As the first guilty verdict was read out to the crowded courtroom by the judge
on Friday, Conrad Black’s eyes closed, his head fell and his mouth opened in
a silent gasp.
Without glancing at Barbara Amiel, his wife, who was sitting close by, Lord
Black of Crosshar-bour looked distraught as the verdicts continued.
Convicted of obstruction of justice and three counts of fraud, he realised
that his biggest battle was finally lost.
Henceforth the former owner of The Daily Telegraph would be damned as a felon
alongside Robert Maxwell, the late proprietor of the Daily Mirror. Black
knew that his arrogance and deceit would, if the prosecutors’ sentencing
demands were met, be punished by least 15 years’ imprisonment.
Ten minutes after the first guilty verdict was announced, Amiel leant forward
and passed her husband a note. Redeyed, he scribbled a reply and sat
motionless. Finally, the man who thought that the truth could be concealed
by lies had been exposed as a charlatan.
Just minutes later he glanced across at me, yards away. His battle to suppress
the truth in my biography of him had shuddered to a halt. Like so many of
his prophesies, his e-mail to me in April 2006 saying, “I promise a
spectacular trial”, had been hot air. His lifetime of threats and writs was
abruptly curtailed.
Strangely our relationship had been civil until the book’s publication. I had
been thrilled when an e-mail unexpectedly arrived from him at 1.15am on
April 1, 2006.
Black, whom I had known since the mid1980s, was well aware of my book’s
progress. He wrote that he had been contacted by acquaintances seeking
advice as to whether they should talk to me. His response was nothing if not
graphic: “Dear Tom, “Many people have contacted Barbara and me asking if
they should talk with you. Our usual response is that you have made it clear
that you consider this whole matter a heart-warming story of two sleazy,
spivvy, contemptible people, who enjoyed a fraudulent and unjust elevation;
were exposed, and ground to powder in a just system, have been ostra-cised;
and largely impoverished, and that I am on my way to the prison cell where I
belong. It is the false rise and well-deserved downfall of crooked
charlatans; a variant on your treatments of Maxwell and Rowland. You have
expressed essentially this view many times that have been reported to me.”
He asked me to prove that I was not writing “a pompous, defamatory celebration
of the supposed demise of people you personally dislike”.
I never disliked Conrad Black. Nor do I now. Lacking any personal animus, I
was persuaded by the evidence that he was a crook and was baffled by those
sychophants and simpletons in London who assumed his innocence despite
overwhelming proof of his dishonesty. I was relieved that Manhattan’s Alist
condemned him as a fraudster. In New York they uniformly expected his
conviction.
By contrast, Black’s fate will horrify his friends and admirers in London.
Convinced by his aggressive PR campaign belittling the case against him as
“a joke” and “pure fiction”, they believed the jury would equally succumb to
what amounted to a smokescreen of bluster.
To me, the outcome was never in doubt. While the trial focused on sample
frauds of $60m, Black had been accused by corporate investigators of
stealing more than $400m to enjoy a billionaire’s lifestyle without
contemplating his fate should the money and his excuses run out.
His rise and ruin is a familiar morality tale of those consumed by ambition
and greed. Anxious to mix among the world’s elite, he acquired a trophy wife
who boasted “an extravagance that knows no bounds”, acquired the necessary
toys – including a corporate jet at $7m per annum, four huge homes in
London, Toronto, New York and Palm Beach, 19 personal staff and more than a
dozen cars – gave huge donations to charities and hosted expensive parties.
His arrogance was complemented by Barbara Amiel’s disdain for mere mortals.
Together they embarked on a decade of unaffordable excess, climaxing in July
2000 in a spending spree in Bond Street, London, in which they snapped up a
$2.6m diamond ring, a $600,000 brooch, couture clothes worth $217,000 and,
as an afterthought, rare books for Black worth more than $100,000.
All of it, his accusers claimed, was funded by diverting millions of dollars
from Hollinger International, the publicly owned media company based in New
York.
His acquittal on nine of the 13 charges against him – including using
Hollinger money to buy the $2.6m ring – was hailed by defence lawyers as a
victory.
The prosecutors were equally “thrilled”, however, to have convicted him of
frauds of more than $3m. Their relief was patent. At times during the
15-week trial the prosecution seemed to be faltering and at the end the jury
were clearly divided. Over 12 days of deliberation, the splits among the
nine women and three men were reconciled only by harsh negotiations in the
jury room.
James Kirby, a juror who clearly was battling for more convictions, told me
afterwards: “To paraphrase Donald Rumsfeld, you go to trial with the jury
you have, not the jury you want.”
Speculation will now focus on the fate of 66-year-old Amiel. Many doubt
whether the four-times married journalist will wait for his release. After
all, when Black is eventually freed there will be no money, no fun and few
friends. She has been asking her circle what welcome she might get if she
were to return to her native England.
The American Securities and Exchange Commission (SEC) and the plaintiffs of
innumerable law suits intend to squeeze the last dollar from the Blacks’
fortune, assumed to be deposited in offshore tax havens, and Amiel is a key
target.
As a director of Hollinger she earned more than $1m a year, drew enormous
expenses and did not challenge her husband’s frauds. Although not
incarcerated, she should remain haunted by the legacy of profiting from the
crime.
Nervous and occasionally hysterical in Chicago, Amiel has lost weight –
allegedly she eats little more than a banana every day – whereas her husband
became fatter, eating regularly at the famous Spiaggia restaurant.
Although Black’s London friends explained his decision not to testify at his
trial as self-protection – his lofty manner would alienate the jury, it was
said – he had good reason to fear the witness stand. In a secret mock
cross-examination with a friendly lawyer in Chicago some weeks ago, his
weaknesses were exposed and his lawyers concluded he would be crucified by
the prosecution if he took the stand.
To Black’s advantage, the judge excluded evidence that could have been hugely
incriminating. But his fate was sealed by witnesses, including former
friends, his own e-mails and the decision not to testify.
Appropriately, considering his latest book is about Richard Nixon, Black’s
final mistake was two tape recordings whose existence he had long forgotten.
They record him addressing the annual shareholders’ meetings in 2002 and
2003.
He can be heard repeatedly lying to shareholders, denying use of a corporate
jet for private trips and, more importantly, insisting a succession of
“noncompete” payments were negotiated and approved by his company’s
independent directors. Three of those payments, the jury decided, were bogus
and defrauded the shareholders.
Walking like a zombie, Black left court after the verdict and was driven to
the five-room suite he and Amiel have lived in since March in Chicago’s Ritz
Carl-ton hotel. Now the 62-year-old tycoon faces imprisonment with murderers
and rapists.
Sentencing is not likely until November. Before then the court’s presentence
investigation service will undertake a lengthy examination of Black’s life
for the judge – with his cooperation.
Both sides will present posttrial motions arguing whether or not the jury’s
verdict should stand. Black also has an automatic right of appeal, which
would take place after sentencing.
Bail has been set at $21m of his money, but the prosecution questions the
quality of the sureties and wants more, because many assets he has pledged
are subject to demands from the SEC and other plaintiffs. At a posttrial
hearing on Thursday the court will want to know what other assets are
available Black surrendered his passport after his conviction and has been
ordered to stay in Chicago and its suburbs. He will not be allowed back to
Canada.
Many of his friends doubt whether he can survive incarceration. This is a man
who, his wife once revealed to a colleague, played with toy ships in his
bath.
It would be wrong, however, to say his disgrace is the consequence of a
momentary aberration. On the contrary, throughout his life he profited from
being a cheat and a liar. The few who had previously attempted to expose
Black’s magpie dishonesty had been suppressed amid a torrent of libel writs.
Performing as a media tycoon owning more than 500 newspapers, he played the
part of the power broker among politicians and financiers. His routine was a
brilliant smokescreen for crime, as I discovered when I wrote his biography.
My book had legal consequences. Just days before his trial started last March,
Black confided to a friendly Canadian journalist: “Bower’s getting it. It’s
the mother of all writs.” This 48-page document included a demand for C$11m
(£5m) damages. Since the evidence against Black was so overwhelming, I never
bothered to read it, but I witnessed his pleasure in anticipating my ruin
every day during the trial.
Seated just yards from me, he regularly glared from the corner of his eye.
Every morning I could see from his face that he was furious with my
newspaper coverage of the previous day. He threatened to intensify what had
become his personal battle. Once, seeing I was talking to Ed Gen-son, his
American lawyer, he sped towards us. “Don’t talk to him,” he snapped. “He’s
the next trial.”
Of course, he expected a very different outcome. As he had once e-mailed to
me: “The rough facts are that I am an honest businessman; the chances of my
committing an illegality are less than zero, this will be clear when my
accusers have to prove beyond a reasonable doubt the guilt of innocent
people and not just manipulate the agencies of the US and Canadian
governments to act on the preemptive presumption of guilt and conduct a
prolonged assassination of careers and reputations.”
Comforted by dozens of credulous journalists, Black believed that he could
write his own self-glorifying story in Chicago and crush those who offered
the truth.
By contrast, I trusted the low-paid prosecutors and the remarkable judge, Amy
St Eve, to rebuff his lies. And that produced an eerie paradox. Nearly every
prosecution witness was accused by Black of lying but he never dared testify
himself. And that was why I never feared his writ for defamation. Black, I
knew, would lack the courage to testify in his own defamation trial.
Black has never dared to expose himself to cross-examination, and too many
among Canada’s sychophantic media tolerated that outrage.
As I found when writing his biography, his career as a fraudster goes back to
his days at school, where he stole and sold exam papers. Inheriting
substantial funds, he originally built his fortune by tricking two widows to
sign over control of a $4 billion conglomerate and in 1982 was condemned by
a judge in Ohio for lying during a covert takeover bid.
Repeatedly he squandered millions on his lifestyle, resorting to thefts from
shareholders to pay his bills.
Black, a Catholic convert, never seems to have been troubled by his
conscience. Like many confidence tricksters he appealed to God to confirm
his entitlement to shareholders’ money.
Until honest fund managers began questioning Hollinger’s accounts in 2001, few
realised Black owned only 16% of the company while exercising control with
72% of the voting shares. No one knew until two years later that he had,
with David Radler, his partner since 1969, personally pocketed 95% of the
company’s entire net income.
The full truth emerged only in November 2003 after an investigation –
commissioned by Hollinger’s independent directors and led by Richard
Breeden, a former chairman of the US Securities and Exchange Commission –
described his fraud as “corporate kleptocracy”.
Black’s friends, however, accepted his own damning verdict on the 513-page
report as “a travesty” and “a tissue of lies”.
The same admirers chose to ignore Black’s resignation as Hollinger chief
executive and his subsequent signed undertaking admitting wrongdoing and
agreeing to repay $7m to Hollinger. They even ignored television interviews
in which Black confessed his errors.
That documented self-incrimina-tion, which he later reneged on, was just one
of the dozens of items of evidence excluded from his trial in Chicago by
Judge Amy St Eve.
Nor were prosecutors allowed to show the jury an e-mail exchange between Black
and Jack Boultbee, his finance director, who was also convicted. On August
15 2002 Black had complained he was “about to run out of money” due to
“extraordinary expenses, in construction and decoration of residences”.
In February 2003, Black’s assistant asked Boultbee where she could get more
money to pay Black’s bills. Boultbee replied: “What happened to the $500,000
I paid [Black] in December? There is very little available if we go through
it at this rate.”
Despite the evidence excluded from the trial, the prosecution was able to
allude to a self-destructive pattern: each time Black and Radler executed a
noncompete payment, Black embarked on a spending spree to thrill Barbara
Amiel – with whom he was besotted.
Her influence cannot be exaggerated. But the attractive, intelligent, yet
ultimately insecure femme fatale was not uniquely to blame. Both she and her
husband longed for acceptance among Manhattan’s plutocrats.
Until Black’s first wife, Shirley, abandoned him in 1991, the media tycoon’s
lifestyle had been fairly modest. Although a good dealmaker, Black was a
lazy, negligent manager of his assets. He relied on Radler to wring profits
out of the 500 North American newspapers they owned.
With limited income, Black lived in his parent’s mansion in Toronto, a modest
house in Highgate, north London, and an unspectacular house in Palm Beach.
Marriage to Amiel in 1992 provoked an explosion in his ambitions. Overnight
the duo moved into mansions and flew by private jet. To prove his love and
fortune, Black paid for an endless supply of £20,000 couture dresses, £3,000
handbags, dozens of Manolo Blah-nik shoes and countless accessories for his
bride.
Most important was the cascade of jewels. Amiel admitted her fondness for huge
diamonds. “I found I really liked the stuff,” she wrote. “That’s when the
trouble began.” After marrying Black, she continued, she had “vaulted into
circles where, for some people, jewellery is a defining attribute, rather
like your intelligence or the number of residences you have”.
The jury heard that Black had spent $12,000 on a diamond vault to store
jewellery worth more than $30m. Further extravagance was $2.3m spent
furnishing their Manhat-tan apartment with bizarre ornaments including two
marble elephants for $35,420, carpets worth $350,000 and a $4,399 towel
rack.
Black’s fraud was crude. In 1998 he decided to sell more than 300 newspapers
owned by Hollinger International in North America. The reason, he explained,
was the declining profitability of newspapers. In truth, Hollinger could no
longer sustain debts of over $3 billion, accumulated because of the Blacks’
extravagance.
Offloading the papers in five separate deals for about $1 billion, Radler
asked the buyers to include noncompete agreements in the contract, and
include a value on those clauses.
Noncompetes are normal contrac-tual conditions to prevent the seller setting
up as a rival to the purchaser after the sale; but what made this different
was Black’s suggestion that he, Radler and Hollinger Inc, a Canadian shell
company, be named as the recipients of the payments.
In what became known between the partners as “the Template”, they took 25% of
each noncompete payment for themselves.
Each of the purchasers testified in court that they had not wanted a
noncompete agreement with Radler or Black and, although agreeing to include
them in the contracts, they had refused to divert the money directly to the
two Canadians. More than $60m was transferred from Hollinger in New York to
Black’s and Radler’s bank accounts in Toronto.
Deceiving Hollinger’s independent directors was easy. All were international
celebrities hand-picked by Black for their trust in him. The most important
were the three directors on the audit committee: Richard Burt, a former US
ambassador in Germany, Marie-Josée Kravis, an economist and the wife of the
billionaire financier Henry Kravis, and “Big” Jim Thompson, a former US
government attorney and governor of Illinois.
All three testified that they had relied on Black and Radler to tell them the
truth and they had been deceived. All three were shown during the trial to
be gullible, but not criminal.
Radler admitted that he had never revealed the illegal noncompete payments.
Black insisted that because the directors had signed their approval for some
of the noncompete payments, he was exonerated of any crime. The directors
insisted that their “approval” was obtained by stealth and fabrication. As
the jury were told: “Just because the security guard outside the bank is
asleep, it doesn’t mean it’s legal to rob the bank.”
In acquitting Black of two noncompete frauds, the jury seem to have accepted
that the celebrity independent directors were at fault.
But even Black did not attempt to argue that the directors’ “approval” had
been given to three noncompete payments for Hollinger’s “sales” to its own
subsidiaries – executed because Black needed instant cash and because, at
the shareholders’ expense, he and Radler were building a new, private media
company.
In one of those agreements, Black paid himself $2.5m not to compete with one
newspaper which he later bought from Hollinger for just $1. Unknown to the
directors, Hollinger had been offered $2m for the paper by another company.
Black’s conviction provokes three intriguing questions. First, why did he do
it? An easy reason is that his love of Amiel triggered a surge in his
already proven dishonesty.
Second, why did he have as his defence lawyer “Fast” Eddie Green-span, a
17-stone ego-tripping Canadian who seems to have alienated the jury? The
answer is a mixture of overconfidence and fear of the truth.
Third, how on earth did Black ever think he would get away with it? To that
riddle there are at least three explanations: he believed that, as in his
earlier swindles, he could talk his way out of any tight corner; he
convinced himself he had left no incriminating fingerprints; and most
importantly he never anticipated that David Radler, his partner since 1969,
would confess and testify for the prosecution in return for a minimum
sentence.
During Radler’s seven days of testimony, I sat with him early most mornings by
our hotel’s swimming pool. Munching an apple, he was stoic about his fate
but noticeably furious about the behaviour of his ex-partner and –
especially – of Barbara Amiel.
Radler blamed Amiel for Black’s obsession to feed her extravagance. Insane
greed, Radler believed, had destroyed all their lives. Black, he knew,
resented that judgment.
Conrad Black demanded that the world accept him and Amiel on their own terms.
Those who refused to obey, including Radler, were hated. Journalists like
myself were, as Black said about me, “a pestilence” to be swatted like
flies. A chorus of his sympathisers cheered his graphic denigration.
Now, like Black, they should all reflect that a remarkably honest, hardworking
jury in Chicago has restored faith in truth and in those who try to slay
monsters.
Conrad and Lady Black: Dancing on the Edge by Tom Bower is published by
HarperPress
