I back Black

Mark Steyn says that Conrad Black will beat the rap — provided he gets a fair trial In the Independent this week, Sir Peregrine Worsthorne was teetering on the brink of his Glenda Slagg moment. You know Miss Slagg’s style: Monday: ‘She was the People’s Princess. Goodbye, England’s rose, our Queen of Hearts, God bless her.’ Thursday: ‘Diana, arncha just sick of her, shallow bulimic old fag hag?’ Ever since Conrad Black got bounced from Hollinger International two years ago, Sir Peregrine has been filing columns and giving interviews denouncing Black as a blundering colonial who at the behest of his sinister Zionist trophy clothes-horse turned the Telegraph from a nice dull paper for bank managers into a snarling ‘American neocon propaganda sheet’ full of vulgar strident types like me and Janet Daley and effectively edited in Washington.

Are there still any ‘bank managers’ left to buy the Telegraph? Or have they all been relocated to the new centralised customer service centre in Estonia? Sir Peregrine’s analysis never struck me as terribly accurate. Even on the things we Zionist neocons are hot for — like invading Iraq — the Telegraph under Charles Moore had two anti-war columnists and three dithering fainthearts for every Steyn or Daley, and many of his paper’s other obsessions — foxhunting, Ulster Unionists, Elizabeth Hurley — have frankly minimal resonance inside the Beltway. I don’t get to all the neocon think-tanks but I’m sure if there’d been a talk called ‘Fox-hunting in Northern Ireland with Liz Hurley’ by Richard Perle or Paul Wolfowitz, I’d have remembered it.

At any rate, this week Dame Glenda Worsthorne warmed up with a bit of the old ‘Conrad Black, arncha just sick of him?’ routine before moving on to his new bugbear: ‘We old-guard Telegraph octogenarians thought that Conrad Black, with his neocon ideas, was about as bad as bad can get. Not necessarily so. For the Barclay brothers, with no ideas, could prove even worse.’ Oh dear. As I wrote in these pages two years ago: Those of us who’ve toiled for Hollinger in the Dominions know what comes after. After the company withdrew from Australia, the Sydney Morning Herald, the Melbourne Age, et al., lapsed back into a dreary mediocrity quite at odds with the spirit of that magnificent nation. After Hollinger sold the Canadian titles to CanWest, the nervous nellies of the Great White North finally got the big scary centralising downsizer they’d mistaken Conrad for. I hope the Telegraph doesn’t have to learn the hard way that Hollinger is about as benign an owner as one can have.

Two years, one editor and 300 redundancies later, it would perhaps be inappropriate for me to comment on Conrad’s successors in London. As it happens, I’m working out my notice at the Telegraph. Can’t complain, had a good run, enjoyed it immensely. And I entirely support the right of newspaper owners to do as they wish with their titles.

But by that measure Conrad Black was, indeed, very benign. And the week after he was finally indicted on eight counts of mail and wire fraud is well past time that British journalists, instead of recycling the same Barbara Amiel wardrobe anecdotes, should recognise that Conrad was one of the few newspaper owners who read the newspapers he owned. He wanted his papers to have influence, which was the big difference between him and David Radler, the longtime business partner who copped a plea and turned state’s evidence against him a few weeks ago. For his part, Radler always gave good quotes. He famously said Hollinger’s contribution to journalism was, ‘The three-man newsroom — and two of them sell ads.’ It would have been cute enough as a throwaway line in a trade mag, but, even better, he delivered it as part of his testimony to a characteristically pompous Royal Commission on the press in Canada.

As Radler saw things, the small newspapers with local advertising monopolies the North Bay Nugget, the Punxsutawney Spirit — were where the big bucks are; the ‘influential’ papers — the Telegraph, the National Post in Canada — were a big drain on your profitability, involving bloated staffs, pricey writers, lots of expense accounts. The last time I heard from him was a year or so back, after he’d been expelled from Hollinger and was running a group of small newspapers in the USA and Canada that he and Conrad are alleged to have sold from Hollinger to themselves at bargain-basement prices and then paid themselves non-compete fees not to compete with themselves. As the Chicago Tribune put it, ‘Black and Radler borrowed money from Black and Radler to pay Black and Radler not to compete with Black and Radler.’ Anyway, David wanted me to syndicate my Chicago Sun-Times column to these small papers. He offered me $7 a week. Not per paper but for the whole group. I can’t remember how things ended up. I think I demanded $8.25 plus a pension of 28 cents a decade, and he balked.

But that was the level of newspapering he liked. He couldn’t see the point of paying Simon Heffer a gazillion pounds a year. At meetings of Hollinger’s advisory board, Henry Kissinger and Zbigniew Brzezinski would be holding forth on Uzbek–Tajik relations and Radler would sit between them in utter silence, with a faraway look and an enigmatic smile, as if fondly recalling some especially ingenious economy measure he introduced at the Alaska Highway News or Elk Valley Miner. Uninfluential newspapers were where the smart money was. And he’s right — in the sense that it’s the Elk Valley Miner’s profits that are carrying the National Post and the Daily Telegraph and the Jerusalem Post. And I wouldn’t mind betting those tiny monopoly locals are still going long after the big brand-name papers are dead.

But Radler’s gone over to the other side now, pleaded guilty, and the only question is whether he can take his old business partner down with him. I wouldn’t bet on it, not if it comes before a fair-minded jury. But it’s an open question whether Conrad Black has now had so many resources immobilised by courts in Canada and the USA that he’ll be unable to afford the level of legal representation he needs in Chicago. Three of his four homes — London, New York, Palm Beach — have gone, the Feds have seized the proceeds of the US sale, and the surviving abode — the family seat in Toronto — has been remortgaged. He’s facing an awkward choice between defending himself in an American court with diminished funds and risking a 40-year jail term, or becoming a fugitive from justice and risking the possibility that Canada might make an exception to its traditionally lethargic extradition process for the privilege of fast-tracking its most pro-American son across the 49th parallel. Meanwhile, in the midst of all this, Conrad manages to hit the town four nights a week, and seems to be having a good time. If he’s faking it, he’s a much better actor than the fellow who’s playing him in the forthcoming TV movie.

Lord Black — or Mr Black, as the US Attorney Patrick Fitzgerald, Judge Leo Strine of Delaware and his various other American chastisers seem to make a point of calling him — is a problematic sympathy figure, but I’m surprised nobody in the British press seems inclined to make the effort. Instead, two years after Black’s downfall, his belated indictment was greeted in London with another round of profiles about the Napoleonic fantasist colonial social climber.

What precisely is the real scandal in the story of Conrad Black? Is it, as the charges against him state, that he and Barbara Amiel took a ride on the corporate jet to Bora Bora for a trip that had ‘little, if any, business purpose’? Is it that he charged the company $40,000 for a birthday party for Barbara that likewise had ‘little, if any, business purpose’? Is it, as the aggrieved shareholders Tweedy Browne allege, that Barbara received $1.3 million from Hollinger International between 1999 and 2003 yet ‘performed no meaningful work’? Is it, as Fleet Street seems to think, that his wife once gave an interview in which she said ‘my extravagance knows no bounds’, and she seems to own a lot more shoes than the rest of us and, when she buys them at fancy stores on Fifth Avenue, she expenses to the company her tips to the doorman? Etc., etc., Manolo Blah-blah-blahnik.

Or is the real scandal that Hollinger International in investigating Conrad’s ‘kleptocracy’ has run up legal bills of over $100 million, far more than it will ever recoup from him and his associates? For that kind of money, Hollinger could throw Barbara Amiel an indictable party every night for seven years.

Is the scandal that Hollinger Inc., Hollinger International’s Canadian holding company, threw out the Blacks and their associates and replaced them with a new slate of squeaky-clean non-executive directors who resigned after five months, in the course of which they earned $600,000 each plus a $600,000 termination bonus? In other words, for attending a few meetings these fellows earned in five months what Tweedy Browne complained Miss Amiel had earned in five years. A second slate of squeaky-clean post-Conrad directors has now gone to court in Ontario to get the first slate of squeakyclean post-Conrad directors’ bonuses reversed, running up more legal bills.

If this is the cure, I’d stick with the disease. In the days before the Black regime was overthrown, Hollinger’s shares were trading at $13.70. Now, they’re just over eight bucks, on a year-long slide with no end in sight, and with the Telegraph, Speccie and Jerusalem Post gone there’s nothing left to sell off. An international company has been dismantled by a group of managers holding no equity in the business, bypassing the board with the connivance of judges and regulators. The implications of this pseudojudicial usurpation of a functioning business ought to alarm anyone who wants to do business in the United States. The pursuit of Conrad Black is like a corporate version of those FBI sieges that every hapless survivalist compound or kooky cult was on the receiving end of back in the Nineties. Remember Waco? Or Ruby Ridge in Idaho, where the Feds entrapped Randy Weaver into a very minor technical firearms infraction and then gunned down his wife and kid? Weaver wasn’t the most likable cove, and what was remarkable was the number of people prepared to say, oh, well, he’s a white survivalist gun nut, so it’s OK to kill his wife and child. Likewise, because the Blacks charged their under-butlers to the company, it’s apparently OK to gut the business, sell it off for parts, leave it in an ownership limbo, and lend the full force of the state to a boardroom coup that makes a travesty of traditional concepts of capitalism.

The two most serious charges Black and his colleagues face are on the ‘non-compete’ fees and the so-called self-dealing. A ‘non-compete’ means what it says: it’s a payment you make to some guy in order to prevent him going into business against you. When Hollinger sold its Canadian papers to CanWest Global, CanWest paid several million dollars in ‘non-competes’. The rap against Conrad & Co. is that these fees were made to Black and others as individuals when they should have gone to Hollinger as a company. The best riposte to that came from CanWest’s David Asper, who made the reasonable point that, when you buy the Calgary Herald and the Edmonton Journal from Hollinger, you pay non-compete fees to Conrad Black in his personal capacity because he’s the one you don’t want coming back to town and starting up a rival paper. As Asper wrote, ‘If Lord Black ever decided to sell his interest in Hollinger, it is he — and not Hollinger — with whom we did not wish to compete.’ For confirmation of that, look no further than the present management of the shrunken post-Conrad Hollinger empire. Nobody paid a non-compete fee on the Jerusalem Post sale, because there’s nobody remaining at Hollinger who knows anything about newspapers. Why would you be worried about Gordon Paris, the chief exec who now sits in Black’s chair, starting up a new broadsheet in Jerusalem? It’s never gonna happen. The reality of the present Hollinger management is the most obvious refutation of their case.

As for the self-dealing — the selling of Hollinger titles for a buck or two to a new company founded by Black and Radler — it shouldn’t be hard to paint these as primarily Radler’s activities. Spending company money on his wife? Richard Breeden’s internal report gleefully mocks Barbara Amiel’s description of her job as ‘nothing more than euphemisms for ordinary activities such as reading the newspaper, having lunch, and chatting with her husband about current events’.

But hang on a minute: reading the newspaper, lunching, talking about current events. That’s 95 per cent of what journalism is.

If any of this came to a fair trial, Conrad Black would win. The system, having broken his company before any trial, seems determined to do the same to his own personal resources. I’d still bet on him winning. Whether there’s anything left in the wreckage is another matter.

© Mark Steyn 2005