As chairman of the far-flung Hollinger newspaper empire, tall, silver-haired, magnificently tailored Conrad M. Black reigned supreme as one of the world’s most powerful media moguls. His lifestyle included $60,000-plus birthday parties for his wife, dinners with the rich and famous and jaw-dropping renovations of a Park Avenue apartment.
Black, however, will spend much of this spring in a federal courtroom in Chicago facing charges that he scammed Hollinger International Inc. stockholders out of $80 million while he sold off company assets.
Federal prosecutors say he brazenly — and illegally — billed those same people for a vacation on the Pacific island of Bora Bora, dinners with Henry Kissinger at Le Cirque in New York and a $90,000 restoration of his antique Rolls Royce.
With jury selection set to begin Wednesday, the 62-year-old Lord Black of Crossharbour — born in Canada but now a full-fledged British baron — is digging in for the fight of his life.
“I know I am innocent of the allegations against me, as does anyone who actually knows me, and I am about to prove it,” Black wrote days ago in the British magazine Tatler.
If Black is convicted of all counts, he could be sentenced to up to 101 years in prison. The actual time would be determined by the judge and likely be much less.
Federal prosecutors are counting on help from star witness F. David Radler, the former deputy chairman of the board of Hollinger and long the faithful No. 2 man by Black’s side. He has pleaded guilty to a single count of mail fraud and agreed to tell the jury everything he knows about Black in exchange for a 29-month sentence and $250,000 fine.
Black’s Canadian defense attorney, Edward L. Greenspan, is expected to cast Radler as an ungrateful liar who would say anything to stay in the government’s good graces.
At the heart of the charges is Hollinger International, which at one time owned the Chicago Sun-Times, the Toronto-based National Post, The Daily Telegraph of London and The Jerusalem Post, as well as hundreds of community newspapers in the United States and Canada. Black stepped down as CEO in 2003 and was ousted as chairman the next year.
Since Black’s empire crashed amid a storm of shareholder lawsuits and criminal charges, all the large papers except the Sun-Times have been sold and the name of the company has been changed to the Sun-Times Media Group.
Going on trial along with Black are three former Hollinger executives: Vancouver attorney John Boultbee and Toronto accountant Peter Atkinson — both of whom served as executive vice president of the company at different times — and attorney Mark Kipnis, a corporate secretary.
Black is the sole defendant charged with racketeering. He also is charged with four mail fraud counts, three wire fraud, two tax fraud and one money laundering and one obstruction of justice.
The most significant charges accuse Black and his co-defendants of selling off hundreds of community papers starting in 1998 and pocketing payments from the buyers in return for promises not to compete with them. Prosecutors say the proceeds belonged in Hollinger’s corporate treasury.
Some transactions were complex and jurors are going to have to wade through a blizzard of gray documents. Easier to grasp will be the government’s claim that Black regularly dipped into Hollinger funds to pay for things like the birthday party and shopping sprees for his wife, Barbara Amiel Black, an outspoken conservative columnist.
Prosecutors claim that the Blacks flew to Bora Bora on vacation in the company plane, then jetted up to Seattle for a performance of Wagner’s “Ring Cycle” at company expense. They say that when Hollinger officials handed their boss a bill for the junket he said: “This is unacceptable.”
Black’s attorneys have suggested he is being unfairly targeted because of his assets, arguing in one court filing that since “Biblical times, and probably before, the wealthy have been envied and condemned.” Another filing began simply with the Italian word “Basta!” — perhaps best translated as “Enough!”
In an August 2002 e-mail after questions about the two-week trip to Bora Bora cropped up, Black ruminated about his “reasonable” use of the company plane.
“There has not been an occasion for many months that I got on our plane without wondering whether it was really affordable,” Black was quoted as saying in court papers. “But I’m not prepared to re-enact the French revolutionary renunciation of the rights of the nobility.”
Greenspan declined to say exactly how he might defend those charges.
“Come to the trial,” he said.
How Black’s style will play before a jury in Chicago is another matter. Some attorneys say Black needs at least a few jurors with six-figure incomes who drive BMWs or Jaguars and appreciate a good Bordeaux.
“His lawyers have to do everything possible to see that he doesn’t have the traditional federal court jury of blue-collar retirees,” said Andrew Stoltmann, a securities lawyer who is following the case but has no Hollinger shareholder clients. “If Conrad Black has to explain away multimillion-dollar penthouses and chartered jets, the trial is over.”
Chicago attorney Rick Halprin, whose clients include reputed mob boss Joseph “Joey the Clown” Lombardo, said defending a high net-worth defendant presents special problems.
“Jurors see the big salaries and golden parachutes, which they think are obscene, and they say, ‘Whoops, if I had all that I would make sure my life paralleled sainthood,'” he said. “It’s a monumental obstacle.”
Greenspan said there’s no telling whether Black will take the stand in his own defense until after the government presents its case. He said his client has been misunderstood and that “people who know him well find him extraordinarily good company, very learned, very knowledgeable about so many different topics, and he has a sense of humor.”
“People who want to disparage him say that he’s arrogant — he uses language with such a facility with words that he’s viewed, I think, by some as pompous,” Greenspan said.
That may not be much help if Black takes the stand. But jurors are sure to see a man who is ready to fight and isn’t about to back down.
“If I were guilty,” Black told The National Post in a recent interview, “I would plead guilty.”
The trial is expected to last three months. Presiding is U.S. District Judge Amy J. St. Eve, a one-time member of the Whitewater prosecution team under Kenneth Starr who helped to win a corruption conviction against former Arkansas Gov. Jim Guy Tucker.