Conrad Black

by A Matter of Principle

  They are both great men, in their different ways, and their friendship, no matter how idiosyncratic, would be a matter of pride to anyone, as it is to me. I am sure that they will eventually see that it is not necessary to dissemble about our relations and that I have not thrown “it all away.” If our appeal is unsuccessful, they can share their “terrible sadness” with their country and aspects of its justice system.

  For such men and for the sake of happy days gone by, that could yet return, I offer the other cheek, but not unilateral verbal disarmament. They need only survive and retain their faculties a while longer, to see that my present embattled condition is not, as Bill wrote, “the end.” I wish that for them, and all other good things.

  UNJUSTLY INCARCERATED

  March 3, 2008

  The legal case involving me began as a factional dispute between groups of shareholders of Chicago-based Hollinger International. Some wanted the company broken up or sold for a quick gain. Others, including the largest institutional shareholder, Southeastern Asset Management, agreed with management. We had produced nearly $2-billion of capital gains for the shareholders in sales of U.S. community and Canadian newspapers. We foresaw the problems of the newspaper industry and were conducting an orderly withdrawal from it.

  To prevail, the dissident shareholders had to remove the controlling shareholder. To destabilize my position, they began giving hostile interviews to competing publications, and attempted to depress the share price. In the commercial atmosphere after Enron and other accounting fraud cases where billions were lost and tens of thousands of people thrown into unemployment, the most effective way to force out an incumbent management was to attack their integrity. The dissidents asked for a special committee, and I agreed at once. I believed any fair-minded investigation would lay any ethical considerations to rest. That has been my response to all serious examinations of our conduct, including the trial and the pending appeal from the remaining counts.

  The special committee seized control of the company when they represented that there had been $30-million of unauthorized payments to executives and to the parent company. I was horrified at the thought that any such thing could happen in a company where I was the chief executive, and retired as executive chairman. I felt that the buck stopped with me and that it was the honourable thing to do. I was prepared to do almost anything that was legal and ethical to help the company through these problems. Eighty per cent of those payments were found by the jurors to be legal and by the trial judge to be valid even by civil law standards. And 95% of what is left has already been judged by the Court of Appeal to raise “substantial questions.” All were legal and appropriate and I am confident that they will be judged to have been so.

  The special committee counsel, Richard Breeden, and the new CEO, Gordon Paris, asked me to remain as non-executive chairman. Mr. Breeden assured the directors, and then said publicly, that there was no evidence of wrongdoing by me. No evidence to contradict this view has arisen since, except what was given in testimony in exchange for a plea bargain and immunities from prosecution. The jurors disbelieved almost all of that evidence as extorted perjury in the routine operation of the U.S. plea bargain system.

  We reached a restructuring agreement on Nov. 15, 2003, to determine our future roles in the company. Within a few weeks, the special committee had violated six of the eight clauses in the agreement and had generated a great deal of fantastically hostile publicity for us. A presumption of guilt arose, and remains, though it has been diluted.

  I offered Mr. Breeden and Mr. Paris a number of proposals, including the sale of the parent, Hollinger Inc., to Hollinger International for preferred shares, and a first refusal on any bona fide offer for control of the parent company.

  Mr. Breeden and Mr. Paris replied by representing to the SEC that I was threatening the special committee, which I was not, and falsely admitting to wrongdoing and entering into a costly consent decree; launching a lawsuit against the former management, and removing me as chairman.

  I then contracted to sell Toronto-based Hollinger Inc. for $8.44 per share for all shareholders. The same buyers filed an SEC form 13D stating that they had expressed a willingness to bid $18 per share for every Hollinger International share. The Hollinger International shares have since descended from $18 to 94¢, almost a 95% decline. And the Hollinger Inc. shares, for which we bid again less than three years ago at $7.60 for each minority share, are now worthless, a 100% decline in value. Our successors have made every conceivable business blunder and have eliminated $1.85-billion of shareholder value.

  They have, however, taken good care of themselves. Mr. Breeden has pocketed about $25-million, plus $750,000 in each of the last two years for his completely redundant status as special monitor. Mr. Paris, who had no management experience, nor any knowledge of the newspaper business, made $13-million in three years, $17,000 a day, to deprive tens of thousands of shareholders of many hundreds of millions of dollars. The special committee law firm, O’Melveny and Myers, has probably made about $100-million on this account. The local Canadian plunderers of Hollinger Inc. have performed to scale.

  The next escalation of this factional struggle was the special committee report, in the late summer of 2004, which was foreordained to be a massive smear job designed to generate criminal charges. It was, and it did. We were accused of conducting a “$500-million corporate kleptocracy.” Almost all of that has already been determined to have been legal.

  The special committee report promised “greater prosperity and profits” at Hollinger International, and a recovery of $1-billion. The recoveries have been much less than the $200-million-plus the special committee and endless litigation has cost the company, while its capitalization has withered from$2-billion to $70-million.

  I believe that I have endured the most comprehensive international defamation I can recall in over four decades of close acquaintance with the media, and the special committee report was the tidal crest of it. I naturally sued the authors of the report for a very large amount, in Canada, where the civil tort of defamation is much less restrained than it is in the United States. Avoidance of facing those lawsuits is doubtless one of the reasons for the tenacity of the persecutors, who would be at risk in the event of full acquittals.

  Our offer to privatize Hollinger Inc. in early 2005 was supported by the staff of the Ontario Securities Commission, and by 87% of the minority shareholders who voted. But Mr. Breeden, as he happily told a Toronto newspaper, “lectured” the commissioners that they had to kill the offer because of our moral unsuitability. Even if there had been any truth to this, it was irrelevant to the offer, as privatizing Hollinger Inc. would not reduce the ability of the U.S. Justice Department to charge us if it wished. This was the death-knell for another $250-million of shareholder value, and a spectacular disservice by the OSC.

  Just before most of the charges were laid in this case, in October, 2005, these prosecutors seized the proceeds of the sale of our co-operative unit in New York, on the basis of an affidavit from an FBI agent, who signed that he was fully aware of the laws against perjury. The affidavit omitted any reference to the facts that the company had been obligated to pay for the renovation and decoration of the unit, and that I had done so, at a personal cost of more than $4.6-million.

  The seizure was conducted ex parte, with no notice and no due process, under the Civil Assets Forfeiture Reform Act.

  The jurors determined that that affidavit was mistaken (i.e. false). When we pointed out its deficiencies in our legal motion, the prosecutors laid the charges in this case, stayed other proceedings and froze almost $10-million owed to me. The action achieved its objective: Brendan V. Sullivan of Williams & Connally, one of America’s most respected trial lawyers, who was my chief counsel, was unable to take this case, because I was unable to provide him, for a time, after the New York seizure, with the retainer he required.

  In the climate created by these charges and the press reaction to them, I was unable to rais
e cash for the retainer any prominent U.S. lawyer would require for a trial of several months, without time-consuming liquidation of assets.

  The assistant U.S. attorney attempted to intimidate my mortgagee in Palm Beach by telling him that if the mortgage was renewed, he would prosecute his company in Chicago, for unspecified offences to be named later, and then told this court that I was in default on the mortgage and in breach of the bail terms. We won that skirmish.

  I was advised that no British or Canadian court would have extradited me after my money was seized in New York ex parte, on the basis of a false affidavit. But I never considered fleeing for a moment. I am not interested in staying away from lawful authority. I seek justice where it is available. And I still believe it is available in the United States. I would never flee any serious jurisdiction.

  As my counsel said in closing remarks at trial, the U.S. government became a tool in what was and remains a factional struggle within what were formerly the splendid companies that the defendants in this case, and others, built. The U.S. government and the sponsors of the indictments, and their acolytes in Canada, have destroyed these companies. The Hollinger earth is scorched, the shareholders wiped out, many of the employees laid off, but the factional war continues to the Circuit Court of Appeal in Chicago.

  There was no evidence to support two of the remaining convictions, and the only evidence, from the chief cooperating witness, was exculpatory. For the third count, the evidence was an uncorroborated allegation of a non-incriminating telephone conversation, which did not, in fact, take place.

  On obstruction of justice, it was in evidence that I completely complied with all document requests, that the boxes being moved as I vacated my office of 27 years contained nothing relevant to the case the SEC did not already possess. I had no knowledge of any further curiosity of theirs, nothing to do with selecting the contents of the boxes and knew nothing about their contents, and did not look at the boxes on the weekend they were in my home. I have never been accused of violating a Canadian court order, and did not do so, and ensured that I was recorded by security cameras I had had installed to assure that there could be no suggestion of my doing anything underhanded. We have a Toronto court to thank for the massive and misleading exposure that the grainy security film that caused me to appear furtive, has caused. We have the same court to thank for a number of other unjust decisions.

  This was what the prosecution described as a “unique, brazen, calculated, manipulative and complex” scheme, having initially called us all the moral equivalent of bank robbers, who had stolen $60-million in “money grabs.” The prosecution is at least correct in calling it a “unique” scheme. So, I suppose, are all schemes that don’t exist.

  It is a terrible thing to be falsely accused, and wrongly convicted, even of a fraction of the original charges, and unjustly incarcerated. For persisting in seeking the recognition of my innocence of these charges, I have been portrayed as defiant, or at least in denial. I defy and deny unjust charges, not the practical difficulties I have faced for the last four years and am facing now.

  I would qualify in political terms, as a reasonable member of the law and order section of the public. And as a conscientious and religious matter, I believe in the confession and repentance of misconduct, as well as in the punishment of crimes. If I had committed any of the offences charged, I would have pleaded guilty and asked for a sentence that would enable me to atone for my crime and assuage my guilt and shame.

  Some of the jurors, in post-trial comments, by e-mail and on television, where there can be no question of a journalist misunderstanding what was said, confirmed that there remained a reasonable doubt, but that a compromise was reached on acquittals and convictions, contrary to the judge’s instruction.

  One of the jurors stated that it should have been a civil case. So it would have been if the special committee report had not sold it to the prosecutors as a criminal case. And it would not be much of a civil case either. This is the criminalization of what was and remains a civil factional corporate dispute.

  My faith in the United States has inspired me to persevere, despite what I believe has been the prosecution’s insufficient respect for the Fifth, Sixth, and Eighth Amendment guarantees of due process, of the grand jury as an assurance against capricious prosecution, of no seizure of assets without just compensation, of speedy justice, access to counsel and reasonable bail. I have been besieged by various agencies of the U.S. government for more than four years, and I know of only one higher bond in U.S. history than the $38-million I have been posting.

  Thoreau wrote: “Under a government which imprisons unjustly, the true place for a just man is also in prison.” These charges, and the actions leading up to them, have been unjust. Most of them have already been found to be unjust. I cherish my liberty as all people do, but I am unafraid. I have faith in American justice.

  APPENDIX C

  It was with this extremely generous and gracious message that my very long and warm relationship with Henry Kissinger really resumed. I understood that he had been misinformed and explained that I was not the author of these problems. He volunteered that he had never thought I had committed crimes and with that we agreed to put it all behind us and never speak of it again. Unknown to me, he wrote generously on my behalf to Judge St. Eve in 2007. He is one of the most brilliant and witty individuals I have met, and has certainly earned his status as a world historic figure.

  February 17, 2011

  Dear Conrad:

  A mutual friend sent me your Valentine to Barbara. I was deeply moved. What has happened is a tragedy, and I hope it will find a definitive conclusion soon.

  On the strong advice of counsel, I could not make the statement suggested by your counsel. And it also seems to me wrong to deal with the resumption of friendship as a legal arrangement.

  Because the wounds are not entirely on one side, we should deal with the future and leave the assessment of what has happened to a personal conversation. Your major grievance against me seems to. be that, after months of hesitation, I voted with a unanimous board to accept a report written by people you had appointed. While neither of us can change the past, we can at least share the wish that this entire chapter in our lives had never occurred. For my part, I will never forget how you stood by me when I lost an eye and in its aftermath. I admire your courage and tenacity. Despite the bitterness that has developed, I have done what I could do to make clear my commitment to you. I wrote a private letter to the sentencing judge outside the legal process to make clear my views about your human qualities. I also offered to intercede with President Bush (with whom I had developed a personal friendship), but your counsel rejected the suggestion.

  I will be prepared to state, at any point, what I never doubted: that you are an extraordinary person; of fundamental decency; an important contributor to the thinking of our time; a sterling defender of freedom. And at one time a valued and trusted friend. This feeling will remain no matter what storms are ahead of us.

  You are going through an ordeal at the limits of human endurance. It is a pity for both our lives that this situation has arisen. But whatever happens, remember I consider you an important part of my life and of the future of free peoples.

  Sincerely,

  Henry A. Kissinger

  APPENDIX D: STATEMENT TO THE COURT, JUNE 24, 2011

  The statement to the court on June 24, delivered directly to the judge, eye-to-eye at close range, from memory and improvisation, was heartfelt and exact, and will stand as my last word on the subject. When I am at liberty in a few months, I propose not to speak or write of this protracted unpleasantness again.

  On the occasion corresponding to this four years ago, the fact that the counts that had survived the trial were under appeal spoke for itself, and I didn’t think it appropriate to say much more. As we are now back, one last time, in your court, at the weary end of this very long and fiercely contested proceeding, there are a few things that I think should be said.r />
  The prosecutors have never ceased to accuse me of being defiant of the law, of disrespecting the courts, and of being an antagonistic critic of the American justice system. Nothing could be further from the truth. I have obeyed every order of this and other courts, every requirement of the United States Probation Office, in this and other cities, and while I was its guest, every rule and regulation of the BOP, no matter how authoritarian. I have been and remain completely and unwaveringly submissive to legal authority, yours in particular.

  What I have done is exercise my absolute right to legal self-defence, a right guaranteed to everyone who is drawn into the court system of this and every other civilized country. All my adult life I have been a member of the moderate section of what is commonly called the law and order community, and I shall remain in it, whatever sentence you impose on me today. I always keep a firewall between my own travails and my perception of public policy issues; otherwise I would retain no credibility as a commentator.

  Your Honour, many years ago when I was a student and licensee in law in Quebec, I read a large number of cases from British and French courts, including the principle established by the eminent British jurist, Lord Denning, that “Parties coming to court must be prepared to practise what they are asking the court to approve.” The prosecutors have never ceased in this case to advocate respect for the law, and to accuse me of lacking it.

  But since that is an unfounded complaint, the real source of their irritation must be that as chief defendant, I have led the destruction of most of their case, and have successfully protested my innocence of charges of which I have, in fact, been found not to have been guilty. I understand their disconcertion that of the 17 counts they originally threatened or actually launched against me, all were either not proceeded with, abandoned, rejected by the jurors or vacated by a unanimous Supreme Court of the United States. But the problem is not my lawlessness; it is the weakness of their case. I have done nothing but uphold and respect the rule of law and the system of justice, in which my faith has never flagged.