Conrad Black

by A Matter of Principle

  Finally, it ended. The judge read the fifty-six pages of instructions to the jury, clearly enough but with no special emphasis on reasonable doubt and with a great deal of emphasis on fiduciary responsibility, to open the door for an honest services guilty finding. The different U.S. judicial circuits were divided on its interpretation, but Judge St. Eve, following the precedent in her circuit (the seventh), instructed the jurors that they were free to convict on honest services even if there was no economic harm to the company, nor any evidence of intent to harm. Breach of fiduciary duty, corrupt intent, and materiality were required. After Radler testified that the American Publishing payments were redirected management fees, this became very important. Defence counsel did not ask for a verdict form, which, in the event of conviction, would require statutory specificity on the grounds. Research had shown that such a form increased the likelihood of a guilty verdict. They relied (mistakenly) on the right to require a poll of the jurors if any guilty verdicts were returned. Thus, on three of the counts, jurors could find any of the defendants guilty without specifying which was the offense, and different jurors could find the defendants guilty of the same charge for different reasons.

  UNSURPRISINGLY, THE LEGAL PROFESSION formally congratulated itself on what had just taken place. The judge made her little speech: “I want to tell the lawyers in here what a pleasure it is to preside over a case and be the judge on a case with such highly skilled lawyers across the board. The professionalism that you have brought into the courtroom, as well as your legal skills, are appreciated and it is a pleasure to be the judge on such a case.” The marshals’ mouths moved in synch with her words. They were clearly familiar with the homily.

  Pat Tuite, author of the remark to Barbara and me that a trial is entertainment for everyone except the defendants, rose to take a bow for the cast: “And we want to express our pleasure to you for making this such a pleasant experience. I think I speak for all sides, Judge.”

  Eric Sussman caught the bouquet and returned it: “You do.”

  Tuite took the encore: “And we’d be glad to appear before you in any other case.”

  Judge St. Eve responded: “See you back here.”

  A last moment of shared jollity from Gus Newman: “I don’t know if she’ll admit me again!” General laughter all round. Rarely had I found the legal cartel so nauseating in its misplaced self-praise and conviviality. Safer and Greenspan, to their credit, abstained. Then the court rose on the afternoon of June 27.

  I went back to the hotel for a nap, pleasantly interrupted by Julie Nixon Eisenhower, calling to thank me for my book about her father. Her last words to me were: “Justice will prevail!”

  Alana turned twenty-five on June 28 and we had a rather successful party for her, with the Boultbees, and Genson’s flamboyant driver, who had got us to court on time every day for more than three months, and some of the younger lawyers. It started with dinner at an excellent French restaurant near our hotel and moved on to a racy nightclub. I walked back to the hotel, but the owner of the nightclub, a professed admirer of mine, had me escorted by the formidable young Carl Davis, the tenth-ranking heavyweight prizefighter in the world.

  There wasn’t a great deal of social life in Chicago for us, and Barbara, especially, didn’t feel much like socializing. I had gone out to dinner most nights during the trial, often with Mark Steyn, but there were few people left in Chicago with whom I had that kind of a relationship. But during the trial, as has been mentioned, friends came a great distance to have dinner with us. It was a great comfort having the Jonases on the same floor of our hotel for a good part of the trial, until nearly the last day. This included Maya Jonas’s lovely seeing-eye black Labrador, the cheese-eating Daisy. It was almost like home, dropping in for a nightcap, and relieved the severity of the trial regime.

  Tiny ceremonies of continuity throughout had reminded Barbara and me of what normal life was like: every morning she had put cereal in my bowl, though I often did not eat it until I returned after five o’clock. She bought a folding shopping cart and would walk weekly to do grocery shopping at the Treasure Island Food Mart. Even in such a modest gesture there reposed the hope and the conviction that we would again live like normal people and not constant targets of misguided prosecutors and all the avaricious litigants and malicious journalists who surged at and besieged us. I kept repeating, “The night will end,” but it often required prodigies of faith to believe it.

  I walked almost every night along the splendid Oak Street Beach north of my hotel, and was always greeted by many anonymous well-wishers. The general tenor of press comment in Canada had turned quite positively, faced with the evident poverty of the government’s case. The Chicago media – where we had initially feared a mugging, especially from the Sun-Times, whose management was quaking in their shoes in contemplation not only of our acquittal but of the shambles they had made of the fine assets we left them – were fair. (Although Mark Steyn was fired mid-trial by the Sun-Times, for being too favourable to me, that paper played it fairly straight coming through to the end of the case.)

  We all thought we had won the case, or rather I thought we all thought we had won the case; Alana subsequently told me she thought we would lose something, and Barbara, faithful to her profound rabbinical pessimism, later told me she thought we would lose on three or more of the counts. Once she saw Cramer in his opening, careening around the court room, raving about bank robbers, “I knew we hadn’t a chance.” (I had thought his performance so over the top and off the wall, it would backfire.) The hostility of both of them to Genson and especially Greenspan was very high. I spent a great deal of time trying to preserve civility in our camp. I did not want the press getting hold of internecine problems, though Mark Steyn, a surpassingly alert reporter, apart from his other talents, had a pretty good insight into what was happening.

  Alana felt that Genson was courteous and oddly likeable, and that he was out of his depth but had done his best and worked very hard. Alana and Barbara both felt that Greenspan was a disappointment.

  Up to a point, I shared their view. Greenspan had been very supportive in the early stages as the world I knew was crumbling, in 2003, and graciously came to Chicago to sit with me at the SEC as I invoked the Fifth Amendment in December of that year. He was invaluable when Williams & Connolly flaked off in 2005. He had underestimated the impact of health problems on his physical and intellectual stamina in a long U.S. trial. He was casual about his health and on one night fell into a diabetic stupor onboard a chartered plane in Toronto after having been with his daughter on her birthday at a big occasion in Toronto. He was cross-examining the next day and the plane had to be held late at night while my driver careened around trying to find a convenience store that had the food to overcome his condition. He had not done enough to prepare himself for U.S. courtroom procedure, and left us for a time as laughing stocks at the defence and prosecution tables.

  He rendered great service in tearing down Kravis and Thompson, when other defence counsel were still pussy-footing about trying to pretend that I was the only person on trial. Those witnesses and their testimony were carried out and burned, and their ashes flushed into Chicago’s miraculous sewer system (like everything else in that muscular city, like the pectorals of a boastful teenager, the biggest and best water purification system in the world).

  He did well with Creasey, and adequately with most of the others, but courted disaster with Radler before finishing well. His presumption that he could just slide into U.S. procedure like a duck entering a pond was mad. He was often plodding and obtuse, and unnecessarily antagonized the jury. He rarely asserted himself as chief counsel, never grasped the larger canvass the case required, to make comprehensible to the jury how this shareholders’ dispute escalated as it did and became a Breeden power-grab. He was immoveable in clinging to establishing reasonable doubt about the allegations, even after it was clear to George Jonas, Marc Martin, Ron Safer, and others that we had won that argument on fraud but no
t necessarily on honest services. He ignored my theory that we would have to explain in outline how, mistakenly and for discreditable motives, it came to be a criminal case at all, other than with Radler alone. It was terribly exhausting and frustrating to remonstrate with counsel all the time. The only way to get anywhere was to side with one of them on one of the many issues being disputed between them and extract a concession in return for tipping the scales. It was a daily return to freshman model parliament. Greenspan seemed as concerned with his own public image as with the case, as if the first did not depend on the second. He had promised a Churchillian performance, and did not come close to delivering one.

  Greenspan would tell the Globe and Mail in an interview published on October 3, 2009, that he regarded his performance in our trial as a victory, taking some credit and vindication in the progress of my counsel who succeeded him, and implying that I had been responsible for strategic errors, a bit rich given that he would ignore almost all my suggestions (and having already falsely blamed my wife for intruding in the case in a National Post interview).

  He had been an able lawyer, a genuine friend, and a true believer in the right of all to representation. The deterioration of such a man is objectively sad, and is made more so by the inelegance of his acts of denial and displacement of responsibility for his own shortcomings and aggressive paranoia. And it is aggravated by the fetid atmosphere of toadyism in his entourage of worshipful followers. Withal, he assisted me vitally in time of dire need, played a vital role in severely damaging the prosecution case, and was often a very entertaining sidekick. His time is passing; I wish him well.

  Greenspan had selected Genson, a man whom I liked but who was devoted altogether to creating some doubt. He was quite effective when he caught Sussman in his many errors and sat, spread-legged in his chair, and crowed, “Objection, Judge!” (Because of his condition, the judge did not expect him to stand.) But when he had to make serious and coherent argument, he became the victim of what Dr. Johnson called the “disingenuousness of years” and incomprehensibility sometimes resulted. George Jonas perfectly described the chipper smile of satisfaction that he struck up when convinced that he had confused his interlocutor, without, as he thought, making it obvious that that is what he had done. George thought him “an obfuscatory shyster.” Toward the end of the trial, I rarely knew what line Genson was going to take, what witness was being called, and how they were being prepared – if at all. Had he accepted some of the help on hand from the younger lawyers and discussed with me his closing remarks, he might not have had what he (accurately) described in court as his “4.30 p.m. nervous breakdown.”

  There was a melancholia about them. They both barricaded themselves from their own clients and colleagues, Greenspan by vanishing at various times during the trial and refusing to communicate; Genson by refusing to reveal his strategy to the client or colleagues, as if we were all opponents in a game of whist. Both, along with the eighty-year-old Gus Newman, were obviously near the end of their serious careers, and Greenspan had so failed to forge any relationships, he was lonely in his hotel. (He had had to move hotels because, he claimed, Jane Kelly had failed to renew their status at “the urban sanctuary,” and this contributed to the end of a fifteen-year professional relationship between them. Jane was, however, shortly after appointed a judge, which, from what I have seen, will raise the standards of fairness of the Toronto bench.) Greenspan had to import his daughter from Toronto to go to movies with him in the evening. “No one wants to hang out with him,” as one of the younger lawyers put it.

  A TENSE TIME ENSUED, as all waited upon the doubtful jurors. There were a couple of calls to hear jurors’ questions, necessitating running the gauntlet of the assorted media. Finally, the judge realized there was no point in subjecting us to that, and there was silence from the court for many days.

  The jury was deliberating on sixteen separate counts, including the three in which withholding honest services was the alternate charge in the fraud counts. The first count was the allegation against all the defendants of mail fraud because of a group of non-compete payments couriered from Chicago to Toronto. There was no possible doubt that such payments were routine in the industry, approved by the Audit Committee, and repeatedly publicly disclosed and discussed. The auditors and outside counsel were satisfied with all aspects of them, and the buyers, whatever their revisionism eight years later, after bullying from the Justice Department, wanted them and signed that they were conditions of closing. This was a straight attempt, retroactively, to criminalize normal and unexceptionable conduct, and to trump signed and disclosed contracts with extorted, ex post facto, oral testimony. The evidence revealed that as buyers we ourselves had paid obscure vendors non-compete amounts dozens of times, often a larger share of the purchase price than the payments objected to in this case. The implications of this attempt at criminal retroactivity were very serious for American business; if the prosecutors could do this, no businessperson was safe from having actions reinterpreted and charged as criminal, years after they were made public.

  Counts 2, 3, and 4 were mail and wire fraud charges against Mark Kipnis only, and concerned documents he sent related to various community newspaper sales. Mark had not profited a cent from the payments involved, and had only done what Radler, as chief operating officer, had asked him to do. Everyone in the court knew Mark Kipnis was innocent, and even Radler said so. These counts were just an effort to bludgeon him into a plea bargain. The prosecutors, in their blood lust for me, were, as is their unvarying tactic, knowingly trying to obtain testimony against the chief defendant by intimidation of a relatively vulnerable and obviously unoffending co-defendant.

  Count 5 was a mail fraud charge concerning the non-compete payment to David Radler of $4.3 million, in the sale of some small American newspapers to Community Newspaper Holdings Inc. (CNHI). The contract in question was binding, fully executed, approved by the Audit Committee, and disclosed publicly and in SEC filings. This was an assault on contract law. As Mark Steyn wrote: “To allow that a freely signed contract can be overridden by oral testimony from one party almost a decade after the event would be deeply damaging to the integrity of American business.”

  Counts 6 and 7 were mail fraud charges against all of us about the non-compete agreements with American Publishing. This was a division of Hollinger International and was relatively inactive at the time the payments were made. Breeden, the Special Committee, and the prosecutors all represented the payments as the defendants paying themselves not to compete with themselves. In fact, the non-compete agreements only came into effect after each of us left the Hollinger group, and were still in force at the time of the trial, and applied to all affiliated properties, including those in Chicago. This did not prevent the prosecutors from histrionically claiming that we paid ourselves generously not to compete with the Mammoth Lake (Washington) Times, a total canard, as they ought to have known. More important, David Radler had said, from the start, all the way through, and at the trial that these were unallocated management fees that he alone redesignated as non-compete payments, and did not testify that I even knew of this redesignation. They were approved as management fees and reap-proved as non-compete payments, and did not cost the company a cent, given that the management fees were not in dispute. There was no evidence, ever, none, of any wrongdoing related to these counts.

  Counts 8 and 9 concerned the CanWest transaction, which the government had originally charged against Radler and me, but withdrew in respect of us before the trial. They retained the claim that I had fraudulently included Atkinson and Boultbee as non-compete recipients. The prosecutors didn’t call anyone from CanWest, knowing that they would support the defence, as our evidence showed. These were the most substantial amounts Peter Atkinson and Jack Boultbee received, and the related charges were necessary to enable the government to represent them as sizeable profiteers in this great scheme to steal millions. These were among the shabbiest counts of all (wire fraud over a fax and mai
l fraud over a FedEx package). The government admitted that CanWest was an untouchable deal, that non-competes are standard in the newspaper business, and that the big recipients were unassailable, and they could not produce anything to contradict defence evidence that the payments to Atkinson and Boultbee reflected the wishes of the buyers.

  Counts 10, 11, and 12 were against Jack Boultbee and me, and concerned the so-called “perks” – the trip to Bora Bora, the dinner on Barbara’s birthday, and the acquisition by me of the apartment in New York. These allegations were all riddled with holes by the time they went to the jury. Creasey and Healy when cross-examined, and John O’Sullivan under direct examination, had pretty thoroughly discredited them. The company made a good deal more from me than the variable costs on the airplane for the trip to Polynesia and back. The dinner was obviously a business occasion, and immaterial, and if it were a benefit to anyone, it would be Barbara (although she did not, in fact, enjoy it). I paid a third of it personally, to cover any nonbusiness aspect, though told by Radler and others that that was unnecessary. The evidence had clearly shown that the company had defaulted on its obligation to renovate and furnish and decorate the apartment, that Healy had claimed to have researched it and attested to the fairness of the price, that the company had had only a partial interest, and that I had spent a total of $7.6 million on the apartment, counting renovations. These counts were wire fraud because of supposedly incomplete disclosure in the proxies (annual meeting voting forms sent out with the annual report), of the relevant years, based on the theory that I had benefited by more than $50,000 on each of the three events, and because I had supposedly wired a fraudulent amount when I sent my payment for the apartment to the company.