Conrad Black

by A Matter of Principle

  When Safer got to the December 2002 teleconference, when the counsel for the lenders asked about Audit Committee approval of the non-competition payments, he asked Radler: “Were you panicked?” Radler thought not. (If the payments were furtive and unapproved, the questions to Thompson and Kravis would have blown up Radler’s “scheme.”) “Weren’t you afraid that your entire scheme was about to be exposed?” Radler again wobbled very implausibly. The judge frequently told Radler to answer counsels’ questions.

  Safer had great forensic talents and always had a voice and countenance that burned with emotional sincerity. He moved all around the front of the room and always had his own exhibits and evidentiary documents in perfect order and at his fingertips. None of the prosecutors, or even the judge, won an exchange of repartee with him, as he always was quick but earnest, and had the knack of scoring his points without ever seeming condescending or belligerent. Over all, he was the most impressive barrister in the court. But my counsel did the most damage to the witnesses we had to destroy, and no other team had the will to destroy them.

  Mark Steyn’s splendid summary of Radler’s testimony, in his blog of May 17, was:

  Mr. Radler told the truth to the U.S. Attorney’s office when he said he lied to the SEC about telling the truth to the Special Committee about whether he’d lied to the Audit Committee about telling the truth about the non-competes.

  As to whether he lied to the court in Chicago by claiming to have told the truth to the court in British Columbia about whether he’d lied to Conrad Black by not telling him the truth about Todd Vogt, he was in fact telling the truth when he said the lie he told had been approved by his lawyer, whom he had no reason to believe was lying.

  On the matter of whether he lied to the court this week about claiming to have told the truth last week about not having reviewed the transcripts of earlier lies from 2003 to 2005, he was telling the truth when he said he would need to review the transcripts of last week’s lies before he could ascertain whether he was telling the truth about the transcripts of his previous lies.

  On the question “Are you lying now, yes or no,” Mr. Radler said yes, he would be lying if he were to claim to be telling the truth, but no, he told the truth when he said he was a liar. Also, both of the above, as he was not familiar with counsel’s use of the word “or” but had been advised it was a breach of attorney-client privilege, and neither of the above, as he would need to review transcripts of what he had said 30 seconds earlier as he had no recollection of whether he was telling the truth or lying at the time he began speaking this sentence.; which is a longer sentence than he’ll be serving at that British Columbia country club.

  It was to this farce, draped in infamy, that my associate of thirty-eight years had descended, and to which he had reduced our companies. As if in a trance, Radler was led away from the court by his handlers to await gentle imprisonment, a publicly admitted liar, thief, perjurer, squealer, and cheat. Everyone who witnessed it shared the resulting distaste, apart from the prosecutors, who got a good deal less from the witness than they had been sold by Radler’s counsel, when he procured his client’s golfing holiday and prosperity ever after with his doubtfully acquired assets.

  If it had been possible for Sussman to offer Atkinson and Kipnis acquittals, I suspect they would have been prepared to impute something unworthy, though not illegal, to me, but not, I think, total inventions. Fortunately, the rules did not allow Sussman and his co-sorcerers to make such an offer. The best they showed Kipnis, late in the trial, was three years in prison. So, finally, by the bungling of the prosecutors, which was all that tempered their zeal, and by the integrity of the other accused, we cobbled together a logically unanswerable case of innocence.

  Whether it would be so decided depended on the susceptibilities of a jury that was yet, in that distinctive elbows-and-shoulders, swaggering, blue-collar Chicago manner, apparently oblivious of its limitations. The jurors were flattered by the endless attentions of the judge, peppy and bright, but for all the world, she too was apparently unaware of the decadence of the system that generated this degradation of due process in which she served with such pert agility.

  * The 10k is the financial and related material in the annual report.

  † Due diligence is the research an underwriter and its counsel do to ensure accuracy before guaranteeing a prospectus and marketing the issue.

  [CHAPTER FOURTEEN]

  THE GOVERNMENT FOLLOWED the burnt-out wreck of their star witness with Jonathan Rosenberg of O’Melveny & Myers, the associate counsel, and, with Richard Breeden, co-author of the infamous Special Committee report. His firm had made about $50 million on this case, and he had a bigger vested interest than almost anyone in guilty verdicts. He followed much of the proceedings from the overflow room upstairs, so intimately entwined with the prosecution were the Sun-Times acting management and Breeden’s Special Committee. Rosenberg was brought in as if as he were an impartial expert witness. We had arranged with the judge that Rosenberg would not comment on my non-appearance at the Special Committee and that we would not cross-examine him if he did not mention me at all in his testimony.

  Rosenberg did imply high corporate wrongdoing, and at the lunch break both Eddies were flapping like Ibsen’s Wild Duck, swearing motions for mistrial and so forth, their and other counsels’ usual placebos. In fact, they negotiated a strong instruction from Judge St. Eve that none of this applied to me. It was one of her better moments at the trial, as she had refused to admit as evidence that I had declined to appear at the Special Committee at the time I went to the SEC in December 2003, and she rather eloquently emphasized my “absolute right to remain silent.”

  Rosenberg managed to avoid being torn to pieces like the government witnesses who came in with official rods on their backs (testimony in exchange for immunity or a plea bargain), but he didn’t seem to accomplish much, either, once it was established that he was a party profoundly in interest. I thought it a disgrace that not one of the counsel asked how much his firm had made from their relationship with the Sun-Times Media Group, but the legal brotherhood held firm and avoided so indelicate a subject as fees in spite of my pleading. In the corridor, Barbara and I passed Rosenberg, the caricature of a self-important former prosecutor, and Barbara managed to get to the word “shit” in her sentence as we came abreast of him, and she directed that word at him.

  After the break, Sussman demanded a sidebar and excitedly told the judge that “Mrs. Black uttered a derogatory word to Mr. Rosenberg in the corridor.” (I saw an instant transcript of these sidebars, meetings with counsel on the far side of the judge’s bench away from the jury, and inaudible to the court, on the monitor.) The judge asked what Sussman expected her to do about that. No coherent reply followed. Sussman was also running to the judge with some frequency about my having told the press no jury in the world would convict anybody of anything on the basis of Radler’s testimony, and my having told the Guardian, in an interview about Nixon, that the prosecution case “is hanging around their necks like a toilet seat.” (The Guardian had published excerpts of the Nixon book, and part of my deal with them was that I would give them an interview.) The judge asked Greenspan to ask me to be a little more restrained. Sussman could not take the needle for an instant, and it became a sport for many of the press and some of the defence group to send him up the wall.

  The government case dwindled after this. They brought in my former groupie, Hollinger International’s vice-president for investor relations, Paul Healy, on May 21 as their closer. His little porcine face was so puffy it made his spectacles seem smaller, like those of a Stalin apparatchik, a little Breeden of the future, perhaps. Cramer in his opening remarks had said that Healy, on my instructions, had “dummied up and lied” when he certified that I was paying a fair price at $3 million for the unit on Park Avenue. He appeared with an immunity from prosecution, and filled the transcript with a false revival of the apartment allegation. We established that the company had had
a contractual obligation to renovate, decorate, and furnish the unit and that I had volunteered to pay it myself after Healy claimed he was hearing some shareholders’ complaints about the unit.

  We also established that I had paid $4.635 million to this end, that I had the right to remain in the unit as long as I was an officer of Hollinger International, and that I could block any sale of it, which obviously lessened its market value to the company. In fact, the company had only a partial interest, especially as the building did not allow corporate owners above the ground floor, and I was the trustee for its interest. Sussman at one point tried to establish that we were obscuring the “substantial reimbursement” for the $4.635 million it was the obligation of the company to pay (as the FBI agent who signed the false affidavit which secured the seizure of my sale proceeds must have known). Under intense objections from Genson, Sussman was forced to admit that the substantial reimbursement for my $4,635,000 was $2,200. Never in the whole four-month trial was the brazenness of the prosecution more vividly revealed. It was one of Genson’s finest hours. The judge did not comment, but Barbara and Alana and I agreed when we returned to our hotel that we would have been in despair if my credibility had suffered such a blow before the jury. This largely demolished the apartment issue, and Healy remained as the witness for the playing of the audio tapes of the 2002 and 2003 annual shareholders meetings. Healy had never been at a loss for hymns of praise, and a number of utterly obsequious emails he sent to me were compared with elements of his testimony and remarks to the FBI.

  Healy appeared pretty much as he was: a maladjusted, scheming courtier, alternately fawning and snarling at the hand that fed him for so long. He was reduced to complaining that he had only made $10,000 per week even while he was clearly disloyal to the management. Mark Steyn recorded how he had flipped suddenly in late 2003 from my being his “favourite name-drop” to my instant, new status as a satanic figure, as he ingratiated his way into the entourage of Breeden, for whom he later worked, one of Breeden’s lesser acts of subornation.

  The battle with activist shareholders had first surfaced at the 2002 annual meeting of shareholders and climaxed the following year. We couldn’t see that the prosecution gained anything by playing the audio tapes of the meetings in court. I answered all questions knowledgeably and courteously (the Ruffo intervention where he called me a “thief” and I invited him to leave was excised). Healy had called my performance “brilliant,” and confirmed that in his testimony, and we felt that we did have much of the benefit of my testifying without any of the disadvantages.

  On May 24, Barbara and I returned to Toronto. Whenever I return to that house, I am instantly reminded of how much I have missed it. As it turned out, I would not be back for a long time. This was becoming a dreary pattern – of leaving a home not knowing when I would see it again, or not knowing that I would never see it again, as in both London and New York. We went back to Chicago on May 28, with Joan Maida and her sister and lawyer. She was preparing to rebut the obstruction charge, over the removal of the boxes. The government case was almost over.

  On May 29 came the painful episode of watching the video film of 10 Toronto Street. This building had symbolized a part of my birthright since 1959, when I had first visited it. It had become a symbol of the Canadian establishment, the classic, columned, graceful former Bank of Canada stone building in the shadow of taller buildings, and I had had my office there from 1978 to 2005. Being ejected from it at the request of Gordon Walker by Justice James Farley was one of the many immense humiliations I had suffered in this horrible debacle. I was almost impervious to anything, but the film of the building was upsetting.

  The infamous affair of the boxes was represented as the “corrupt removal” of material, contrary to a court order, and to impede the progress of a grand jury, SEC, or criminal proceeding in the United States. I had hoped that Greenspan would take on this count and George Jonas had begged him to as well. Though the charge was absurd, the penalties for conviction on this count could be very serious, and Greenspan knew the facts well, having already prepared the defence against any Canadian proceeding. (There was none.) The judge instructed the jury that no Canadian proceeding was relevant to this issue. But Sussman routinely implied and endlessly repeated that I had violated a Canadian court order, and despite my repeated interventions with Eddie Genson, this was not contradicted effectively. There had been no Canadian proceedings on this subject, and the endless implicit references to such proceedings by Sussman and Ruder, and instructions by Judge St. Eve to ignore such proceedings, incited the inference that I had already been found wanting in the local jurisdiction.

  All that was relevant to a conviction on this charge was my knowledge of any official proceedings in America and a corresponding intent to impede any investigation by removing documents. As my office had been open for months to one and all, with inspectors and lawyers rifling through all the files, photocopying and seizing masses of material, neither Joan Maida nor I could imagine that after all these months any document pertaining to events at least three years earlier would still be virgin material. I had stopped going to the office on any regular basis for some time: the swarms of intruders were too irritating. Anything I had wished to remove I could have taken out in a briefcase or my pockets at any time.

  Two pleasant security guards who spoke well of me personally were marched in to report the obvious, that they had seen me moving boxes. The film, some from new cameras, some from cameras I had had installed myself, supposedly made their case. A letter was faxed to Jennifer Owens (one of our Baker Botts Washington lawyers) on the day before the removal of the boxes, indicating renewed interest by the SEC in documents in that office. I knew nothing of that, as Jennifer and others would testify. Various documents were produced from the thirteen boxes of apparent significance to the case, and there were a number of agreed stipulations of fact on various subjects, including that I had handed over 124,000 pages of documents in response to five SEC subpoenas long before this incident.

  This was another area where it proved impossible to introduce evidence of the sleazy practice of the government. Sussman had threatened Don Vale with drastic consequences if he appeared as a defense witness, to attest that I had had his approval, as acting president of the company, to remove the boxes. Don later explained this to the judge in a letter, but it had no impact on the verdict. Sussman also threatened Joan Maida, but Genson refused to adduce this in evidence. Prosecutors and the FBI tried intensively to intimidate our driver in New York, Gus Pedernura, with threats against his tax status and his visa to enter and remain in the U.S. (from his native Argentina). Intimidation of witnesses are routine, and apparently insusceptible to response. The FBI effort to muscle Gus was presaged by Healy’s drunken telephone call to him late one Sunday night in December 2003, during which Healy hiccupped uncontrollably as he laid out his threats and blandishments. It had come to this: Healy as trail-blazer for the FBI in the bribery and intimidation of honest people, unsuspected at any point of anything improper, lest they tell the truth about the chosen target.

  The government finally rested on May 30. It seemed to all of us that they had not made their case anywhere beyond, or even near, the elimination of a reasonable doubt. Their witnesses who had attempted to incriminate anyone had all been torn down and exposed as liars.

  WE WOULD HAVE TO CALL SOME witnesses for our own counts – the New York apartment, Bora Bora, the dinner supposedly for Barbara, and the nonsense with the boxes. Beyond that, there would be some specialty and expert witnesses. We were quite optimistic. The defence kicked off with Jennifer Owens and Alex Bourelly of Baker Botts, who effectively extinguished any idea that I knew the SEC had any interest in my documents, beyond my full compliance with their five earlier subpoenas. Laurent Weisel, an able young lawyer at Sullivan & Cromwell, originally from Montreal, testified to the same effect a few days later.

  Joan Maida came next and was plucky and ingenuous, proud of sending out “Conrad Will Win”
T-shirts. Genson brought her through fairly well, and then Cramer set upon her, bullying and engaging in a good deal of gratuitous sarcasm. Unfortunately Joan had not been prepared by our lawyers with any thoroughness. Rattled, she gave some regrettable answers, never admitting wrongdoing, but in places defensive or argumentative. The truth would have served me well but wanting to avoid traps, she froze. She had no idea what I was doing on the film when I pointed at the camera. And she seemed to acknowledge that it was improper to remove the boxes. The jury was laughing at her. At one point she agreed that the watercooler gossip was that criminal charges would probably be laid against me. Genson failed to assault the relevance of such evidence.

  Being a shy person, Joan had not wanted to testify; the notion of standing up in court terrified her, and she did it only to help me. She was literally shaking in the corridor before going into the courtroom. Her sense of honour was outraged that I was being blamed for some low and cowardly act of hiding documents, which she knew to be false. Genson had sent her into battle with insufficient preparation. The problems with Joan’s testimony appeared to please Greenspan in some perverse way, as he had warned against calling her but had declined to give any assistance when she arrived in Chicago.