NY Times, November 18, 2005
News Tycoon Stole Millions, U.S. Charges
By GERALDINE FABRIKANT
Conrad M. Black, once a major force in business, political and social
circles in Manhattan and London, was indicted in Chicago yesterday on
charges that he and three former colleagues stole $51.8 million from
Hollinger International, the giant international newspaper publisher he
helped create.
The 11-count indictment charged that Lord Black, 61, and his co-defendants
worked out a plan to divert funds to themselves and misused corporate
money, citing such instances as he and his wife taking a private jet to
Bora Bora and $40,000 he spent to cover much of the cost of a lavish
birthday party for his wife.
Patrick J. Fitzgerald, the United States attorney there, who announced the
indictment by a federal grand jury, said yesterday: "If you worked at a
bank and you wanted to spend $40,000 on yourself, you should ask someone
other than you. Failing to do so when there was a legal obligation to do so
is a fraud."
Lord Black was accused of wire fraud and mail fraud, charges that carry
penalties of up to 40 years in prison and fines up to $2 million. A British
citizen, Lord Black, has been spending time in Canada.
An arrest warrant has been issued for Lord Black, and there were reports
last night that he was believed to be in Canada. But Mr. Fitzgerald said he
could not comment on his whereabouts, adding: "He will end up needing to
appear in front of a judge in Chicago. We think he should be extradited."
The indictment detailed a plan to defraud Hollinger International by
diverting $51.8 million in 2000 from its multibillion-dollar sale of assets
to CanWest Global Communications. It contended that the defendants engaged
in a series of secret and misleading transactions that funneled payments to
themselves disguised as noncompetition fees or as a "management breakup
fee" to Ravelston, a company controlled by Lord Black.
It also charged that Lord Black and one of the others indicted misused
corporate funds in the South Pacific vacation and when the company paid for
two apartments on Park Avenue in Manhattan.
"This is the sort of thing," said Mr. Fitzgerald, a national figure from
his role in the C.I.A. leak case, "that in the words of Mr. Black is simply
unacceptable." The defendants, he continued, "lined their pockets" by
taking money from shareholders for themselves.
"Part of the fraud," Mr. Fitzgerald said, "was basically to defraud
innocent shareholders."
Yesterday's indictments were the latest in a succession of charges in the
last few years against once-highflying chief executives accused of
betraying investors. These have included L. Dennis Kozlowski of Tyco
International, John J. Rigas of Adelphia Communications and Bernard J.
Ebbers of WorldCom.
But perhaps none of those executives sought as much political and social
recognition as Lord Black, whose publishing empire included The Chicago
Sun-Times, The Jerusalem Post and The Daily Telegraph of London.
Lord Black and his wife, the conservative newspaper columnist Barbara
Amiel, held annual gatherings at the Bilderberg Group, where a variety of
leading political figures assembled, including Margaret Thatcher; Richard
N. Perle, a high Defense Department official in the Reagan administration
and early adviser to the Bush administration; and a former French
president, Valéry Giscard d'Estaing.
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http://www.socialistworker.co.uk/1878/sw187802.htm
Scandal that goes to heart of ruling class
'How much money has to leave the company before somebody calls the
cops?' one financial analyst asks of revelations about the Daily Telegraph
IS ONE of the world's most powerful manipulators of people's minds a
crook and a thief?
Lord Conrad Black, friend of the British royals and top politicians
everywhere, resigned on Monday as chief executive of the Hollinger
International newspaper group. Huge sums of money have gone astray.
Hollinger is the group which owns the Daily Telegraph, Sunday Telegraph and
127 other titles across the globe. Under Black the Telegraph is a
fanatically pro US government, pro-Israel, pro war against Iraq newspaper.
It has campaigned against the peace process in Ireland.
Black and a tiny group of other senior executives have received nearly
$300 million in payments from Hollinger since 1995. Some was "service
agreements" and the rest "non-compete fees"-paid by other newspapers in
return for Black not launching a rival to them.
The focus at the start of this week was on $32 million of undisclosed
or "misreported" payments. Black's papers were the ones that accused
anti-war MP George Galloway of financial misdealing!
The whole corporate structure of the newspapers involved is incredibly
complex.
The Telegraph and a string of other titles are owned by Hollinger
International. This in turn is controlled by Hollinger Inc, Lord Black's
holding company. This in turn is 78 percent owned by a private company
called Ravelston, controlled by Black and a few friends. Money sloshed
between these companies.
The exposures now have come about because Black has ripped off other
fat cats. Millions of dollars that looked destined for shareholders went
into the pockets of Lord Black and Hollinger International's president,
David Radler.
Black is not the first newspaper tycoon to be caught up in financial
scandal. Media mogul Robert Maxwell stole hundreds of millions of pounds
from his workers' pension fund.
This week has lifted the lid on the corrupt world of the media bosses
who pontificate about the wonders of capitalism. These are the men who
thunder against workers when they go on strike, or mock any attempt to
interfere with business "freedom". These are the men who try to tell us how
to vote and how to live.
These are the men who get into 10 Downing Street and are wooed by
politicians of all the main parties.
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He started by stealing exam papers
.. Directors of Hollinger International include US war criminal
Henry Kissinger and "Prince of Darkness" Richard Perle, one of Bush's most
vicious advisers.
.. Black had two executive jets to whisk him to homes and hotels in
New York, Toronto, Tel Aviv or Palm Beach.
.. Black has mansions in Kensington, Canada and Florida.
.. Black moves in the elite world of London ruling class clubs. He
is a member of the Athenaeum, Whites, the Beefsteak and the Garrick.
.. He was made a lord under New Labour on the recommendation of
Tory leader William Hague. When he took his seat in the Lords he was watched
by his old friends Henry and Nancy Kissinger.
.. He bought the Telegraph for $67 million, catching what fellow
media crook Robert Maxwell later called "history's largest fish with
history's smallest hook".
.. When she was Conservative prime minister Margaret Thatcher twice
accepted Lord Black's invitations to address the Hollinger board.
.. Black and his wife were guests of the queen when she held a
party at Windsor for Prince William's eighteenth birthday.
.. David Blunkett is one of the top politicians who has been to
Black's parties.
.. Black is the son of a successful brewing executive whose dying
words of advice were, "Life is hell, most people are bastards and everything
is bullshit." He then fell down a staircase and died.
.. At the age of 14 Conrad Black made early cash by stealing exam
papers to sell at his school.
