From November 19, 2011:
Conrad Black: A Matter of Principle, the author’s attempt to redeem his name and reputation, goes well beyond that goal. It is an expose of a US justice system that coerces petty criminals into sometimes perjuring themselves in testimony against big fish like Black. It is a system that on a per-capita basis imprisons more of its people than any country in the world. It is also a system that only provides real justice to the tiny minority who can afford to spend limitless sums on lawyers.
The story, which is a treat to read given Black’s facility for stretching the English lexicon to its limits; begins with Lord Black in London, enjoying the life of a powerful press baron, hobnobbing with the rich and famous, and engaging in a furious price war with his rival Rupert Murdoch. Viewed in Canada as a powerful tycoon, Black reveals that even though his newspaper companies were mostly profitable, they nonetheless carried high levels of debt, which was a constant concern to him. Black admits that from the beginning, when he invested $500 in a tiny paper in Quebec, his newspaper purchases were highly leveraged. As the internet began to make inroads on the media scene, in 2000, Black foresaw the decline of newspapers. Even as he was setting up the National Post Black had determined to quietly start unloading underperforming print assets while there was still a market for them. He planned to invest the proceeds in more promising ventures while retaining control of his flagship enterprises such as the Telegraph in London and the National Post. It was the divestiture plan that led to his criminal charges. Black makes a plausible case for his innocence on all charges, in particular the charges that he received improper non-compete payments for the sale of some of his newspapers—payments, it was later charged, that should have been paid to his company, not himself. Black argues that when someone buys a newspaper, their first concern is to ensure that the previous owners do not turn around and start up a competing newspaper in the same market. In the case of Black’s company Hollinger, it was he and his partner David Radler who possessed the expertise necessary to start a newspaper venture and therefore the payments were made to them personally to not launch a competitive product. In any event, he argues, the sale of newspapers added hundreds of millions to the Hollinger common shareholders’ equity. Still, in 2003 a group of his shareholders, suspicious about high management fees and the non-compete payments, revolted against Black, and voted to establish a special committee to look into the company’s past transactions and the degree to which Black had personally benefitted from them. The committee hired Richard Breeden as a special counsel. Breeden had acted as an advisor in the aftermath of the meltdown of WorldCom and was regarded as a corporate governance zealot. Initially Black says he went along with the formation of the special audit committee because he was convinced he had done no wrong and hoped the exercise would clear the air. But soon it became clear that the audit committee under Breeden’s guidance had become prosecutorial. Very quickly Black’s control as Chairman eroded. Even his credit cards were taken away as was his company car. All of this was accompanied by a whispering campaign in the press that suggested Black was a crook, blocking Black’s efforts to refinance the company and buy out the shareholders who had hired Breeden. Ultimately Breeden released a 500 page report titled “A corporate Kelptocracy” that claimed Black and associates had used the company as a personal piggy bank. It was this report that ultimately led to the criminal charges and conviction.
The book is filled with interesting insights into the state of journalism as he saw it. His 1992 purchase of a 23% share in Southam , which then included the Hamilton Spectator brought him little satisfaction even though he increased its profits. “The newspapers,” he wrote, “were ruled by soft leftist editors who themselves were captives of soft leftist cadres of journalists. “ In the case of the Calgary Herald, “I suggested …that the oil and ranching capital of Canada…could do without a friendly socialist as editor, who daily debunked the wellsprings of Calgary’s prosperity.” The Ottawa citizen he described as “a shockingly inadequate newspaper for the capital of a G7 country.”
The book chronicles Black’s desperate attempts to raise cash to mount a defence. Between selling homes and some short term loans from old friends he proves to be quite nimble. In the midst of the criminal proceedings in Chicago, black sues Breeden, the author of his misfortune for libel—launching the case in Canada where libel is easier to prove. Breeden and associates ultimately settled with Black, paying him nearly $12 Million—an irony given that it was the Breeden report that put Black behind bars.
Black makes it clear that it was only his ability to raise money to hire battalions of lawyers that kept his fate from being worse. For the average slob, the U.S. Justice system “ is an evil system…which in practice as prosecutors win an implausible (and almost totalitarian) 95 percent of their cases, is less a due process than a demonstration of the force of gravity by the operation of a trapdoor when an accused is frog-marched onto it.”
While Black attacks his accusers and the US government with relish there is no note of self pity in the book. He is stoical about his incarceration and his re-incarceration which will end early in 2012. His accounts of prison life are often humerous and good-natured. In prison, the ever curious Black learns about crack cocaine, discovering that dealing in crack, which is favoured by African Americans is prosecuted 100 times more than powdered cocaine which is the drug of bourgeois whites. “ The country’s incarceration policy has the benefit…of removing almost a million unemployed African-Americans and half a million ethnically diverse correctional officers from the unemployment statistics.” He also picks up prison lingo which he demonstrates somewhat startlingly in the latter chapters of the book.
In A matter of Principle Conrad Black firmly puts to rest any notions that he is a pampered aristocrat. He faced personal and financial ruin with courage and ingenuity. In the end although he viewed it as unjust, he took his punishment with dignity and made himself useful tutoring fellow inmates in English, writing, losing weight and learning to play the piano. It will be fascinating to see what the next chapter of his life will be when he is released.
December 23, 2011
Bay Observer