Black Justified Charging Hollinger for Chef, Chauffeur

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Prosecutors at media mogul Conrad Black’s fraud trial tried to use his own words against him Wednesday, reading jurors portions of a letter in which he justified billing his companies for a personal chef and chauffeur and scoffed at taking “vows of poverty” for shareholders.

“We have a certain style that all these shareholders were well aware of when they came in,” Black wrote in the September 2002 letter to executives of his Hollinger media empire. “We should fine tune that style, not revolutionize it with a Damascene conversion to vows of poverty.”

A lawyer for Black moved for a mistrial, arguing the letter would prejudice the jury, but U.S. District Judge Amy J. St. Eve denied his motion.

Black wrote that he ran all of his companies in a tradition “where the controlling shareholders take reasonable steps to ensure their comfortable enjoyment of the position they (we, in fact), created for themselves.”

He said growing concerns among shareholders about heavy spending by executives should not “force us into a hair shirt, the corporate equivalent of sackcloth and ashes.”

“It is perfectly justifiable, given the extent to which my London house is used for legitimate corporate entertainment, some of it quite productive at times, for half of the cost of my chef and about 28 percent of the compensation received by two people who receive visitors and serve meals in that house, to be borne corporately,” he said.

He said using chauffeurs “is a well settled practice.”

Black, 62, is charged with swindling Hollinger International Inc., a major newspaper holding company, out of $84 million, mainly by selling assets and receiving millions of dollars in payments from the buyers.

The payments were in exchange for promises not to move back into the circulation areas of the papers and compete with the new owners.

Prosecutors say the payments should have gone to shareholders.

Black is also charged with billing the shareholders for a $62,000 birthday party for wife Barbara Amiel Black at New York’s fashionable La Grenouille and the use of a company jet on a vacation in Bora Bora.

Black says nothing he did was illegal.

Black said in his letter to fellow executives that they should not have to put up with what he viewed as extreme economy moves and that “any such posture would exacerbate rather than appease the lust for unearned authority of the more aggressive shareholding institutions.”

Black said he would accept a few economy measures including a cut in his wife’s salary with the company. He also said he would rebate half the maintenance cost of his Park Avenue apartment in New York.

He said that “Barbara has volunteered that she should take less salary for her job because she doesn’t have to advise the Canadian newspapers anymore.

“I will accept that, but The Daily Telegraph will then have to stop underpaying her as a columnist,” Black added.

Mrs. Black is a conservative writer whose column was published in a number of newspapers. She also was on the Hollinger International payroll as an editorial adviser.

The document was read for the jury while Black’s longtime partner, F. David Radler, now a cooperating witness, was on the stand.

Radler testified among other things that he was on hand for the La Grenouille birthday party. Hollinger International paid two-thirds of the $62,000 tab. Defense attorneys say it was partly a business event.

But Radler said he knew of no business at the party. He said that at the time they were negotiating with Donald Trump, who wanted to buy the Chicago Sun-Times Building, raze it and erect a skyscraper on the property. But Radler said none of the negotiations took place at the birthday party and he did not sit anywhere near Trump that night.

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