by Tom Bower
Maxwell had no doubt that Steinberg was outwitted. In March he had strengthened his control over PPI by changing its certificate of incorporation. The British company would no longer be able to prevent Maxwell stripping PPI of its assets and could not even force PPI to repay its debts of nearly £1 million. To prove his point, Maxwell had sold Vieweg, a printing company in Brunswick, West Germany, which was wholly owned by PPI, for £400,000. The transaction perfectly symbolised Maxwell's control.
Throughout December and early January, all the actors in the drama frantically and wearily negotiated the terms of possible bids. In the background was Coutts's reminder that the whole board would resign and Pergamon be made bankrupt if the Americans did not make a final decision by the end of January. Six months earlier, Leasco had valued the company at 10p a share. Maxwell therefore lowered his bid to lip a share and promised that, if successful, he would commit all the shares to an independent voting trust for two years. Cynics noted that four years earlier Maxwell and his advisers had suggested that Pergamon shares were worth 185p each. By 20 January, Steinberg conceded that he would not take the risk. Maxwell had won back his company. Steinberg sold his 38 per cent holding for 12p a share to Maxwell, receiving just over £600,000 in return for his original £9 million investment. Freeman, for the institutions, negotiated the same deal. Maxwell was jubilant. For under £1 million, his new American company, Microforms International Marketing Corporation, owned 90 per cent of Pergamon. The sum was considerably less than his family trusts had received when they secretly sold their 600,000 shares in 1969. 'Even with your huge fees,' he laughingly told a lawyer, ‘I’ve come out of this with a big profit.' Not quite.
In New York, in February 1974, the Supreme Court considered Leasco's suits against Maxwell and Flemings for violations of the antifraud provisions of the securities and exchange legislation. The judges ruled that the New York courts did have jurisdiction over the case. The trial was set to start in July 1974. In May, Flemings intimated their willingness to settle and their lawyers began negotiating. Maurice Nessen, on Maxwell's behalf, made his approach soon after. Their joint capitulation was announced in the New York Times on 29 July under the headline 'Reliance Group Collect $6,250,000 from Robert Fleming Co Ltd and Maxwell Family in Pergamon Fraud Settlement'. The details were never revealed but it is believed that Maxwell paid $5 million and the bank paid $1.5 million in instalments. By then, Maxwell had purchased the remaining 10 per cent of Pergamon shares and was set to rebuild the company's fortunes beyond the public's gaze and the City's control. Three year later, the Director of Public Prosecutions announced that criminal charges were no longer under consideration. The DPP's decision would pass unnoticed. By 1974, many other British politicians had been exposed for their murky dealings with the world of secondary banks, building corporations and company perks. Duncan Sandys, John Stonehouse, Reginald Maudling, Jeremy Thorpe and Edward Du Cann were all former ministers or privy councillors who were involved in business controversies. Even Edward Heath and one of his own ministers had enjoyed a close connection with a famous falling star called Jim Slater. None of them had attracted the opprobrium attached to Maxwell's complex affair and, among his colleagues in the parliamentary Labour Party, many had become very dubious about the provenance of the stigma which he had attracted.
Labour politicians are unique in criticising capitalism while not really understanding the sophisticated banking, broking and market mechanisms upon which the system relies. Those furthest to the left, whose distrust of capitalism is greatest, know the least about business and finance. In the Commons, Maxwell's millions had lost him a lot of sympathy but he had won grudging respect, possibly even envy, for understanding the system. Amid that mixture of ignorance and jealousy, the overwhelming view in the Labour ranks about the DTI reports was that 'they' had come down deliberately hard on a Labour supporter. 'He was set up by the Tories,' was a common sentiment among the party's hierarchy who vaguely recalled the report's damning conclusion and believed that the treatment of Maxwell had been exceptionally harsh whatever the reasons. Merlyn Rees, who does not believe that Maxwell was more than a man 'who tried to cut corners', probably represents the views of most. 'The DTI reports', he says, 'did not convince me that he was dishonest.' Michael Foot, the left-winger, agrees: ‘I was suspicious of the reports.' For his friends like Tam Dalyell, 'It was all very complicated.' None, it must be said, had actually read the three volumes or probably even cared to understand the details. By January 1974, it had also become totally unimportant.
Maxwell's resumption of control over Pergamon was as dramatic as his removal, although there were few eyewitnesses. Three weeks after his bid had been accepted, Coutts was chairing a regular board meeting in Oxford. Suddenly the board-room doors burst open and Maxwell marched in with Elisabeth Maxwell, Tom Clark and other supporters running close behind. 'Right, we're taking over now,' said Maxwell with a grin. 'You can all go.' Coutts was startled: 'I quickly picked up a few personal things and left. I didn't remember him saying thank-you or even goodbye. I was just glad to go.'
After recovering his business, the next goal was to return to Parliament. Edward Heath's government had been flawed by U-turns in policy, an economic boom fuelled by property speculation and major industrial bankruptcies. In the midst of the 1973/4 winter, Heath and the miners declared war against each other and Britain became gradually paralysed when the government restricted industry to a three-day week. In February, the Prime Minister appealed to the electorate for support against the unions, confident of success. But after the first week of the election campaign, the government's support began drifting away. In a marginal constituency, Maxwell had grounds for optimism.
Election to Parliament and ministerial office had always been foremost in Maxwell's ambitions but in 1974 his bid was especially important. The repeated defeats he had suffered in the courts about the DTI reports would become so much history if his fifth appeal to the electorate were successful. Buckinghamshire's positive verdict would embarrass the Establishment and give him an impregnable platform from which to wreak his revenge. The realisation of his hopes depended much upon Bryan Barnard, his former agent and admirer who had returned to organise Labour's dispirited supporters. 'It was worse than in 1959. There were no records, no canvass returns and we had the troubles in Wolverton,' Barnard recalls. 'But Bob was very optimistic and I thought in the circumstances of Heath's disasters that we had a good chance.'
In normal circumstances, Maxwell would have expected support for his campaign from the party leadership. His constituency was, as always, an obvious target if Labour was to win a majority and even fleeting visits of national politicians would at least arouse enthusiasm among the party workers. In the event, only James Callaghan passed through. Others are still too wily to explain their absence. Maxwell therefore fought a solitary campaign, ignored even by the national media, which, had he been a lesser man not engulfed by passion and energy, he might have noticed.
Glimpses of the red Land Rover charging through Buckinghamshire's villages preceded by the familiar booming voice were soon reported in the local press. Maxwell on the campaign trail, appealing for support from the fold, was as always an impressive sight. The reception he won was polite, but also mixed. In the rural areas, the sensational rows and inquiries of the past five years had made slight impact on farmhands and villagers. Maxwell had been a warm friend to them and he quickly recovered any lost ground. 'The reception was,' says Barnard, '"Poor old Bob, he's had a rough deal." They couldn't understand what the fuss was all about.' But in the towns he encountered a different reception. The rows had left an irreconcilable gulf. 'We were let down by Wolverton,' recalls Barnard, 'where some people just refused to work for us.' In Milton Keynes and Newport
Pagnell it was worse. Not only did the anti-Maxwell faction withhold their help, but in the absence of a party organisation the undecided voters, especially among the newcomers, had not been pinpointed. As Barnard ruefully admits, 'Bob's troubles di
dn't help us among those people and the Tories were well organised.' But Maxwell enjoyed two major advantages. In the reorganisation of the electoral boundaries, a solid Tory ward had been relocated to a neighbouring constituency, and in the election itself there was an 0.8 per cent swing to Labour which allowed Harold Wilson to form a minority government. Labour won fourteen new seats, but Maxwell's was not among them.
The Tory candidate in Buckinghamshire did not so much win the election with his 3,123 majority, the biggest since 1945; rather it was lost against the national trend by Labour. The votes which Maxwell could have expected were won by the Liberals. The recriminations were inevitable and predictable. A certain Labour gain was lost, said many party stalwarts, because of the candidate. There was the familiar sheen over Maxwell's eyes as the accusations were made in the streets but he had no intention of surrendering. There were no comforts other than the expectation of another election within months to capitalise on the disarray in the Tory ranks. With a little time, his organisation would improve and he would benefit from any national swing to Labour. Barnard and Cassidy were urged to hold the selection conference rapidly. In April, one hundred delegates crowded into the Labour club for an acrimonious four-hour meeting. They emerged with the same candidate, who had little chance and showed less willingness to heal the divisions. Instead, Maxwell publicly attacked Atter and his working-class critics, making it harder to persuade them to work for his re-election.
By the second election in October 1974, Barnard's hopes were limited. His candidate had become lacklustre and the historic trend of the Home Counties in turning away from Labour had already begun. The second defeat was particularly painful because, while Maxwell's personal vote barely improved, the Labour Party won an overall majority. Barnard watched his candidate 'collapse emotionally' when he was declared a loser for the fourth time. 'He'd done his best and failed. He was ill for days afterwards.' In their post-mortem, Maxwell finally admitted to his agent that Pergamon and the rows with his opponents had cost him the election. 'He looked like a beaten man,' recalls Barnard. When Maxwell emerged six days later from the shock, he announced that he would not stand for election in the constituency again. But his appetite for power and influence had not diminished.
After twenty years in the power game, his opportunities seemed exhausted. (Two later attempts to win nominations for Labour seats in fact failed.) Politically he was discredited and his commercial obituary was, it seemed, already written. As his friend the financial journalist William Davis said, 'You don't get many second chances from the City. In order to succeed on the scale that he did before, you need millions. And you need the goodwill of the big institutions, and somehow I doubt if he'll ever get there again.' Philip Okill, the encyclopaedia salesman, knew differently. In 1973 he said, 'I think that Mr Maxwell will attempt to climb up the slippery pole as long as he's alive. Because he's that type of man. For tenacity of purpose, for determination, one can only admire him. It's the methods he uses that a lot of us don't like.' Okill's perception was correct. Maxwell was set on a permanent resurrection which would, if successful, rank with Lazarus'. At that time his only concession to any fault was: 'I was a bit too sure of myself and accused of trying a bit too hard, which is a characteristic the British Establishment didn't like. I should have been less brash and more tolerant of others than I have been. I have undoubtedly made many mistakes and certainly accept part of the blame for the difficulties that the company got into.' But, he added, 'I was not guilty of any misdemeanour. I had done nothing to be ashamed of.' Few believed him when he claimed that his future was 'very bright': no one could imagine a route out of the wilderness.
12
An unsolicited telephone call in April 1975 offered Maxwell the serious opportunity he sought for his rehabilitation. Two Scottish newspaper printers, Nathan Goldberg and Charlie Armstrong, were trawling through the rich of London to find a saviour for their jobs in Glasgow. Both were former employees of the Scottish Daily Express, which Beaverbrook Newspapers had closed a year earlier to stem the company's financial haemorrhage. The two printers explained to Maxwell that about five hundred of the redundant workers had established an Action Committee which hoped to buy from Beaverbrook the site on Albion Street where the Express had been printed and establish a workers' cooperative to produce a new newspaper called the Scottish Daily News. To their surprise, Maxwell, with the best of intentions, invited them to come immediately to Fitzroy Square.
Maxwell in the flesh is always impressive but for the two Scotsmen, who were unemployed and desperate, he personified a divine omen. In their presence he telephoned Sir Hugh Fraser, the owner of Glasgow's competitor newspaper, and spoke jocularly in the shorthand most mortals only witness on glossy television dramas: 'Let's take it away from this boy-scout outfit and give it a bit of credibility, give the boys a break.' After a few calculations, Maxwell told his incredulous visitors that he would contribute fifty pence for every pound invested by the workers up to a limit of £100,000. Maxwell did not disguise his motives as pure philanthropy. Under Tony Benn's aegis, workers' co-operatives had become synonymous with the socialist cause and the regeneration of British industry, and Maxwell could hope to win prestige in the party by aiding the venture.
The two printers returned to Glasgow euphoric. To have found someone who pledged support for a cause which invariably attracted cynical disdain was a success. To have ensnared Maxwell seemed particularly fortunate since he was a socialist. Others would see his offer as a characteristically flamboyant gesture which could be withdrawn later, similar to his abortive bid to save Aston Martin. But this venture had a particular attraction - it was a newspaper which he had twice failed to buy. The imponderable is whether he understood that a co-operative was a transient political opportunity and not a business proposition.
In its heyday, the Scottish Daily Express had become synonymous with the most outrageous excesses of Fleet Street -an extravagant style of tabloid journalism which thrived upon exorbitant expense claims and incredible overmanning among both the printers and the journalists. Beaverbrook's willing indulgence was reflected in the wildly misconceived redundancy programme which had encouraged the most productive employees to leave at the highest rates only to require others to be hired as replacements. It was a madhouse with inevitable consequences. By 1974, Albion Street represented a legend with a falling circulation, an awesome reputation for industrial strife and a series of unsuccessful editors. The employees were nevertheless shocked when Beaverbrook finally declared that the salad days were oyer. Amid scenes of emotion, on 28 March 1974, the last edition appeared and 1,800 employees were unemployed. By then a caucus had formed who were committed to the political ideal of a newspaper owned and managed by the employees. With the support of Beaverbrook and Benn, the workers had one year in which to find £2.5 million to purchase the site on Albion Street and have sufficient working capital.
The inspiration and leader of the Action Committee was Allister Mackie, a forty-four-year-old compositor who enjoyed a reputation in his local community as a responsible politician, wily trade unionist and justice of the peace. Those who supported Mackie and awaited the realisation of the Scottish Daily News were not the best and the brightest of the old Express. Generally, they were a mixture of idealists and those who had been unable to find alternative jobs. Among the best were the printers whose talents were becoming redundant with the introduction of new technology, while the least able were the journalists who lacked either the talent or the initiative to move elsewhere.
Maxwell recognised all those weaknesses and especially their ignorance of financial management. Soon after his introduction, he advised Mackie that he should seek the services of a professor of accountancy, Richard Briston. In September 1973, Briston, on his own initiative, had written an article in Accountancy magazine suggesting that Maxwell had been unfairly victimised by the DTI inspectors. The two later met for a pleasant and non-committal encounter which was followed by an urgent summons by Maxwell for the
academic to undertake a critical analysis of the second DTI report. After an exhaustive session - ‘It was a lot of work and he wanted it yesterday,' says Briston - the accountant delivered his critique personally to Maxwell at the Blackpool party conference. 'After reading it,' recalls Briston, 'his mood changed completely. He started shouting, "This isn't what I wanted!" and became very rude. He had expected me to defend him on every count and that wasn't possible.' Briston's fee of one thousand pounds remained, despite repeated reminders, unpaid and was effectively written off when Maxwell telephoned from Glasgow and suggested that Briston come immediately to Glasgow to advise the Action Committee, who were 'financially naive', about their negotiations with the government and Beaverbrook Newspapers. Briston undertook the task 'because I thought it was worthwhile, but not for Maxwell'.
Professor Briston quickly achieved results. Beaverbrook reduced the price for Albion Street from £2.4 million to £1.6 million and also agreed to a £725,000 loan to the co-operative. The source of most of the money, £1.2 million, was to be the DTI's industrial Development Unit, which under Tony Benn's initiative was championing workers' co-operatives throughout the country. But Briston discovered that, despite the political directive, Benn's civil servants were reluctant to hand over the money. 'They didn't hide their scepticism about Benn's policies or about the newspaper's chances of success,' says Briston, who was handicapped by a pessimistic feasibility survey produced by a team of management consultants. 'The civil servants', he says, 'set impossible terms which they hoped the workers couldn't meet.' Those 'impossible terms' included the stipulation that part of the finance had to be raised from other sources besides Beaverbrook Newspapers. The casualty of that condition, Briston claims, was a secret agreement he negotiated with Jocelyn Stevens, Beaverbrook's managing director, that the latter would loan to the co-operative whatever amount was still outstanding after they had tried every other source. 'Our deal meant', says Briston, 'that the workers would never have needed Maxwell. Unfortunately, the DTI was tipped off about our arrangement.' The alternative sources of finance were limited.
