Conrad Black

by A Matter of Principle

  Count 13 was for obstruction of justice against me alone, for the removal of the thirteen boxes from my old office in Toronto on May 20, 2005. To convict, the jury had to conclude that I had “corruptly removed” documents for the purpose of impairing a U.S. proceeding, either the grand jury, the SEC, or the criminal case. I had Gordon Walker and Justice Campbell to thank for handing this fatuous charge to Sussman. Our witnesses had shown that I had no idea the SEC wanted anything more, after I had fully complied with five of its subpoenas and produced 124,000 pages of documents. It occurred a month before Brendan Sullivan told me they were a “thousand miles away” from laying a charge. It was clear from the evidence that I had had no knowledge of the contents of the boxes, nor anything to do with selecting their contents. There was no evidence that the boxes contained anything relevant to the case that the SEC did not already have, or that I had altered or even examined any of the boxes in the few days I had them. (I had not.) The judge emphasized that no Canadian proceeding was relevant to this case, but Sussman kept repeating that I had violated a Canadian court order. I did not and have never been accused of doing so. The government was caught red-handed, lying that I had furtively entered the building after hours in the dark and removed the boxes when the building was deserted. The colour film the government introduced (which Kelly had not shown to Justice Campbell in Toronto) showed that it was a bright afternoon, that I had arrived at 3:30 p.m., and that the parking lot was full of cars.

  It was at least discernible in the evidence, though not as clearly as it should have been that I had cleared it with the acting president of the company, Don Vale, before I touched the boxes. Vale would happily have testified to this if Sussman had not threatened unspecified action against him if he even entered the United States. It could also have been found in the evidence that I could easily have destroyed or removed in a briefcase any documents in my office. There was absolutely no evidence to support this fantastic charge. Apart from being a deliberate and malicious fiction, it was, as Mark Steyn wrote, a “most shameless jurisdictional overreach.”

  Count 14 charged me only, with violation of the Racketeer Influenced and Corrupt Organizations Act. This was a statute passed as part of legislation against organized crime in 1970, and it alleged that our company had been a criminal enterprise since 1998.

  This charge had been thrown out in the civil case and was so outrageous I had trouble taking it seriously too. Julie Ruder had explained chummily to the court that racketeering “isn’t Al Capone and organized crime. It’s nothing like that, okay? … Racketeering is a group of people working towards a common purpose and they do that through a pattern of criminal activity and the group of people we’re talking about here is Mr. Black, Boultbee, Atkinson, Kipnis and Ravelston.” She did not explain why only one of the group, I, was charged with racketeering. Mark Steyn pointed out that Al Capone was a gangster convicted of tax evasion, and I was accused of being a gangster for licitly trying to reduce my taxes in a foreign country.

  Counts 15 and 16 were tax fraud charges against all of us except Atkinson, for filing a false corporate income tax return in 1999, and against all four of us for doing so in 2000. The charges were based on the theory that we knew the non-compete payments were fraudulent. Even if the non-compete payments had been something else, they were still tax-deductible and we had not deprived the Internal Revenue Service of a cent. The idea that any of us had falsified a tax return was absurd.

  The prosecutors had claimed as one of the instances of fraud that I had conspired to evade Canadian taxes with false non-compete payments. The Canada Revenue Agency has never claimed that, and the separate count making this charge was dropped early on, as even Sussman realized that it wasn’t his place to usurp the position of the Canadian tax collector. The earlier charge of money-laundering was dropped in mid-trial, as even Sussman acknowledged (surprisingly, as the same could be said equally of the rest of the courts).

  None of the counts, against any of the defendants, had the slightest merit, and if the jury took the judge’s caution to have proof beyond “a reasonable doubt” seriously, justice would be done. The prosecution had only raised a reasonable doubt of the probity of our conduct in one or two counts, and the defence had laid the doubt to rest. It was clear to much of the press and most qualified legal observers that this should never have been a criminal case and that there was no believable evidence at all of misconduct by any of the defendants – no victims (apart from ourselves), no crime, except by Radler, nothing.

  THE VAST PRESS CONTINGENT was like a pack of scavengers, hunting for scraps of news. Unfounded rumours swept like forest fires through their ragged ranks and were played in the British press as semi-authoritative hunches. On one sudden call to court, as we were changing units within our hotel and my socks had been packed, I went to court with my bare feet in my shoes, like many others there, men and women. This became a great news story. As I pushed through the cameramen toward the revolving door, a British photographer shouted an obscenity at me just as I entered the door. I gave him “the bird” in Trudeau manner, and this became a cause célèbre. One commentator proclaimed that as this was undoubtedly directed at the jury and the entire U.S. justice system, I was doomed. It was really one of the better-aimed barbs of the trial, possibly along with my references to the Toronto Star to Sussman and Cramer as Nazis.*

  On that day, July 10, the jury reported that they were unable to reach a verdict on one or more counts. We urged, through Safer, as agreed defence spokesperson, that they report what they had, but the judge sent them back to try to resolve matters. On July 11, we remained downtown all day, expecting the call at any moment. Nothing happened, and then silence on July 12. Greenspan had arranged press interviews for me, and I had written post-trial pieces for the Globe and Mail and the National Post, anticipating the end of the long nightmare.

  I wasn’t sleeping well. Barbara and I were both drained. I had a special telephone beside the bed. Only Genson’s office knew the number, and that was to be used only to call us to court. It rang at 10:00 a.m., July 13. Genson’s genial assistant, Nicki, said, “We have a verdict.” By a considerable feat of logistics, Barbara and Alana and I arrived at court at 10:25 a.m. A few minutes later the judge entered, then the jury. In that quaint way that still preserves the solemnity of the day, all rose for them. The jury had not dressed up for the occasion. The foreman, whom we identified from his questionnaire as a supervisor in the Chicago Department of Streets and Sanitation, as well as the owner of an insurance appraisal business with his wife and a real estate broker, seemed to us commercially knowledgeable, a member of the junior grade of the Daley political machine, and unlikely to be an unusually puritanical person. Rumours abounded that he was going to produce some guilty verdicts in exchange for Fitzgerald’s getting off the mayor’s back, and some preferments for himself. After the trial, someone known to one of our allies engaged the jury foreman as a valuator, took him out for a few drinks, and elicited his confirmation that the fix was in from City Hall. St. Eve determined that the source was not sufficiently believable to take it further. The source perhaps was not, but the allegation was.

  The foreman gave the judge the verdict sheets. She started with me as principal defendant. “United States of America vs. Conrad Black. First count: Guilty.” I sighed and braced myself for a sand-bag job. It didn’t happen. I won nine of the counts and lost four. All the rubbish about racketeering, looting, personal extravagance at the expense of the shareholders, Breeden’s and Rosenberg’s “$500 million kleptocracy” – all this had gone over the side. I went down on two counts to do with the so-called non-transaction with American Publishing (counts 6 and 7), which Radler had said throughout and right through the trial was the redesignation of unallocated management fees.

  Creasey had testified that he had not thought these were management fees, but acknowledged that he was “confused.” The jury had obviously not taken this on board. I lost on the one count of supplemental payments on Forum
and Paxton (count 1), but not the initial non-competition payments, and, incredibly, I was convicted of obstruction of justice on the asinine box affair (count 13). On Forum and Paxton, the only evidence was Radler’s (false and uncorroborated) claim that I had asked if there were any non-compete payments to come from those deals, and that when he phoned back with a proposed division of the $600,000 he claimed was available and had been approved by the Audit Committee, I agreed with him. Even if his testimony had been truthful, it wasn’t incriminating.

  Because we won all the counts related to real transactions, and all the prosecution’s drivel about a “scheme” had been rejected by the jury, it was clear that honest services was the problem, and in most U.S. circuits we would have been acquitted. The others were convicted on the same counts I was, except for obstruction.

  The jury implicitly declared that Burt, Kravis, Thompson, Radler, and Healy had failed to tell the truth. The main non-competes were deemed to have been approved by the Audit Committee, and the Park Avenue apartment, Bora Bora, and birthday dinner as well as the IRS and SEC filings and racketeering counts were also thrown out.

  Judge St. Eve had them well rehearsed. They all stood promptly and said, “Yes,” apparently understanding that that meant they were convinced beyond a reasonable doubt that we were all guilty of crimes and must go to prison. The jurors actually looked slightly impressive, standing up like synchronized pistons proclaiming their adherence to the verdicts.

  There was no evidence of wrongdoing in respect of any of the counts that yielded convictions. It all came down to St. Eve’s instruction on honest services. The jurors appeared to have been distracted by the endless false allegations that I had violated a Canadian court order. (Later, one of the narcoleptics revealed in an interview that she had woken up for the tape’s screening. “You could see him doing wrong right there on the film,” she was quoted as saying. Another told the press that even though she thought I might not have intended to do wrong, I had.) It was clear that some jurors didn’t think there was proof beyond a reasonable doubt and that the jury had ignored the judge’s instruction to avoid trade-offs. One of the jurors who had ignored the judge’s instruction to avoid media coverage of the case, had come frothing into the jury room one day saying that the media thought they were incapable of reaching a decision, so they must reach one. The three women who had been defending us agreed to convict on four counts, and the militant majority agreed to acquit on the rest, and they went on their summer holidays. In this system, and given the ferocity and force of our tormentors, we could have done worse.

  I felt that given the four-year assault on me, I had almost won the financial battle; Barbara was prosperous and unassailable, and the much-touted attack on her never occurred; and I had defeated the effort to send me to prison for life. Whatever happened on appeal, the absolute worst prediction was about five years served, and sentencing counsel assured me that we could do a lot better than that. Though I tended to discount anything optimistic from any lawyer, indeed almost anything of any tenor from counsel, there was a ring of plausibility to this.

  Sussman again asked that my bail be revoked and that I be imprisoned at once. There were eight marshals at the door of the court, ready to take us all into custody, but the others were all released under existing arrangements, and Boultbee returned at once to Canada. Judge St. Eve declined to imprison me but said I must remain in the Chicago area, and scheduled a further hearing for July 19.

  The initial reaction of Fitzgerald and his underlings was not one of great celebration. Needless to say, Greenspan proclaimed to me a great victory and said he would tell the press that it was a “devastating defeat for the government,” by which he meant a glorious victory for him. Since he knew nothing about the U.S. appeal process and his client was facing a prison sentence, I suggested that he not strain credulity to that extent. He and I agreed a statement expressing satisfaction that we had got rid of the allegations of racketeering, looting, and personal extravagance at the shareholders’ expense, and that the “$500 million kleptocracy” was down to $2.9 million of payments, which had, in fact, been approved and disclosed, and that we would appeal the convictions. Barbara, Alana, and I left through the back of the building, avoiding most of the press, and left Greenspan in his happy role of talking to the press, who were out in jubilating numbers.

  My sober reaction was disappointment, but if the jury was prepared to convict even Kipnis, it implies that they were determined to give something to the government, and even better counsel might not have achieved complete victory for us. Safer had been brilliant, and Kipnis had not profited from the contested payments and was defended by Radler, but he had lost as badly as Boultbee and Atkinson, while I had won three-quarters of the charges the government started with, and 90 per cent in terms of potential financial downside.

  Once again, Providence had rescued me from the abyss, but left me still in the coils of severe adversity. My enemies would not impoverish my family or imprison me for life, and we still had a chance at acquittal, or at least a reduction to a Martha Stewart-gotcha offence. I thought I had defeated the attempt to brand me as an outright crook who had robbed the company of huge sums of money. I wasn’t especially afraid of prison, but there was no gainsaying that time out of my life spent there would be horribly inconvenient. After four years, it was possible to wonder when the war would end. Even if I stayed out on bail, it was no better than a fifty-fifty chance to win the appeal on all counts, and that might defer matters for up to another eighteen months.

  I was not giving up on the appeal to the trial judge, much less the appeal judges, and sentencing counsel was hopeful we could get the sentence down to the point where the judge had to grant an appeal bond. I took Alex Bourelly’s advice and met with lawyers from Mayer Brown et al., a famous appellate firm. They looked like the quality of counsel I could not afford at the start of the trial, after Sussman seized the proceeds of the New York sale, which he would now have to relinquish.

  I also spoke to Alan Dershowitz, and met with him a few days later when he came to Chicago. I retained Marc Martin, who has a good record on appeal, and provided continuity, a Chicago presence, and procedural expertise. I was pedalling away from the Eddies. Mark Steyn produced a fierce diatribe against them in Maclean’s, highlighting their lifting of $2.2 million from me just as the trial was ending, to pad their retainers. It was the end of Greenspan’s mystique, other than in the eyes of his worshipful claque. I took no pleasure in this, but his evident depression at the first bad press of his life amplified my awareness of his vulnerable ego.

  An avalanche of messages came in, several hundred, all but two of them generously supportive. I laboured through the days following the verdict to reply to them all and to take the many telephone calls. The press in Canada was mixed; in the United States it was factual, except for a reversion to extreme antagonism in the Sun-Times and an uncharacteristically inane editorial in the Wall Street Journal (now a Murdoch newspaper). The British media were as abominable as could be imagined, though they continued to run favourable reviews of my Nixon book. It was now time for silent manoeuvring and skirmishing. The argument for injustice could be made by discerning observers. I declined all contact with the press, other than on the subject of my Nixon book.

  On July 19, I went to see the probation officer, Sheila Lally, a very pleasant and thoughtful woman, and had a good talk with her. She allegedly carried some weight with the judge. Barbara and Alana also spoke to her, and Jeffrey Steinback (sentencing counsel) told me, which I do not doubt, that they were both very persuasive.

  That afternoon, Greenspan, with the aid of David Roebuck, tried to explain to the judge the civil law of Canada. For either Barbara or me to provide more bail might be deemed a breach of the Confidential Settlement Agreement (which Greenspan kept calling the “Confidential Security Agreement” until the judge corrected him), which emerged after the Mareva fiasco in September 2006. Roebuck, never an expeditious speaker, taxed the patience a
nd the comprehension of the court with a very circumlocutory explanation, and he and Greenspan, bowing to the judge in the Canadian manner, seemed at times almost like a slapstick routine. She again rejected Sussman’s request for revocation of bail, and told me I could go to Palm Beach, but not to Canada. She professed to be concerned that if I went to Canada, I would fight extradition. “He’s not a flight risk,” she was fond of saying, “Mr. Black is a fight risk.” This appeared to be based on a case she had had in her time as a prosecutor when some wily Canadian had left her jurisdiction for Canada and had been very difficult to extradite for one of her trials. I did not believe she thought that I would fight extradition, as it would be insane. They had not rebutted at all Sussman’s repeated allegations of my untrustworthiness. Greenspan pronounced it “a good day,” meaning, I assumed that since he had done much of the talking, it must be a good day. It wasn’t. A new hearing was scheduled for August 1.

  It was starting to seem like the summer of 2006, where the judge just kept punting forward Sussman’s demands for revocation of bond and the forced sale of the Palm Beach house. The summer was slipping by. Almost everyone we knew had left Chicago, and we remained in our very comfortable hotel, but after more than four months, it was time to go.

  BACK TO COURT ON AUGUST 1, the crush of reporters, the judge, Greenspan, this time with George Glezos* and Stephen Green in tow from Toronto, civil and immigration counsel. (Every step involved more lawyers.) Voorheis on this day finally packed the Sun-Times board with Hollinger Inc. nominees, which he should have done as soon as he displaced Walker and Carroll. He put Hollinger Inc. into creditor protection, which made it too late to do anything with Hollinger International. And he sent to Chicago a Rent-an-Affiant, claiming he had reason to believe that I had stashed 40 million Euros in Gibraltar. George Jonas knew and had employed Voorheis’s affiant, an erratic and absurd Israeli named Aviv who had been branded “a liar” by a serious U.S. court and had offered the theory that a rogue unit of the CIA had blown up the Pan American 747 over Lockerbie, Scotland, in 1989, killing hundreds of Americans. (He had hatched this imaginative theory on behalf of the insurers of the aircraft. It didn’t fly well either.) His affidavit was a complete invention, and Greenspan opened with a very thorough demolition of Aviv. So much so that Sussman didn’t touch it; this one was too rank even for him, and the judge and most of the press ignored it. This was the customary response to unambiguous successes of ours: silence, as if it had not really happened.