A review of Conrad Black's A Matter of Principle .
In the matter of the United States v. Conrad Black the defendant declined to take the stand. Instead of facing his accusers from the witness box, Conrad Black wrote A Matter of Principle.
This book is both a compelling read and a persuasive defence. Before anyone in Canada accepts that Black was guilty of any crimes, as was suggested by the verdict rendered in the Chicago courtroom of Judge Amy St. Eves, they should read this book.
A Matter of Principle is far more than a legal factum — it is a deeply personal rendering of the war the United States government waged on Conrad Black. On another front Black recounts how he faced a horde of lawyers and accountants that took him for a profit centre. When Ernst and Young sought a win-win scenario in the Black fiasco, it was a win for Ernst and a win for Young.
Before delving into its content, we can first admire the book on its literary merits. Some paragraphs are worth rereading, not for want of clarity but to admire as works of art. While there are sections of the book laden with complex business arrangements that readers might be tempted to skim, they risk missing out on a well-structured sentence or juicy anecdote (the aphorism of Sir James Goldsmith, “When one marries one’s mistress, it creates a vacancy,” comes to mind).
Black is a supremely confident writer, although in this book he acknowledges his struggles tested the limits of his eloquence. While seething at those who were disdainful toward his wife, Black pauses to note: “My contempt for almost all of them is almost, but not quite, beyond my powers of expression.”
On Barbara Amiel, who is often portrayed in the media as a modern day Marie Antoinette, Black unexpectedly reveals his wife to be shy and reclusive. She hid in her room when the Duke of Edinburgh visited the Black home in Toronto. She would often feign illness to avoid dinner parties. Black’s love for his wife is such that he told her she would be blameless if she left their marriage should the ordeal of the criminal trial overwhelm her.
The book reminds us that Black did not command international respect and ridicule because he was born with a silver spoon in his mouth. Black mattered because he could influence the opinions of the most powerful figures in the world. He was a larger-than-life personality with a vocabulary to match. In addition to being the proprietor of some of the world’s most respected newspapers, Black was a peer in the House of Lords. Along the way Black broke bread with a wide cast of characters: from Pierre Trudeau to Elton John; Henry Kissinger to the Duke of Edinburgh; Margaret Thatcher to Tony Blair; Brian Mulroney to Cardinal Ratzinger; Augusto Pinochet to Princess Diana.
Black was not just the proprietor of newspapers; he was the brand. But that also made him a target. Black admits that his “pride and haughty spirit were of the nature that often leads to a fall.” While at the top of the heap Black confesses he had a tin ear when it came to criticism. Given Black’s authenticity and strong character, it’s unlikely that an astute spin doctor could have dented Black’s bravado.
We may think of Black as being wealthy beyond measure, but he tells us the extent to which his empire was thinly capitalized. Black’s empire was launched on nothing more than a $500 investment he made in 1966 for a one half interest in a community newspaper, The Eastern Townships Advertiser. It was through acquisitions, shrewd management, massive debt and Black’s imprint that prestige, profits and power accumulated in Hollinger Incorporated Ltd. to the benefit of minority and majority shareholders.
When Hollinger acquired the London Daily and Sunday Telegraph (at a bargain price) Black’s influence reached its pinnacle. It was a perch he craved. “A good part of my determination to keep the Daily Telegraph up market was not only because I was certain this was the best way to ensure its viability, but because I believed in its power to influence positively to some extent the serious political arguments of the time. This was a dangerous addiction.”
The prestige and prominence of Conrad Black — not to mention that he is a walking and talking thesaurus — made him Hollinger’s most valuable asset. Although he does not say so in the book, when an investor acquired shares of Hollinger, they were buying a piece of Conrad Black just as much as they were buying a string of daily newspapers.
For his services Hollinger paid Conrad Black a fee and reimbursed his business expenses. Given the industry and the manner in which Black operated, sorting personal from corporate expenses was an accounting nightmare. While the company’s board of directors was responsible for oversight, in court the directors accepted responsibility only to the extent that they “skimmed” sensitive documents. About a decade ago, Black understood the newspaper industry was in decline and so he began to liquidate Hollinger’s newspaper holdings. Those who bought Hollinger assets, such as CanWest, learned the hard way why Black was a seller.
Whenever a “Black” newspaper was sold, the term sheet included a clause that prohibited Hollinger and Black from re-entering the market as competitors. It was not Hollinger that buyers feared as much as it was Black. If it seems peculiar that a buyer would pay Black personally to neutralize his work, ask yourself this. If there could have been such a thing as a takeover bid for Apple Inc. five years ago, would a prudent buyer not want some guarantee that Steve Jobs would not later become a competitor to Apple? Would such a restriction not be something that a buyer of Apple Inc. would be willing to pay for? Conrad Black was to Hollinger what Steve Jobs was to Apple.
Whenever a “Black” newspaper was sold, the term sheet included a clause that prohibited Hollinger and Black from re-entering the market as competitors. It was not Hollinger that buyers feared as much as it was Black.
Conrad Black was erudite, elitist and therefore an easy target. The non-compete fees and his business expenses were the ammunition that were used to take him down. First it was investment firm Tweedy Browne who sounded the alarm. In response Black struck a special committee to investigate allegations of impropriety. A restructuring plan was subsequently put in place, which is where the matter should have ended, although Black does not say he was faultless in following the advice of professionals. “I deserved to be punished, for a tactical, rather than substantive mistake, but not to be morally exterminated…I had accepted the principle that if money had been improperly paid and received — it should be repaid — instead of taking refuge in technical defenses.”
At any other time in his career, accusations of impropriety would likely have been resolved through negotiation, arbitration or civil proceedings. Criminal court is not a place where differences of opinion are best adjudicated.
On a number of occasions Black arranged for minority shareholders to be bought out at fair value. Those who were minding Hollinger’s assets thwarted these bids. So long as allegations of malfeasance hung in the air, the lawyers, accountants and special committee members raked in indecent fees. Ultimately $2 billion in shareholder value was squandered after Black was turfed from management, leaving the shareholders with nothing.
Black writes that he faced up to the criminal trial with most of his assets frozen by the courts, precluding him from retaining the top-flight US law firm he wished to have represent him at the trial. To stay afloat he secured short-term loans from his dwindling list of friends. But even in debt Black made good on his charitable commitments: “Every pledge was fulfilled to the last cent, and would have been even if I had to sell my own possessions and wash dishes for a living to accomplish it.”
Black’s account of his trial is riveting and on many occasions morbidly humorous. Everyone but the defendant might find it amusing that lead counsel Eddie Greenspan took regular naps during courtroom proceedings. As Black observed, “Greenspan would waken occasionally, like a crocodile whose nostrils have been tickled by a ripple on the water, and advise me to sit differently, that my posture was too erect for the jury, and then doze off again.” This gave a new meaning to the term “dream team.”
Black maintains his innocence from prison. In a place where the currency is postage stamps, Black sleeps in a lumpy bed with a thin pillow and has shed 35 pounds. Yet he has made good use of his time. His role in the matriculation of fellow prisoners is inspirational and, for Black, may exceed in satisfaction most other accomplishments.
We may see Black back in Canada before long. He regards it as home. It’s unclear if this will require political intervention, although Black seems disinclined to ask. His only request of a personal nature from a politician was to the incoming Harris government in Ontario not to impose compulsory helmets on adult bicyclers in the parks system.
Many will say that because Black is a convicted felon who surrendered his Canadian citizenship his re-entry to Canada should be denied. All I can say is read this book and bring Conrad home.
Conrad Black. A Matter of Principle. Toronto: McClelland & Stewart, 2011.