-Caveat Lector- > ATTACHMENT part 2 message/rfc822 > Date: Mon, 13 Sep 2004 19:21:59 -0500 (CDT) > From: "Tim Murphy" <[EMAIL PROTECTED]> > Subject: Richard Perle, Conrad Black and Hollinger > International > To: undisclosed-recipients:; > > Richard Perle, Conrad Black and Hollinger > International > ---- > 1st. September 2004 > The Associated Press > > Probe: Ex-Hollinger CEO looted profits > > Conrad Black accused of stealingmore than $400 > million > > NEW YORK - Conrad Black, the former CEO of Hollinger > International Inc., > conspired with associates to systematically loot the > newspaper publishing > company of more than $400 million _ nearly all of > its profits from 1997 > through 2003, an internal investigation found. > > The report, which was filed with the Securities and > Exchange Commission on > Tuesday, was prepared by a special committee of > Hollinger's board which was > formed last year to examine concerns from > shareholders about payments made > to Black and others. > > Black has since been forced out as CEO and chairman > of Hollinger > International, the parent company of the Chicago > Sun-Times and The Jerusalem > Post, following initial findings from the committee > that he and others > improperly received millions in fees and payments > that should have gone to > the company. He remains the company's controlling > shareholder. > > The committee's 500-page report makes even more > sweeping allegations of > wrongdoing, accusing Black and a senior associate, > former chief operating > officer David Radler, of milking the company to > satisfy their "ravenous > appetite for cash." > > In an introduction to their report, the three-member > committee wrote: "This > story is about how Hollinger was systematically > manipulated and used by its > controlling shareholders for their sole benefit, and > in a manner that > violated every concept of fiduciary duty." > > The report was the latest blow to Black, a > flamboyant media tycoon who has > been steadily losing his grip on his newspaper > empire over the past year. > Born in Canada, he renounced his citizenship to > accept the title of Lord > Black of Crossharbour in the United Kingdom, where > he moved in high-level > social circles. He also published a widely praised > 1,280-page biography of > Franklin Delano Roosevelt last fall. > > The committee found that Black had Hollinger pay for > at least $8.9 million > worth of FDR memorabilia while he was working on the > book, as well as a > number of perquisites for himself, his wife, and > other associates that were > often not properly disclosed. > > From 2000 to 2003, the committee found, the company > paid about $390,000 to > lease and repair various cars, including a Bentley > and Rolls Royce in > London. Black also billed the company for $28,480 > for three dinners for > former secretary of state Henry Kissinger, who is a > board member, and his > wife; as well as $24,950 for "summer drinks." > > Ravelston Corp., a Canadian company 65 percent-owned > by Black and the > ultimate parent entity of Hollinger International, > released a statement > saying that the report is "recycling the same > exaggerated claims laced with > outright lies that have been peddled in leaks to the > media and over-reaching > lawsuits." > > Radler owns 14 percent of Ravelston. Neither Black > nor Radler could be > reached for further comment beyond the statement. > > The three-member committee was made up of outside > directors and was advised > by Richard Breeden, a former SEC chairman who also > acted as a > court-appointed bankruptcy monitor for WorldCom Inc. > > Hollinger International's special committee is also > suing Black, Radler and > others in federal court in Chicago, seeking $1.25 > billion in damages and > accusing the group of racketeering. The committee > also submitted its final > report to that court late Monday. > > The report was disclosed a day after Hollinger > International's publicly > traded parent company, the Toronto-based holding > company Hollinger Inc., > disclosed that the SEC's Midwest regional office > planned to recommend civil > charges be filed against it for alleged violations > of the Securities > Exchange Act. Black and Radler control Hollinger > Inc. through Ravelston. > > The report was also critical of the company's audit > committee, which was > chaired by former Illinois Gov. James Thompson, > saying that the committee's > performance was "ineffective and careless over a > prolonged period of time." > > However, the investigators also found that the > committee was frequently > misled by Black, Radler and other insiders, who also > withheld important > information from them on a regular basis. Thompson > declined to comment on > the specifics of the report, but acknowledged that > he had put his faith in > Radler and Black. "I've never been on a board where > you start with the > presumption that the CEO is a crook," Thompson said > in an interview. > > The committee also criticized Richard Perle, a > member of Hollinger > International's board, saying that he "repeatedly > breached his fiduciary > duties" a member of the board's executive committee. > Perle was assistant > secretary of defense under President Reagan and a > former chairman of the > Defense Dept.'s Defense Policy Board in the current > Bush administration. > > They found that Perle repeatedly signed papers > without evaluating or even > reading them, including several that cleared the way > for payments to > insiders in a way that allowed Black and Radler to > avoid disclosing them to > the board or to its audit committee. > > They also found that Perle, together with Black, > caused Hollinger > International to make an investment in Trireme, an > investment fund in which > they both held a financial interest, without seeking > the required approval > from the board's audit committee. > > "By putting his own interests above those of > Hollinger's shareholders, Perle > has violated his duties of good faith and loyalty," > the investigators said > in their report. "As a faithless fiduciary, Perle > should be required > disgorge all compensation he received from the > company," including more than > $3 million he received in bonuses as the former > chairman and CEO of the > company's digital operation. > > An assistant in Perle's office said he was traveling > and couldn't be reached > for comment. > > The report describes extensive abuses of power by > Black and his associates, > concluding that Hollinger International "went from > being an expanding > business to becoming a company whose sole > preoccupation was generating > current cash for the controlling shareholders. ... > Black and Radler made it > their business to line their pockets at the expense > of Hollinger almost > every day, in almost every way they could devise." > > The report concluded that the amount of money looted > from Hollinger by Black > and others over the period of 1997-2003 represented > just over 95 percent of > the company's entire earnings during that time. > > Black has already lost two legal battles against > Hollinger in Delaware's > Chancery Court, the last of which blocked his effort > to call a shareholder > vote on the company's move to sell one of its main > assets, The Daily > Telegraph of London, to the Barclay Brothers of the > United Kingdom. An > earlier ruling found that he "persistently and > seriously" breached his > obligations to the company. > > Following the sale of the Telegraph, Hollinger > International retains the > Sun-Times, several other newspapers in the Chicago > area, where the company > is based, and The Jerusalem Post. > > ----- > > Copyright 2004 The Associated Press. All rights > reserved. This material may > not be published, broadcast, rewritten or > redistributed. > > ---------- > > http://www.msnbc.msn.com/id/5885667/ > > ---------- >
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