Conrad Black

by A Matter of Principle

  Later that night I flew to Toronto, having sent out a few warning emails of what was about to happen, particularly to the Southeastern people (the last communication I am ever likely to have with them), and my dear and faithful assistant in London, Rosemary Millar, who was already suffering from a cold, which shortly escalated to pneumonia, and then, six weeks later, was diagnosed as inoperable lung cancer. We had worked together closely for fourteen years. I would never see her again.

  When I got to Toronto, I sent my final suggestions for the press release announcing my resignation, the Restructuring Agreement, and the Strategic Process, which Breeden most graciously accepted, and I emailed Breeden back, thanking him for his consideration. He responded the next day in the same spirit. This was the absolute high-water mark of our relations. There was an email from my dear Barbara, addressed to “Fat Fingers,” a brave attempt at simulation that life would go on as it had (replete with her endearing reflections on comparative svelteness). But all was changed utterly.

  * M.A. Hanna Company, named after President McKinley’s chief backer, had been Hollinger Inc.’s associate in iron ore mining ventures in Labrador and Quebec, which supplied many of America’s largest steel companies. We made a takeover bid for Hanna in 1982, which was resisted, and there was some lively litigation in Cleveland, and an amicable settlement that left us with 28 per cent of the stock, and a strong board position.

  [CHAPTER FIVE]

  THE PRESS RELEASE WAS ON the wires the following Monday morning. In the next twenty-four hours, the full force of the media hostility to anyone suspected of abusing an executive position – and to me personally – came pouring forth in Britain and Canada and a few sections of the United States. Murdoch’s newspapers had been stoking up all through the run-up and went straight into joyous orbit. The London Sun began a widely emulated trend by announcing in a headline that I was likely to be sent to prison. Murdoch’s New York Post did the same. Most of the newspapers that reprinted and even embellished the extraordinary vitriol of the British press had no idea that part of the anger with me was an ideological divide. Instead, like children wallowing in a mudbath, North American press and television picked up without any pretense of investigation every last vicious canard written in the U.K. newspapers about Hollinger, Barbara, and me.

  MURDOCH HAD HIS OWN MOTIVES, of course. His New York Post became the outlet for every fictional tale of my enemies and then some enthusiastically invented by the Post itself. One day it would report that I had terrorized a table at the New York restaurant La Goulou after overhearing their table chat. Another time it recounted a negative incident involving Barbara that took place, according to the Post, at a London party when she was, in fact, in New York. The inventions were tabloid gutter, which, after all, has never ceased to be Murdoch’s chief stock in trade, in print, and on television. In the post-Enron frenzy, the climate was so hostile to well-paid executives it was hard to rule out anything. I had recently seen Martha Stewart, a casual acquaintance, at a social engagement, and was impressed at her tough Polish Catholic imperviousness to the criminal charges that would lead to her brief imprisonment. I had experienced some of the fury of the corporate governance movement, but rabidly pro-American as I was, I assumed that justice could be had for those who were, in fact, innocent. Whatever might happen, I was going to bear up with as much dignity as I could muster.

  I had been a disdainful resister to corporate governance poseurs such as Tweedy Browne and now, denuded of defences and presumed by an eager international press to be an embezzler, came the public relations lynching. My reputation, which I had been building assiduously since my tumultuous secondary-school days, almost vanished in two days. The Toronto Globe and Mail, which had run a very generous review of my Roosevelt book by the distinguished historian Roger Morris on November 15 (including a photograph of my face super-imposed on a picture of FDR, complete with cigarette holder), gave me the entire front page on November 18, under the massive headline “BLACK’S DARKEST DAY.” As I was almost instantly without a reputation I was practically unable to sue anyone. Even in countries that, unlike the United States, maintained the civil tort of defamation, damages would be impossible to prove. The initial New York Times front-page story implied that I had been revealed as an embezzler. The ending of Camus’s The Stranger came to mind: I was going to my execution as mobs howled their execration. And it was deafening.

  It was one thing to convict executives of Enron and WorldCom, companies in which there had been colossal bankruptcies, a large accounting fraud, billions lost in the stock market, tens of thousands unemployed, and destruction of evidence. Executives at Adelphi appeared to have been involved in the misappropriation of billions of dollars, disguised from the auditors. Could the corporate governance movement reach such a level of ferocity that an innocent man could be prosecuted in the absence of evidence and effectively convicted and sentenced by a hostile press? I thought not, but I was in free-fall now, so swift had been the collapse of the life I had known. Watching my name crawl across the bottom of the television screen linked to accusations of fraud and “looting” on American news stations was unearthly.

  I received generous notes and telephone calls from many individuals, including Marie-Josée and Henry Kravis separately. Attacks came from totally unexpected quarters. In Canada, the initial announcement of the perceived instability of my financial condition came from a man who was generally assumed (including up to a point by me) to be a friend of mine, the Honourable Henry (Hal) N.R. Jackman. He was a prominent financier, chancellor of the University of Toronto, former Lieutenant Governor of Ontario, and former associate of mine. In late October he gave a press interview to proclaim that my career was now ending in a shambles and my company was on the verge of financial collapse as he had, he happily announced, long predicted. He restated his oft-repeated theory about my having both a death wish and a Napoleon complex. For good measure, he threw in that Barbara’s life had been “absurd.”

  He and I had many amusing moments over the years, and some sharpish exchanges too, but I was shocked by the tenor of his attack, though he avoided casting any aspersions on my business ethics and gave me generous credit as a writer and historian. (After the lapse of several years, my relations with this intelligent and amusing man would be patched together once again.)

  In Canada old comrades from Southam and the National Post, such as Ken Whyte and Terence Corcoran, and political allies, such as David Frum, spoke up on my behalf. The reviews of my FDR book continued to pour in almost universally positive, including Ray Seitz’s generous review in The Times. It was a strange leitmotif to the business and public relations debacle. I will never know how much better the book would have sold if I had been able to market it effectively, nor how much more depressing the time would have been without it. But the publication at least made it more difficult to claim I was just another sticky-fingered, grubby businessman.

  In Britain, apart from book reviewers, the media assassination squads ruled the coverage. The Murdoch newspapers played the prison card for all it was worth. The Guardian and Independent joined them. I knew there was no point appealing to my friend Tony O’Reilly at the Independent; he would never try to influence a newspaper he controlled. One edition of the Financial Times, generally a fairly responsible newspaper, bannered the front-page headline that I had taken a £94 million dividend (about $200 million at the exchange rates of the time) from the Telegraph, a complete invention. (We did at least extract a “clarification” on this story.)

  During the discussions of a possible business merger with Associated Newspapers, the Mail and the Evening Standard, which they owned, were quite reasonable, and even Richard Desmond showed comparative restraint at the Express. The Daily Telegraph was factual but gradually gave way to showing it was no gentler than the competition. Dominic Lawson and the former editor of the Catholic Herald, William Oddie, and of the The Times, William (Lord) Rees-Mogg, wrote in support of me. The distinguished Daily Mail columnist Mela
nie Phillips deplored the schadenfreude at my travails. Novelist Freddie Forsyth wrote in the same spirit, adding that the word should be used sparingly now that housemaids were frequently uttering it. Taki, writing in the Spectator, despite our previous disputes, was magnificent from start to finish.

  Max Hastings and Charles Moore were guarded. Boris Johnson said a few nice things about me on television and, later, also to his biographer. Charles Moore telephoned me, ostensibly to offer encouragement but really to ask about the future of the Telegraph and to insist that I understand how upsetting the Telegraph journalists and editors found the uncertainty. I suggested that I found it disagreeable to be the subject of hate from people for whom, as Charles knew, I had worked and risked to provide secure, respected, and generous employment. He dismissed this as merely the “five minutes of hate” Orwell had described in reference to Emmanuel Goldstein in Nineteen Eighty-Four. It was more durable than that, but he was probably right insofar as it was faddish and orchestrated. Understandably, he had no concept of what the corporate governance hurricane could do to normal corporate organization. I had no purchase on the fury of events.

  The general attitude of the Telegraph journalists from the start was that they had suffered through a pay freeze while my associates and I had stuffed our pockets with non-competition fees – which, to the anti-capitalist, Gladstonian, or non-conformist conscience, or even socialist reflexive habits, of Britain, was a moral outrage. That we had rescued the Telegraph from insolvency; turned it into a full-service newspaper; downsized the workforce generously and without upheaval; got it onto new presses and into new premises; brought it through the price war successfully; improved salaries, working conditions, and product quality; and defended our editors and journalists against all comers seemed, for a time, to have been forgotten. I was deemed to be a crook and compared to Robert Maxwell, who had apparently committed suicide at sea in 1991 after looting the company pension plans before his company went bankrupt.

  The unseemly joy that so many seemed to take in the thought of me incarcerated in America was slightly unnerving. I reread de Gaulle’s description of the fall of France, and excerpts of The Bonfire of the Vanities, to try to gain both a historian’s and a novelist’s insight into how to cope with a sudden, overwhelming rout and collapse, when, in de Gaulle’s words, a slope becomes a fall.

  Most of the people who knew me at all well in the United Kingdom remained solicitous and supportive through all the travails that followed. But the press, whose members I had always treated with consideration, continued to attack in the vilest and most relentless assault I have seen on anyone entitled to the benefit of any doubt about his conduct. Such reflexive, resonating, widespread antagonism was unnerving and contagious.

  Because Barbara was a journalist and I was steeped in the North American tradition of limited or no social stratification, we often had journalists in our home and treated them hospitably. I also did many personal favours for journalists who were having marital, health, or financial problems, sometimes structuring their incomes to help them with divorce settlements and extending health and pay benefits far beyond what was legally required. Some remembered such consideration; some did not.

  A special case among British journalists was Elinor Mills, a Telegraph journalist who had recently been raided by the Sunday Times. She was the stepdaughter of the psychiatrist I had seen in the late 90s, at Barbara’s request when she had urged me to get confirmation that my proposal of marriage to her in 1991 was rational. We needed to round up the numbers for a dinner following a Sotheby’s board meeting, and Mills was one of those recruited by Charles Moore. I had not met her before. When it was related to one of the principals of Sotheby’s that there would be someone present who was about to start at the Sunday Times, I was urged to disinvite Mills. Mrs. Taubman didn’t want any press people other than those I could vouch for from the Telegraph and judged that a departing employee didn’t make that cut. After some unsuccessful remonstration, I did so – with lengthy apologies, because disinviting an innocent guest was a horrid thing to do. The whole matter quickly got into the press and I apologized again. We sent a gift and a note, and I corresponded with Mills’s stepfather. I confessed what I considered to be the inappropriateness of my action at the Brompton Oratory.

  When the problems of late 2003 arose, Elinor Mills came forth to the press and again retailed the entire episode to a very receptive world media audience, this time blaming Barbara, who was completely unaware of the disinvitation of Elinor. My conduct was universally condemned. I agreed with the criticism but was less delighted that such behaviour was represented as not untypical of me. I even replied, unusually, to one Toronto reporter who telephoned about it, and I said that Elinor Mills was correct, that I had behaved disgracefully, that it was aberrant, and that it relieved my conscience to be saying so. Nonplussed, he asked if this was on the record. I assured him that it was and asked him to print it verbatim. He didn’t; apparently, a statement of conscientiousness was not what his editor had had in mind.*

  I do not believe in false, extorted, or unspontaneous allocutions such as Radler’s, which demean the spirit of confession and repentance and reduce justice to corruptly procured self-humiliation.

  Throughout my conscient life, I have been, within reason, a person of law and order, as long as justice is tempered by mercy when advisable. I have been accustomed to punishment for misdeeds since my earliest years, and while fear of retribution has rarely been a deterrent to me, I have never resented its application when I have misbehaved, including in these dolorous events.

  I had not behaved dishonestly and had relied on well-paid executives and professional advisers to do their jobs properly. But I should have been more suspicious of Radler and more thorough in following up after Atkinson and Kipnis, both overworked and neither a commercial specialist. I certainly had a right to expect better from them, but the buck stopped with me. More important, I had publicly scorned the corporate governance zealots, without any idea what inroads they had made legally and how easily they could undermine my position as controlling shareholder and director.

  My moral and practical objections to the zealots were well founded, as subsequent events, especially their ruination of our companies, demonstrated, but my pride and haughty spirit were of the nature that often leads to a fall. As years went by, more and more companies substituted obsequious grovelling to the fund managers, corporate governance zealots, and shareholder activists for commercial performance. The focus was on a smokescreen of executive humility while executive authority was abdicated, delegated, or collegialized.

  From the start, I feared that I had hit a buzz saw and that any compromise with Breeden would make matters worse – and that in the end, I would have to endure the risk of judicial conviction and even imprisonment before I could live in peace again, so powerful and mindless were the forces against me.

  The fight would be not just to maintain morale through the prolonged and desperate struggle, but to retain faith that the evil afflicting me was not omnipotent. Through the terrible darkness that has followed, though there were many troubled nights and anxious days, I always returned to my belief that whatever my failings, my honesty would ultimately prevail over malice. However excruciatingly it unfolded, there was no moral or practical choice but to fight it out to the last inch. It was terribly difficult to discern any pattern in events. Providence intervened again and again to prevent my complete annihilation, but never in year after year sufficiently to set me free from the awful persecution.

  Mine was the fate many people enjoy seeing inflicted on apparently overconfident, powerful, even glamorous people who seem to be too much enjoying themselves. Much of it was envy and the aesthetic pleasure of a sudden exposure of the weakness behind an imposing facade; pride quickly crumbles into dust. It is an amusing, gratifying, even reassuring spectacle. I couldn’t proclaim to the world my merits as a person; I had to seize this frightful challenge as an opportunity to try to demonstrate t
hem.

  In the rugged world I had inhabited, I received much of what I deserved, and took my lumps as I always had, but not when the attack was against my honesty, which was, in fact, unimpeachable. That was unjust. It was in rebellion against that injustice that the resistance within me arose and guided me through the very difficult years ahead, saying in self-reassurance, as the French Maquis in the Second World War had done, “The night will end.”

  My book launch in Toronto began with two very civilized interviews, one at the CBC with Michael Enright and another with the very cultured Robert Fulford. The next morning, at the flagship Indigo bookstore, I moved in a unit surrounded by scores of journalists. My old friend Heather Reisman, owner of the bookstore chain, handled it magnificently. Once I got to the front of the store, questions were on Roosevelt only. I signed three hundred books. We had a quiet lunch, after making our way through the pack complete with reporters asking if I did not, as a practice, “suck the blood out of companies” as one of them said, and asking whether I had committed fraud and would, inevitably, go to prison.

  Just for a moment, I rose to the bait and unwisely pointed out that the stock was rising. My actual words were that I had made “$50 million yesterday. This is a flame-out I could get used to.” The journalists were there to get precisely that sort of ill-advised remark and I made their day. What they could not know was that I had been trying for a long time to put some upward pressure under the stock price and that although this was never going to have been my idea of how to do it, at least the stock price was rising. And we could all be happy for that. Needless to say, from the moment after I said it, I regretted it. The rise in the stock price was attributed to my ejection as chief executive, said my questioners, debating with me. I replied that I thought the prospect of sale was more of a ratchet than any skepticism about the outgoing management. I also pointed out that the underlying value had been created by the exiting management, not by Tweedy Browne and the directors who had approved what was now the subject of controversy.