A review of A Matter of Principle, by Conrad Black
In the late 1960s, at age 21, Conrad Black bought his first stake in a newspaper, the Eastern Townships Advertiser, of Knowlton, Quebec, for $500 ("approximately $499 more than it was worth"). He did the writing and layout himself; often he needed snowshoes to get to his car. He bought the Sherbrooke Daily Record (circulation: 7,000) while still in law school. In 1986, now seasoned and aggressive, he acquired the legendary London Daily Telegraph. Lord Hartwell fainted when he realized he had lost control of a paper his family had owned since late-Victorian times. Within a decade Black would own papers in 31 American states; the Sydney Morning Herald, Melbourne Age, and Jerusalem Post; and 59 of Canada's 105 dailies. He even survived a price war against the "Jurassic predator" known as Rupert Murdoch. Black was not entirely self-made—he and his brother split a $7 million inheritance—but with it he assembled the third-largest newspaper corporation in the Western world, after Gannet and News Corp.
In November 2003 it emerged that some $32 million in "non-competition" payments (typically a seller of a newspaper is paid not to re-enter the same market for a time) had been made to him and other executives at Hollinger International, the newspaper holding company that he chaired. No one among his expensive cadre of lawyers, managers, and accountants knew why the payments hadn't been properly authorized by the Audit Committee. Black blames human error. Hollinger hired a former Security & Exchange Commission chairman, Richard Breeden, to investigate; a "blizzard of SEC subpoenas" followed. Often his doorbell would ring and Black would find an envelope on the floor, with a note on company letterhead unceremoniously informing him that his credit card or phone perquisites had been severed—"relegating," he says, "the continuing chairman of the board and chief stockholder to the status of a junior employee." When Breeden issued his report nine months later, alleging a "kleptocracy" that looted $400 million, crisis erupted. A gleefully hostile press (especially Murdoch outlets) "sentenced" him with 50 stories a day about his hauteur and opulence. Banks on whose boards he had sat since his early 30s dropped him, as, eventually, did Hollinger. Friendships were strained. Some speculated publicly on his possible suicide. His paper deliveryman, apparently worried about his client's solvency, asked the erstwhile Fleet Street press baron for payment in cash. The indictment came in November 2005 in Chicago. "I would go to prison for life," Black resolved, "before I would plead guilty to crimes I had not committed."
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A Matter of Principle, Black's second memoir (the first was A Life in Progress, 1993) moves chronologically, quickly recounting his impressive career until his troubles descend a hundred pages in. The vivid and gossipy sketches portray tycoons, presidents, journalists, princesses, judges, celebrities, bankers, defense ministers. The book is colorful, amusing, candid, fierce, moving, pompous, and vengeful; except for a few defensive moments, it strikes a tone of bloody-but-unbowed indomitability. Black claims the affair began as a "factional dispute between groups of shareholders" at Hollinger and so feels compelled to discuss things like "unrepresentative prices," "cross-warranties," and "cash-collateralized notes." But the story is told with style and drama. Few CEOs are in a position to write sentences about banks "grimly muttering ‘default,' like James Joyce penitents semi-audibly reciting their rosaries," or to strike off aperçus like this: "To say that Sarbanes-Oxley was draconian would be to underestimate Draco's respect for individual liberty." His delightful name-calling reflects the best traditions of literary fulmination. The "nauseating" Breeden reminds him of a "regional commissar of Beria's, with the bloodless, piscine coldness of someone whose power vastly exceeded his intelligence." Nor are friends spared. Black felt betrayed by Henry Kissinger's silence as a member of the Hollinger board: "This extraordinarily intelligent refugee of Nazi Germany seemed not to understand that the contemporary version of ‘I was only following orders' is ‘My lawyer advised me not to.'"
Black describes a pre-trial assault on his finances by assistant U.S. attorneys who froze his assets and imposed tax liens. His personal wealth plummeted from $400 million to $100,000 at its nadir. Counsel at Williams & Connolly, to which he had already paid $9 million, withdrew for lack of retainer. His wife Barbara Amiel sold jewelry to fund his defense. The superb narrative of his four-month trial captures the thrill of point-scoring and agony of lost chances. At night Black read Kafka. His two lawyers fought capably, but he claims that the Runyonesque Eddie Genson was hindered by a tangled syntax that "made Casey Stengel seem like Thomas Hardy," while Eddie Greenspan, one of Canada's finest defense lawyers, was dazed by unfamiliar U.S. procedure and enervated by diabetes. In December 2007 Black was convicted on three fraud counts and one count of obstruction of justice, and sentenced to 78 months. It was a victory in a sense—the government initially sought 95 years and he was found not guilty on 9 of 13 charges—but he thinks prosecutors kindled the jury's envy to persuade it (excepting the two members who preferred to sleep) that he had done at least something dishonest. These were the days of Enron, WorldCom, and Tyco, though Black never destroyed 20,000 pensions nor hosted parties with ice sculptures of Michelangelo's David micturating Stolichnaya.
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Why were the Hollinger intriguers and the hostile shareholder upstarts so bent on a "putsch"? In his description, the tale of his dethronement is not one of actual wrongdoing but of the fact that there were millions to be fought over, won, wrangled, and co-opted through a thousand tricks and complex transactions which invite maneuvering, foul play, aggression, and betrayal. He asks us to imagine a "sharks' feeding frenzy": when fat prizes are "dangled above the open mouths of people who have dreamed of or pursued such sums without significant success all their lives, hunger takes over." It wasn't the jury's job to consider anything beyond the evidence at trial, but there does seem something oddly counterproductive about cries for "shareholders' rights" by corporate-governance activists, Delaware chancery judges, and U.S. Attorney Patrick Fitzgerald who together tended officiously to Hollinger's bankruptcy and the evaporation of $2 billion in shareholder value. Black says his successors, none of whom had newspaper or even managerial experience, began paying themselves extravagantly, especially Chairman Gordon Paris ("a whiny, grating persistence, like a malfunctioning appliance"), who made $17,000 a day for his vision in squandering $42 million in subprime mortgages. They "effortlessly [lost] almost ten times what we had been falsely convicted of receiving improperly."
Margaret Thatcher, one of Black's heroes (and sponsor of his entry into the House of Lords in 2001), once said that if you have to tell people you are powerful, you aren't. One is struck by the number of sentences in which Black alludes to his power: "I was walking in Central Park, closing in on the bench Mayor Bloomberg had donated in the name of Barbara and me…." "Chrétien telephoned me about this matter several times…." "[I]n a particularly uproariously amusing cruise along the Côte d'Azur with Bill and Pat Buckley…." "When the Duke of Edinburgh came to Toronto…to see my ship model and naval book collection…." We discover that his Toronto home is a Georgian manse with double-height, oak-paneled libraries sagging with 20,000 volumes and that he prays in his private chapel (with "reading room and theological library") consecrated by not one but two cardinals. We see him gliding to Bilderberg meetings in Bürgenstock and Versailles; testifying about NAFTA to a trade commission alongside Senator Phil Gramm; obtaining anecdotes about Franklin Roosevelt from the Queen Mother; taking in Wagner at Bayreuth while negotiating deals during the intermissions; admiring the shield given him by Chief Buthelezi of the Zulus. Bill Clinton sternly advises him not to submit to his legal tormentors.
Lord Black writes confined in a Florida prison, where memories of the lofty flights of his past must glow forlornly. "I entered these walls," he writes, as if to reassure himself, "a baron of the United Kingdom, Knight of the Holy See, Privy Councillor, and Officer of the Order of Canada, former publisher of some of the world's greatest newspapers, and author of some well-received non-fiction books." If it is rare to read such self-trumpeting, it is rarer still for it all to be perfectly true. I would not engage in psychological speculation if Lord Black didn't seem to invite it by his unblushing candor. We read of Barbara's breakdown when the scandal broke (she nearly catches frostbite walking six miles in the snow to buy, for crazed reasons, two combs); his night sweats and sleeping medications; his loneliness, melancholy, despair, and rage. Such openness could suggest a man writing for posterity, the most supreme of courts.
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Coleman Federal Correctional Complex is a "relatively gentle and bumbling gulag." He gets up at 7:15 a.m., has granola and tea in bed, tutors convicts on spelling and sentence structure, does email, rows 5,000 meters, reads, writes columns for the National Post and National Review, practices piano, socializes over smuggled-in Colombia coffee, showers at midnight, then does crossword puzzles until 1 or 2 a.m.. In prison the currency is not stock assets but postage stamps, and his skill in arranging financing is engaged for the benefit of ex-drug dealers who wish to attend college by correspondence. His cellmate paddled from Cuba to Key West on the roof of an ice-cream cart. "I now know," he says, "that the lowest echelons of American society are in some ways more endearing than the highest, an unsuspected insight." In 2010 his legal appeal miraculously reached the Supreme Court, which ruled that the crime of "honest services" fraud—two of his four counts—was unconstitutionally vague. He was released after 29 months only to be sent back for seven more (with good time reduction) on his convictions for obstruction of justice and the remaining fraud count (for the illegal receipt of $285,000, a sum down, apparently, from $400 million). When released this spring, he will be a "persona non grata" on these shores—just as well, since the U.S. is a "patria non grata" to him. His views on our justice system are pure fire, especially the reliance on plea bargains, which he says "extort and suborn" perjury from the weak and self-interested.
The end of this story is unwritten. "For the last six and a half years I have been fighting for my financial life, physical freedom, and what remains of my reputation against the most powerful organization in the world, the U.S. government," he says. "I still expect to win." Black, now 67, is a fascinating, accomplished man, who has excelled in commerce, journalism, and the authorship of biography, auto- and otherwise. He swears in the pages of this book to restore himself to influence. What could be more interesting than to see if he succeeds? So far, every act of his redoubtable life suggests that discomfiture, for him, is never more than temporary.