Conrad Black

by A Matter of Principle

  WHEN WE RETURNED TO TORONTO in August 2005, David Radler’s lawyer had just given formal notice of his settlement talks with the U.S. attorney. I still couldn’t believe Radler would take the plunge, though I was well familiar with his pessimism, and nervosity. He had shown in 1986 at Dominion Stores (a derelict Argus Corporation supermarket company) that he had no staying power. Even though he had certainly not created the mess there, and had, in fact, helped to resolve it, he scurried out to Vancouver, leaving Peter White and me, on one day’s notice, to clean it up. His nerves could not take the pressure.

  Having previously disparaged religion and occasionally expressed skepticism (though not in my presence; direct confrontations with me were not his métier) about my conversion to and practice of Roman Catholicism, he had become a Lubavitcher Jew. He had met the late Rabbi Schneerson in Brooklyn, the practising Lubavitcher leader. Radler shooed the press away from his office at times, claiming a prayer meeting was in progress, and told an interviewer that he considered the whole attack on us to be “Go for the Jewish guy.” This was an explanation that left my presence inexplicable in the public relations and litigious pogrom he claimed to detect, unless I was included because my wife is Jewish.

  We had known each other for thirty-six years. There was no denying Radler’s hard work and his success in putting together the hundreds of small newspapers we acquired in both Canada and the United States. We had sat together in Montreal delicatessens the way young men and small businessmen do, dreaming and planning what we could next achieve with our company. Perhaps I did detect the envy and small-mindedness at times that now oozed all over the pages of the Special Committee reports and tried to ease it, but I never suspected it was festering on this scale. I knew he often mocked my vocabulary, speeches, or writing as vanity and affectation, but I took this in stride, and often he professed to be an admirer. We knew little of each other really. I have no idea who any of his close friends are, and in the seventeen years of our marriage, Barbara and I dined with the Radlers as a foursome only once or twice when business found us in the same city. But to chop me up like this for the delectation of criminal prosecutors, to destroy me – could the envy have been so great? And envy of what? He was prominent in the Jewish circles he cared about. He had made himself quite prominent in Vancouver and to some degree in Chicago. He was a wealthy man. His children are high achievers, and his family is close. I wondered if my fears that he really was caught red-handed in crimes were justified (American Trucker,* Horizon Operations, the Vogt matter, Sun-Times circulation), and Valukas scripted him toward a deal with the prosecutors.

  His arrangement with the prosecutors would eliminate all complaints about the community newspapers, where he had seen his future, and which Breeden had set out to undo, and would trade a minimization of sentence for inculpation of the rest of us. He would prosper. The opprobrium of being branded a felon and a squealer and perjurer would not have been overly bothersome to him. This was a straight business decision, perhaps. But the David Radler with whom I had worked for most of our thirty-six years of association would not have entertained such a course. With his background as a Chicago U.S. attorney, Valukas would have convinced him of the tactical wisdom of this course. Even allowing for that, a great deal of Radler’s testimony to the Special Committee was inexcusably bilious. All Breeden had to do was turn on the spigot and a great sluice of mud and merde poured out.

  In his three sessions with the Special Committee, I was referred to sarcastically as “Crossharbour,” and every mistake Radler ever made was explained as “Crossharbour strikes again.” According to Radler, I was extravagant; overly interested in Napoleon (a subject I had not referred to five times in my entire acquaintance with him); and a poseur who knew little about business, other than having good connections and some knowledge of deal making. Radler had “built our EBITDA [earnings before interest, taxes, depreciation and amortization – that is, operating profit] to $400 million,” he told the Special Committee, as if none of the rest of us had had anything to do with it. He had played a vital role in taking over the Daily Telegraph by “encouraging” me to do it, as if any encouragement from him were necessary.

  There were also little outbursts of megalomania. Thus his statement, “You’ll have a hard time across the street if I am de-balled.” Across the street meant the Sun-Times, where his departure was greeted with stentorian glee, and where the escalators he had shut down because of their cost were restarted. Even before there were any suggestions of unapproved payments, he was urging Breeden, who, he conceded, now ran the company, not to emasculate him, for the sake of the morale of Sun-Times employees. The statement was both false and self-emasculating.

  “I know how to handle Hamas,” he had grandly stated when explaining to the committee the management aircraft policy relating to the avoidance of terrorist threats. Such insights would doubtless have been gratefully received by the prime minister of Israel and by the Palestinian Authority.

  All this material was released to us while I was in Europe, and when I read Radler’s comments on my return, it was obvious that he was cranking up to try to lay responsibility for perceived wrongdoing at my door, even though, at that point, the only wrongdoing there could have been was his.

  All that was clear apart from that was the inattentiveness of the legal staff, which Mark Kipnis allegedly tried to sidestep by complaining to the Special Committee that a few of the non-compete payments were “silly,” though Kipnis later volunteered that he had said nothing of the kind. Atkinson’s testimony to the Special Committee was especially feeble, as he glazed over his own responsibilities to assure that all legalities were exactly in place, in inter-corporate transactions and elsewhere. Jack Boultbee, who, though impenetrably enigmatic and monosyllabic, is a man of principle, calmly rebutted every one of Breeden’s and his chief attack dog Jonathan Rosenberg’s questions.

  A good deal more upsetting was the news that my son Jonathan, having located a hard lump on the top of his collarbone, had gone to an emergency room at a Toronto hospital and was told this needed further investigation. When I was advised of this by his mother, who was resigned to the leisurely timetable of Ontario socialized medicine, I managed to accelerate the timetable. Jonathan went promptly for a scan at Orchard Park, New York, at half the Canadian cost. He had Stage Two Hodgkins. This is distinctly treatable but a horrid setback just as he was starting to get his career going. Barbara asked if we had now been spared anything except the proverbial plagues of frogs and locusts. We were both full of admiration for Jonathan’s stoicism. He would come through the treatments with flying colours.

  AUGUST IN TORONTO IS ALWAYS PLEASANT, whatever the distractions. We enjoyed our property, with the soothing sound of fountains in the walled library garden, and watched the deer and foxes and less graceful wildlife (raccoons, groundhogs, and skunks) from our terrace in the early evening, often with a glass of fine white wine in hand. I was continuing intensive research on Richard Nixon.

  The massive and spurious Hollinger International case against us was getting to the point where discoveries were being demanded. The U.S. attorney’s office in Chicago had finally revealed in the spring that it was investigating, and it was assumed that if their investigation passed a certain point, they would demand a stay of civil proceedings.

  The fact that they had not, and that no suspect or target letter had been received, together with Brendan Sullivan’s and Greg Craig’s civilized interview with Robert Kent and Eric Sussman in June, had provided some hope that charges were not a foregone conclusion, even eventually. In response to Hollinger International’s insolent and belligerent demands for week-long depositions, I told Baker Botts to carpet-bomb the other side with such demands and to emphasize we would be questioning Richard Breeden for at least two weeks. This would smoke out the Justice Department. They would not want us revealing Breeden’s shallow allegations if they were planning to prosecute us on his story. I was not prepared to dangle on a string like a hooked trout,
awaiting the pleasure of the notoriously aggressive and devious U.S. prosecutors.

  However vulnerable my position, I was still ahead of the wolves financially, I still had excellent counsel, and I was, in fact, innocent. I had been horribly defamed but had so far, though by a narrow margin at times, managed an orderly retreat from the extremely overexposed position I had held when the onslaught against me began, in November 2003.

  However, the U.S. attorney soon demanded stays in all civil proceedings, which signalled imminent indictments. It also showed they would not bother with the niceties of suspect or target letters and implied they were getting what they thought would be effective evidence incriminating me from Radler. Unfortunately it shook loose my own counsel, as Greg Craig, while appearing in Chicago, told the press that it was not clear his firm would be acting for me in the event of a criminal trial. Brendan Sullivan’s evaluation was of my credit, not my case, but I needed strong counsel to make my case.

  I made extensive summaries of all the evidence given to the Special Committee and was able to anticipate some of Radler’s inculpations. I felt that Radler was going to have to engage in a version that would be vulnerable under cross-examination. All our colleagues would side with me; there would be no corroborative evidence. And Radler, uncertain and inarticulate even when telling the truth, could be easily disembowelled under heavy and skillful questioning.

  It turned out that Radler’s telephoned wedding anniversary greetings to us in London, on July 21, 2005, were the last contact I would have with him. It was shortly after this that his counsel had told us that they “were no longer pursuing the same objective” we were but were happy to continue in the joint defence agreement otherwise. The suggestion was extraordinary. Their participation in the joint defence group – an arrangement that has lawyers pooling information – had continued for some fifteen months while Radler and his lawyers played footsie with the prosecution. Surely that was a stretch of time that long surpassed the decency guidelines, even of the U.S. Bar. They had doubtlessly been relaying the thoughts of co-defendants’ counsel to the prosecutors. I had been bankrolling a data collection system, since one of the major burdens in the case was the hundreds of thousands of documents that were now “evidence,” and Radler had been getting a free ride on this. He also had the benefit of knowing some of the exculpatory evidence we had turned up. We expelled his counsel from the group.

  On August 18, to put it in in Rooseveltese, “The hand that had for so long held the dagger, struck it into the back of its neighbor.” Dan Colson and Williams & Connolly both called to say that indictments were about to be handed down by the grand jury in Chicago. Lynda Schuler, Brendan Sullivan’s understudy, called back a few minutes later to say that Radler, Mark Kipnis, and Ravelston had been indicted on seven counts of fraud and that Radler would plead guilty to at least one of the charges and would be a cooperating witness.

  At the customary press conference at which American prosecutors announce important indictments and try to conclude the first phase of the media pre-trial with a mass conviction and maximum sentence of public prejudice, the U.S. attorney, Patrick Fitzgerald, a notorious headline-seeking zealot, had two charts showing the “scheme.” As the New York Times wrote, “Lord Black was clearly identified on the top of one chart.” On the other chart was only the word “chairman.” Fitzgerald said: “I’m not going to say who the chairman was but you can check the public record.” Not since Groucho Marx used to ask guests on his quiz show, “Who’s buried in Grant’s tomb?” has there been a less challenging public guessing game. Fitzgerald continued: “The investing public has the right to expect that officers and directors of publicly traded companies are managing, not stealing the shareholders’ money. The insiders at Hollinger made it their job to steal and conceal. This was a systematic fraud on the shareholders.”

  There was a scheme, but Breeden was the author of it. And to a degree, Fitzgerald, having been convinced by Breeden, was a victim of the real scheme too, as he was now formally throwing the authority of the U.S. Justice Department behind it. Sullivan and Craig had confirmed in their visit to Kent in the spring that the Breeden Report was all that Kent and Sussman knew of the case. Breeden had gone to the highest level of escalation and Fitzgerald had committed to convict on what he must have had some idea was very thin, and in fact, no, evidence. It was unnerving, but I was buoyed by the knowledge that every word and every letter of every word of Fitzgerald’s harangue were false. The spectacle of this mindless urge to lynch, to mock justice and due process, recklessly to deploy the power and credibility of the government to a flawed arraignment, and to destroy the innocent (Mark Kipnis is one of the least criminal personalities in the United States), would have been more shocking if I had not already been so well prepared for it. Breeden and I both knew how great was the risk he had just teased and tempted Fitzgerald into taking. And on the day, Radler was the ostensible winner, because he was the criminal and he had scurried out with a six month camping holiday courtesy of her Majesty the Queen in exchange for a story that I did not think could possibly hold under serious cross-examination. Cripsin’s day, the day of judgment, was in sight at last.

  Kipnis had received no target letter and only sixteen hours’ notice of the charges against him. His counsel had flown from New York to Chicago to try to reason with the U.S. attorney’s office. My colleagues who had tried to fly under the radar were almost bound to be disappointed. While Kipnis had come in for settlement talks and had done his best to satisfy the prosecutors, he had, unlike Radler, committed no crimes and told no lies. Mark Kipnis was innocent, inoffensive, and utterly honest. He had not received a penny from either the non-competes or the management fees. The sole motivation the prosecution could offer at the trial for his participation in what they called the great “scheme” was the absurd formula that he wanted to be the next Peter Atkinson. I think that, since he had nothing to offer in the conviction of me, Kipnis must have been indicted as punishment for refusing to cooperate, and in the hopes that he could still be terrorized into rolling over.

  As mentioned, Atkinson had started sending back his money from the contested non-competition payments even before I was made aware in November 2003 that there was any doubt about the approval of them. While the rest of us were carefully dismembered from all Hollinger associations, he had continued work for Hollinger International for $30,000 per month for about eighteen months, firing the company pilots and aircrews, on Paris’s orders. Atkinson negotiated lengthily with Chicago prosecutor Eric Sussman, and Atkinson’s counsel, Benito Romano, former U.S. attorney in New York, cold-shouldered Greg Craig. But these gestures had all proved futile.

  Atkinson was not prepared to engage in pure invention, though he came close with his self-serving pieties about trying to curb the airplane use and reduce expenses. In fact, he had a mandate from me to produce drastic reductions in aircraft expenses but failed to do anything. Too conscientious not to recognize his own responsibility, too priggish to face up to it altogether, too frightened to fight it out from the start, he was doomed to a sad fate: seeking mercy through contrition, then vindication in court when cornered, and then pity when he declared himself “a broken man” and adopted a policy of total and righteous submission. He snapped like matchwood in the first forty-eight hours of Breeden’s takeover.

  Atkinson is a proud and honourable lawyer. His life was the judges and senior lawyers in Toronto, where he had earned respect, and he was not going to plead to anything he had not done, or that would compromise his professional standing. He was defeated but proud and fundamentally honest, and in the end preferred to fight than lie. He was not a bad man, but no one could mistake him for a strong man.

  The discussions between the prosecutors and Kipnis and Atkinson were dialogues of the deaf. The prosecutors did not understand a mentality that they could not intimidate, regardless of the facts, into pleading guilty and inculpating others, as the plea bargain system requires. And Atkinson and Kipnis could not underst
and a system uninterested in the truth.

  Those talks collapsed, and because the prosecutors did not want to leave me with the option of blaming the alleged wrongdoing on the companies’ lawyers (whose negligence had, in fact, been responsible for what Radler’s own misconduct had not wrought), they determined to indict them too. It must be emphasized that these lawyers were men of principle in the end. Kipnis, especially, the mouse under the paw of the prosecution cat in Chicago, was a brave man. Jack Boultbee was a star throughout.

  IN SEPTEMBER 2009, THE U.S. attorney’s office in Chicago released their sentence recommendation on Radler, made two years before to the trial judge. It detailed Radler’s very extensive co-operation, beginning in April 2004, a month after the Strine debacle, going through ten all-day meetings, the handing over of reams of documents, while he continued in our defence group for sixteen months, presumably transmitting information to the prosecutor. (There were endless threats from Eddie Greenspan to take this sleazy practice to some authority concerned with barristerial ethics, but, as is almost always the case in the legal fraternity, where in the end almost all lawyers hold hands to protect their guild, nothing came of it.) After his co-operation was confirmed in November 2004, there were “numerous” more meetings, all through our privatization efforts, when he professed to be fully on board with us (which makes Breeden’s easy roll-over of the OSC more understandable). After his plea bargain was announced in August 2005, the “numerous” meetings multiplied and continued through and after the trial. The government explained to the judge that it might not have been able to charge me at all without the co-operation of Radler. He apparently held himself out as an expert in all manner of matters of which, in fact, he was completely ignorant, and that were, in any case, innocuous, such as the workings of some private companies of mine. His imagination was clearly in a prolonged state of overdrive as he garrulously babbled on for the delectation of the Torquemadas for whom he had degraded himself, and who had bemusedly enslaved him. He advised on sales and other transactions in Canada to assist the U.S. prosecutors in urging tax liens and assessments on me by Canada Revenue, and purported to identify “attempted stock manipulation” by me, in concert with Brascan Corporation, years before. This was completely false. Some of the annoyances produced by the Canada Revenue Agency and their resolution have been referred to. They provided Sussman with his ammunition in badgering Canada Revenue to charge me, which it would have loved to do (it has audited me dozens of times in the envious Canadian official manner), but unlike American practice, the agency was not prepared to charge in the absence of any evidence.