Conrad Black – 2003

By | November 12, 2016

“Corporate kleptocracy”

conrad-black

Toppled media tycoon Conrad Black leaves the Dirksen Federal Court after being arraigned

THE CRIME:

Born in Montreal, Quebec on 25 August 1944, Conrad Moffat Black was a right-wing newspaper proprietor and biographer. At one time he owned The Daily Telegraph, The Sunday Telegraph and The Spectator (UK), Chicago Sun Times (USA), Jerusalem Post (Israel), National Post (Canada), and more than 400 local newspapers in North America.

He bought his first newspaper in 1966, the Eastern Townships Advertiser in Quebec and five years later formed a holding company with two friends to buy more newspapers. The death of his father in 1976 and his subsequent inheritance allowed Black to become a major player in business. However, he gradually began to sell off interests in manufacturing, mining, retailing, banking and broadcasting and concentrate on newspapers. In 2008 Canadian author John Ralston Saul wrote, “Lord Black was never a real ‘capitalist’ because he never created wealth, only dismantled wealth… his career has been largely about stripping corporations. Destroying them.”

In 1985 Black invested in the ailing Telegraph Group in Britain and in 1990 bought the Jerusalem Post. Black’s company, Hollinger International, was listed on New York Stock Exchange in 1996. Seven years later shareholders began complaining that financial impropriety was taking place at the company, in particular compensation and fees paid directly and indirectly to Ravelston’s (Black’s personal holding company) and Black’s associates.

The complaints reached the United States Securities and Exchange Commission (SEC) and Black and his colleagues were accused of running a “corporate kleptocracy”. In November 2003 Black resigned as CEO of Hollinger International. In December he refused to answer questions about business dealings before the SEC. In February 2004 he sold his stake in Hollinger to David and Frederick Barclay but the sale was prevented by a legal challenge. In February, 2004, Delaware judge Leo E. Strine, Jr said, “Black breached his fiduciary and contractual duties persistently and seriously… I found Black evasive and unreliable.” In November Black was charged with mail and wire fraud and obstruction of justice. His trial began on 14 March 2007.

WHERE:

England; USA

WHEN:

November 2003

THE AFTERMATH:

On 13 July 2007, after the jury deliberated for 12 days, Black was found guilty in Illinois US District Court of three counts of mail and wire fraud and one count of obstruction of justice and acquitted of nine other charges. A cheer went up in the Daily Telegraph newsroom when the conviction was announced. On 10 December he was sentenced to serve 78 months in federal prison, pay Hollinger $6.1 million and a fine of 5125,000.

YOU SHOULD KNOW:

Barbara Amiel, Black’s second wife, once famously said. “My extravagance knows no bounds.” According to Hollinger expense accounts she had spent $2,463 on handbags, $2,785 on opera tickets, and $140 on “jogging attire”

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