the plan to increase members' benefits. The company appealed the case all the way to the Supreme Court of Canada, which upheld the lower court's decision.
Industrial holdings shifted to publishing
Over time, Black focused formerly diverse activities of his companies on newspaper publishing. Argus Corporation, once Canada’s most important conglomerate, divested itself of interests in manufacturing, mining, retailing, banking and broadcasting. This enabled Canadian writer John Ralston Saul to argue in 2008, “Lord Black was never a real "capitalist" because he never created wealth, only dismantled wealth. …his career has been largely about stripping corporations. Destroying them."
Growth and divestment of press holdings
In 1985, Andrew Knight, then editor of The Economist, asked Black to invest in the ailing Telegraph Group. By this investment, Black made his first entry into British press ownership. Five years later, he bought the Jerusalem Post, and subsequently fired the majority of its staff. By 1990, his companies ran over 400 newspaper titles in North America, the preponderance of them small community papers.
Hollinger bought a minority stake in the Southam newspaper chain in 1993 and acquired the Chicago Sun Times in 1994. Hollinger International shares were listed on New York Stock Exchange in 1996, at which time the company boosted its stake in Southam to a control position. Becoming a public company trading in the U.S. has been called "a fateful move, exposing Black's empire to America's more rigorous regulatory regime and its more aggressive institutional shareholders."
Under Black, Hollinger launched the National Post in Toronto in 1998. From 1999 to 2000 Hollinger International sold several newspapers in five deals worth a total of US$679-million, a total that included millions of dollars in "non-compete agreements" for Hollinger insiders. Later in the year, Hollinger International announced the sale of thirteen major Canadian newspapers, 126 community newspapers, internet properties and half of the National Post to CanWest Global Communications Corp. Hollinger International sold the rest of the National Post to CanWest in the summer of 2001.
In May 2003, following shareholder complaints, a special committee appointed by Hollinger International directors began investigation of internal financial management, particularly compensation and fees paid directly and indirectly to Ravelston's and Black's associates. For example, in 2000, in an illegal and surreptitious arrangement that came to be known as the "Lerner Exchange," Black acquired Chicago's Lerner Newspapers and sold it to Hollinger. The subsequent report supported allegations of impropriety and led to criminal investigations and ultimately, the unraveling of Conrad Black's financial empire.
Black was called before the U.S. Securities and Exchange Commission in December, 2003 but he refused to answer questions about business dealings, citing his Fifth Amendment right against self-incrimination.
Black attempted to sell controlling interest in Hollinger International to British businessmen David and Frederick Barclay. The Hollinger board of directors sued to halt Black's proposed transaction. In February, 2004, Delaware judge Leo E. Strine, Jr. barred the sale and wrote in his judgment, "Black breached his fiduciary and contractual duties persistently and seriously... I found Black evasive and unreliable. His explanations of key events and of his own motivations do not have the ring of truth."
Lifestyle
Born to a rich family, Black acquired the family home and of land in Toronto's exclusive Bridle Path neighbourhood after his father's death in 1976. Black and first wife Joanna Hishon maintained luxurious homes in Palm Beach, Toronto and London. After he married Barbara Amiel, he acquired a luxury apartment in New York. Black's Palm Beach mansion was listed for sale in 2004 at $36 million. He previously owned an apartment on Park Avenue in New York. When sold in 2005, the U.S. Department of Justice seized net proceeds of $8.5 million, pending resolution of court actions.
He also owned a London townhouse in the Kensington district and sold it in 2005 for about US$25 million.
According to biographer Tom Bower, "They flaunted their wealth." Black's critics, including former Daily Telegraph editor Charles Moore, suggested it was Black's second wife, Amiel, who pushed him towards a life of opulence, citing extravagant expenditures such as items billed to Hollinger expenses that included $2,463 (£1,272) on handbags, $2,785 in opera tickets, and $140 for Amiel's "jogging attire."
Black was ranked 238th wealthiest in Britain by the Sunday Times Rich List 2003, with an estimated wealth of £136m. He was dropped from the 2004 list.
Peerage controversy and citizenship
The Canadian Prime Minister originally prevented Black from receiving the British peerage offered on advice of British Prime Minister Tony Blair, to be awarded by Queen Elizabeth II. Jean Chrétien referred to the 1919 Nickle Resolution, by which the Canadian House of Commons resolved that the Canadian Monarch should not confer titular honours on Canadians.
Black said he would accept the peerage as a British citizen instead, but Prime Minister Chrétien asserted nevertheless that the Queen should not bestow a titular honour on a Canadian. Black argued that the strict interpretation of the Nickle Resolution was payback for his political opinions and past criticism of Chrétien and sued him unsuccessfully. On appeal, the Court of Appeal for Ontario stated that the Prime Minister had a constitutional right to advise the Queen on exercising the Royal Prerogative.
In 2001, Black renounced his citizenship of Canada, which he called "an oppressive little world". Eric Reguly wrote in The Times, "The great man fled his native Canada for Britain. He couldn’t wait to leave, he said, because Canada was turning into a Third World dump run by raving socialists." Black's lawyer, Eddie Greenspan, later stated Black's citizenship: "was stolen from him" by "spiteful" former Prime Minister Jean Chrétien.
Black was created a life peer as Baron Black of Crossharbour, in the London Borough of Tower Hamlets. Baron Black sat as a member of the British Conservative Party until July 13, 2007, when he was denied the whip (effectively, expulsion from the Conservative benches) because of his conviction.
In September 2006, The Globe and Mail reported Black was taking steps to regain Canadian citizenship. He may have desired this to qualify for prisoner exchange and benefit from Canadian early release policies or to enable him to cross the border following a conviction. In a TVOntario interview, Black claimed, "I always said that I would take my citizenship back, and if it wasn't for all these legal problems, I would have done it by now." He told interviewer Steve Paikin that he was working through "normal channels." Black also said, "I have settled into my new life as freedom fighter. It's very interesting, it's quite stimulating in a way, but it is an ordeal"
Even without Canadian citizenship, Black continues to be a member of the Queen's Privy Council for Canada, to which he was appointed by Governor General Ray Hnatyshyn, on the advice of Prime Minister Brian Mulroney, in 1992. The full Privy Council meets very rarely and has no substantive power so the appointment is honorific.
Criminal fraud trial
May 2003, New York investment firm Tweedy Browne Co., which had an 18% stake in Hollinger International, demanded the company probe what it alleged to be excessive payments to Conrad Black and David Radler, and demanded "disgorgement" of the funds paid.
In November 2003, under pressure, Black resigned as chief executive of Hollinger. By January 2004 the board of directors of Hollinger obtained Black's resignation as chairman. Hollinger International filed a $200 million (USD) lawsuit against Black, David Radler and their associated companies.
In August 2004, a special committee of the Board of Directors of Hollinger International Inc. made a report of investigation to the U.S. Securities and Exchange Commission and the U.S. District Court. The "Breeden Report" alleged that Black and associates had without proper authorization taken cash and other assets and benefits from Hollinger and had breached their fiduciary duties to Hollinger’s public majority, non-controlling shareholders.
In November 2004, the SEC filed civil fraud lawsuits against Black and several others, alleging the defendants cheated and defrauded shareholders through a series of deceptive schemes and misstatements. . One year later, eight criminal fraud charges were brought by the Chicago U. S. Attorney against Black and three former Hollinger executives. The U.S. Attorney laid four new charges against Black on 15 December 2005, alleging racketeering, obstruction of justice, money laundering and wire fraud. Under the racketeering count, the government sought forfeiture of more than $92,000,000 (USD). The obstruction count related to Black and his chauffeur removing boxes of documents from Hollinger offices in Toronto on June 9, 2005 contrary to a court order that prohibited removal.
The criminal fraud trial of Black and three other Hollinger International executives commenced on 14 March, 2007.
Verdict and sentence
After twelve days of deliberation, on 13 July 2007, the jury found Black guilty of three counts of mail and wire fraud and one count of obstruction of justice and acquitted him of nine other charges, including wire fraud and racketeering. The fraud convictions related to money taken by the executives in exchange for their agreements to not compete with a Hollinger unit. Prosecutors said these were sham agreements.
Co-accused, Peter Y. Atkinson, John A. Boultbee and Mark Kipnis, were each found guilty of mail and wire fraud (David Radler had already pleaded guilty to fraud).
On November 5, 2007, Judge Amy St. Eve denied Black's bid for a new trial. On December 10, 2007, Black was sentenced to 78 months in jail. Twelve weeks later, he lost a bid in the Court of Appeals to remain free on bail while appealing his convictions. Black requested to be housed in a minimum security prison camp near Miami but the Bureau of Prisons denied his request and instead ordered him to report to Coleman Federal Correctional Complex near Orlando, Florida on March 3, 2008 to begin serving his sentence. Unless his convictions are overturned on appeal, Black's projected release date is October, 2013.
Reaction and consequences
Black told journalists he would continue his "long war" against the charges and said "any conviction is unsatisfactory". After the verdicts, Black's Canadian lawyer Edward Greenspan said, "The heart of their case was lost." However, former federal prosecutor and SEC enforcement lawyer Jacob Frenkel called it a "stunning victory" for the government and explained how a split verdict "highlights for the appellate court that the jury was very thoughtful and thorough in its deliberations."
Investigators hired by Hollinger companies have been examining more than forty bank accounts which may be, or may have been, held in the name of Black, his wife, or affiliated entities. According to court filings, Ravelston Corp. also had a subsidiary in Barbados called Argent News Inc. and another in Bermuda called Sugra Bermuda Ltd. A report by a special committee of the board of Hollinger International Inc. said Black co-owned two Barbados companies, Moffat Management Inc. and Black-Amiel Management Inc., which both received millions of dollars in payments, the former allegedly owned by Black and his co-defendants, and the latter by Black, his wife and Boultbee. In November, 2007, Sun-Times Media Group (ex-Hollinger) said in a regulatory filing that it had spent $107.7 million on legal fees and indemnification costs for criminal and civil actions involving Black, Boultbee, Kipniss and Atkinson. If appeals are unsuccessful, the company may seek to recover the money.
After the verdict, New Democratic Party of Canada Member of Parliament Charlie Angus publicly called for Black's expulsion from the Queen's Privy Council for Canada and for his removal from the Order of Canada. The Toronto Star similarly called for Governor General Michaëlle Jean to remove Black from the Order. Canadian Prime Minister Stephen Harper stated that Black would have to go through regular channels to attempt to regain his Canadian citizenship, that membership in the Order of Canada is the purview of the Governor General and that decisions about the Privy Council would only take place after the legal process, including appeal, had been completed.
Black's ability to re-enter Canada is uncertain unless he obtains dispensation from the Canadian Government. Were he to regain residency, "Canadian citizenship can't be granted to those who are criminally inadmissible and neither the minister nor the Governor in Council (cabinet) can override that," according to an immigration department spokesperson. The loss of his Canadian citizenship also makes it impossible for Black to be transferred to a Canadian prison where he would be eligible for parole much sooner than if he were to serve time in the United States.
Appeal
Black's oral arguments were heard June 5, 2008 by a three-judge panel of the 7th U.S. Circuit Court of Appeals. Andrew Frey argued that Black and his co-defendants did not steal from Hollinger when they authorized individual non-competition payments. Frey asserted that the monies were "management fees" and that Hollinger International shareholders were not hurt by the payments. Appeals judge Richard Posner said, "The bulk of the evidence [in the Hollinger case] has to do with pretty naked fraud." Posner was skeptical about defense arguments that Black did not obstruct justice by removing boxes from his Toronto office, commenting, "The timing was bizarre, the removal of the documents in the middle of an investigation." Three weeks later, on June 25, 2008, the 7th Circuit Court of Appeals affirmed the convictions in a decision that called some of Black's conduct at Hollinger "ridiculous" and rejected all of the arguments raised by the defense. The appellate court found that "the evidence established a conventional fraud, that is, a theft of money or other property from Hollinger by misrepresentations and misleading omissions ..." The panel affirmed the jury's findings stating that, "It is not as if Black had merely been using his power as controlling shareholder to elect a rubber-stamp board of directors or to approve a merger favorable to him at the expense of the minority shareholders ... He was acting in his capacity as the CEO of Hollinger when he ordered (Mark) Kipnis to draft the covenants not to compete and when he duped the audit committee and submitted a false 10-K."
Prosecutor Eric Sussman replied to news of the initial appeal decision saying, "I think at some point in time Mr. Black needs to take a hard look in the mirror and ask who it is that really doesn’t understand the conduct that took place in this case…You’ve got 16 people who have taken a look at the facts and the law in a very detailed and time-consuming way, and they have all reached the same conclusion, which is that he stole money from this company and he tried to obstruct the investigation."
Black added Harvard professor Alan Dershowitz to his law team and asked the 7th Circuit Court to reconsider the appeal decision. August 21, the court declined reconsideration. According to lawyer Andrew Frey, Black has until November 12 to ask the U.S. Supreme Court to hear an appeal. In June 2008, he ruled out trying to obtain a presidential pardon from George W. Bush, however he later applied for one in November of the same year. The final acts of clemency of Bush's presidency were announced on his last full day of office, January 19, 2009. Black's name was not included in the list of commuted sentences.
On January 9, 2009, it was reported that Black's lawyers have filed a petition with the U.S. Supreme Court to hear an appeal to overturn his conviction. Jacob Frenkel, a former US prosecutor who has followed the case, told Canadian Press that the appeal was unlikely to succeed saying that it must get through a proverbial door "with such a small crack that the likelihood of getting in is negligible." The Supreme Court is expected to announce its decision on hearing the petition on March 13, 2009.
Imprisonment
In August 2008, Black's wife, journalist Barbara Amiel, defended her husband in a lengthy article first published by Maclean's then in The Sunday Times. In a blog published on the Financial Times website, John Gapper writes that this defence had "an entertainingly deranged quality since Lady Amiel (sic) admits no wrong, on behalf of either of the pair, and is contemptuous about almost everyone else’s behaviour".
On August 23 2008, Black authored a piece in the National Post about the experience of jail. He still claims to be mistakenly convicted and asserts "The bunk about a lavish lifestyle was disbelieved and rejected by the jury." He believes that time will show the Canadian and American justice systems were disgraced by his conviction, not him. He adds, "But someone has to resist the putrification of justice in these jurisdictions, and if someone of my means doesn't, who will?"
Black writes: "If saintly men like Gandhi could choose to clean latrines, and Thomas More could voluntarily wear a hair shirt, this experience won't kill me." Robert Fisk, writing in The Independent says, "Now when Uncle Conrad likens himself to the assassinated Mahatma, the apostle of India, that is mere hubris. But when he compares himself to England's greatest Catholic martyr, a man of saintly honour if ruthless conviction, this is truly weird."
In 2008 Black wrote to the Canadian Press, commenting that, "I am doing fine. This (Coleman Federal Prison) is a safe and civilized place, and I don't anticipate any difficulty."
Books and other publications
As a young man, Black wrote a thesis on Quebec's controversial long-serving premier, Maurice Duplessis, which was subsequently published in 1977 as a laudatory biography, entitled Duplessis (ISBN 0-7710-1530-5).
Black published an autobiography in 1993, titled A Life in Progress (ISBN 9781550135206).
While Black was CEO of Hollinger International, the company spent millions of dollars purchasing collections of private papers of US President Franklin D. Roosevelt.. Black subsequently completed a 1,280-page biography, Franklin Delano Roosevelt, Champion of Freedom (ISBN 978-1586481841), in 2003.
In 2004, Black wrote an essay on the possible results had the Japanese not bombed Pearl Harbor in 1941, for the imaginary history book What Might Have Been edited by Andrew Roberts.
Published in 2007, Black's Richard M. Nixon: A Life in Full (ISBN 978-1586485191), is a biography of US President Richard Nixon that runs 1,152 pages. One reviewer wrote that Black provided "exculpatory gloss for seemingly every grimy facet of Nixon’s career."
From jail, Black promises that his next book will tell how his business empire was destroyed while court-protected managers enriched themselves and eradicated shareholder value. He says, "The judiciary and regulators in both countries are complicit in these events. They will have much to answer for. This is the real story, and I will publish it soon."
In the November issue of Spear's magazine, Black wrote a diary piece from jail, detailing 'the putrification of the US justice system' and how 'the bloom is off my long-notorious affection for America'.
On March 5, 2009, Black contributed a piece to the online version of the conservative magazine National Review (NRO). Called 'Roosevelt and the Revisionists' and based on his earlier biography of Roosevelt, it argued that FDR's New Deal was intended to save capitalism, and so deserved conservative support. In her March 9 critique of this piece on NRO, author Amity Shlaes observed:
"...I will be co-hosting, with Dean Thomas Cooley of NYU/Stern, a “Second Look” conference on March 30 to permit scholars to present the multiple studies that suggest the New Deal and Great Depression are worth taking a look at from every angle. The great shame here is that Conrad would have added much to this event, and yet he cannot attend."
Biographies and portrayal in popular culture
Citizen Black, which premiered at the 2004 Montreal and Cambridge film festivals, traces Black's life and filmmaker Debbie Melnyk's attempts in 2003 to interview Black, and her eventual interview. US prosecutors subpoenad unused footage of a 2003 shareholders meeting for use in Black's trial. Canadian actor Albert Schultz portrayed Black in the 2006 CTV movie Shades of Black. Tom Bower's biography Conrad and Lady Black: Dancing on the Edge (ISBN 0007232349) was published in 2006 by Harper Collins. It was republished in August 2007 with an additional chapter reporting on the trial and its outcomes. There is talk of two dramas based on his life: one from Tom Bower and Andrew Lloyd Webber and another from Alistair Beaton. The last authorized portrait busts of Conrad Black and Barbara Amiel were created between 2001-2002 by Canadian sculptor Dr. Elizabeth Bradford Holbrook and arranged by noted Canadian artist Christian Corbet. A book "Robber Baron: Lord Black of Crossharbour" was published in 2007 by ECW press and written by George Tombs. Isbn 978-1-55022-806-9
External links
- Complete 512-page copy of the Report of Investigation by the Special Committee of the Board of Directors of Hollinger International Inc.
-
- a review in the by Anthony Holden, August 8 2007
- profile from
NNDB profile from RightWeb CBC, documentary originally aired 24 March, 2005 on CITY-TV , thestar.com, May 11 2007
|
| |
|
|
