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Middle aged heterosexual, WASP male. Semi retired, semi-sane and semi-serious. And endangered species and I'm not going quietly!!!!

Tuesday, March 20, 2007

U.S. Justice on trial!

Lord Black of Crossharbour (a.k.a. Conrad Black) has a problem!

Ever since the financial scandals in the United States business community over the last 15 years (Enron, World Com, Duke Energy, Lucent Technologies, AIG etc.) the U.S. justice department has declared open season on business executives and good old Conrad got tagged as "It" in the big game of financial "gotcha."

So as not to bore you too much I will give a very brief history of what our wayward hero did over the years to get himself in this jam.

1960s to 1970s - Black began buying small Canadian newspapers during his 20s and in 1971 co-founded the Sterling Newspapers Group.

1978 - Became chair of the Argus Corporation, one of the original and biggest "old money" corporations of the Canadian Establishment.

This was a position he used as a stepping stone to launch the Hollinger Group.

1990s - By the early part of the decade Hollinger controlled 60 per cent of Canadian newspaper titles, as well as hundreds of dailies in the U.S., England, Australia and Israel. Newspapers included the Spectator, Chicago Sun Times, Montreal Gazette, Daily Telegraph, and Jerusalem Post.

Black soon earned a reputation for taking over newspapers and raising profits by cutting costs and slashing jobs and before you could shout "hold the presses" he was the third largest Media (Press) Baron in the World behind Rupert Murdoch and Robert Maxwell.

At its peak in 1999, Hollinger was earning revenues of more than $2 billion a year but then for some strange reason our protagonist decided that he had made his fortune and started selling everything in one gigantic garage sale.

The British government moved to make him Lord Black, but Prime Minister Jean Chretien, who was attacked relentlessly by Black's newspapers during his leadership, opposed the move.

Chretien pointed to the 1919 Nickle Resolution which ruled that foreign governments could not grant honours to Canadians that carry a title or privilege. Black challenged the ruling in court, but was unsuccessful so in a fit of pique renounced his Canadian Citizenship.

During the sale of Hollinger assets by November 17, 2003 Black announced he would step down as CEO of Hollinger International following an internal inquiry which found that Black and other Hollinger executives received more than $32 million US in unauthorized payments. Refusing to admit any wrongdoing, Black described his departure as "retirement."

The committee of Hollinger's board found that payments styled as 'non-competition payments' were made that were not authorized or approved by either the audit committee or the full board of directors of Hollinger."

Of that, Black and chief operating officer David Radler each reportedly received $7.2 million, while $16.6 million went to parent company Hollinger Inc. Two other Hollinger executives reportedly received just over $600,000 each. Black again denied any wrongdoing and insisted the unauthorized payments were above-board.

His position was that the "non-competition" payments were made to him and his management team and not the Board or shareholders. (Since the old board and shareholders were not the threat to the new owners/managers. Black was if he started another competing paper.)

(His position was vindicated when, after his departure, Hollinger shares fell from about $21 to less than a buck. (They went into the 'penny stock' category!) PLUS they went from being a highly profitable paper to losing money. This made the Board see red all the more.)

(Conrad wondering how things ever got so crazy!)

One thing led to another and the next thing you know lawsuits for tens and even hundreds of millions were flying this way and that.

On top of this the U.S. Justice Department had by then decided it needed another businessman to make an example of and our Hero and all his Canadian friends came under their scrutiny.

(By some strange co-incidence none of the Americans were indicted.)

November 17, 2005 - The U.S. Attorney's Office in Chicago charges former Hollinger International head Conrad Black and others in an alleged scheme to divert more than $80 million US from the company. (Remember the non-competition clauses, etc.)

December 1, 2005 - Conrad Black pleads not guilty to eight fraud charges in connection with the alleged diversion of $80 million from Hollinger International Inc. He is released on $20 million US bail and ordered to live in Canada, Chicago, or Florida.

By this time the District Attorney is getting really carried away with his job and by Dec. 15, 2005 four new charges are leveled against Conrad Black, including racketeering, money laundering and obstruction of justice. Black faces a maximum of 95 years in prison if convicted on all charges.

Now, my friends, we get to the point of this diatribe.

If the bombastic, arrogant, self-righteous Lord Black had been tried in any other jurisdiction, (Such as New York) where they understood the intricacies of financial matters then I would have no sympathy for him whatsoever. But, instead he is being tried in a "blue collar" (read "lunch bucket") town (Chicago) by a blue collar jury and they do not bode well for our wayward Baron.

The day after jury selection one of these lunch bucket jurors was quoted as saying "It would take me a lifetime to make a million dollars and if this guy can make that much and more in one year he has got to be a crook!!!"

(And the prosecution didn't see anything wrong with that!)

Chicago could be a black day for our dear Lord Black!

Your "hot of the press" scribe;
Allan W Janssen

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Blogger Whitesnake said...

Now that was funny......Not the post the title...
US Justice on trial!

Where the hell do you get all these one liners?

Wednesday, March 21, 2007 2:49:00 a.m.  

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