Posted on 09/01/2010 11:58:15 AM PDT by Rummyfan
A year or so back, in the lobby of Fox News, I was approached by a gentleman who introduced himself as a member of Conrad Black’s legal team. That doesn’t narrow it down very much. There’ve been so many of them over the years: Canadian, American, young, old, rough and ready, bespoke and urbane, incompetent and . . . well, marginally less incompetent. “Good news,” this one told me. “We’re really pleased with the way things are going on the Supreme Court appeal.”
“That’s great,” I said, forcing a smile and feeling the way the Indian Foreign Minister must have felt when President Ahmadinejad told him not to worry because everything would be hunky-dory in two years’ time when the Twelfth Imam would be showing up. On balance, the Twelfth Imam seemed more likely to ride to Mahmoud’s rescue than the U.S. Supreme Court to Conrad’s. I’d been in Washington a few days earlier and various legal “experts” had derided Black’s SCOTUS appeal as a pathetic but characteristically self-aggrandizing last roll of the dice that was bound to come up snake eyes.
The federal justice system is a bit like one of those unmanned drones President Obama is so fond of using on the unfortunate villagers of Waziristan. Once it’s locked on to you and your coordinates are in the system, it’s hard to get it called off. Three years ago, during his trial in Chicago, I suggested to the defendant he’d be better off saving his gazillions in legal fees and instead climbing under the tarp in the bed of my truck and letting me drive him over the minimally enforced Pittsburg-La Patrie border crossing to Quebec and thence by fishing boat to a remote landing strip on Miquelon where a waiting plane could spirit him somewhere beyond the reach of the U.S. Attorney. Estimated cost: about a thousandth of what he’d spent on lawyers to date. P’shaw, scoffed Conrad, or ejaculations to that effect. He was not a fugitive but an innocent man, and eventually he would be vindicated by the justice system of this great republic.
This kind of talk persuaded his American friends that Conrad was out of his tree. Guilt? Innocence? What sort of nut subscribed to such outmoded absolutisms? If Black had just cut a deal, sighed Richard Breeden, the $800-an-hour special investigator brought in to “clean up” Hollinger, all this could have gone away years ago. When the U.S. justice system comes a-calling, the sane response is: What do I have to do to get you guys to piss off and screw over someone else? For former governor Jim Thompson, former ambassador Richard Burt and former woman d’un certain âge Marie-Josée Kravis, the star directors of Hollinger’s audit committee, it took going on the witness stand and making a fool of yourself for a couple of hours by swearing that, even though Black’s various non-compete fees had all been declared right there in the documents they’d signed their names to, it would obviously be entirely unreasonable to expect a busy person such as yourself actually to read the boring old paperwork rather than just append one’s John Hancock, thank Conrad for another excellent lunch, and then cash your cheque for a little light directorial oversight. They were embarrassing performances, but the day ends and life goes on. Black’s lifelong business partner, David Radler, eventually cut his deal, too. Nothing personal. That’s just the way the system works.
Conrad Black didn’t want a deal. He wanted justice.
He will never get his life back, and he will never get his company back, Richard Breeden’s “cleanup” having destroyed it. And, that being so, he will never get real justice. But through sheer doggedness he has demolished 99 per cent of the case against him. The US$400 million he was accused by Breeden of looting from Hollinger was down to US$60 million by the time the trial began in Chicago. He was found guilty of stealing US$2.9 million, which is less than one per cent of what Breeden accused him of, and indeed about 1.5 per cent of the US$200 million Breeden’s “investigation” had cost the post-Black regime at Hollinger by the start of the trial. Of the 19 original counts against him, Conrad was convicted of just four. The government lost on all the eye-catching tabloid fodder: Barbara’s birthday party, taking the corporate jet to Tahiti. The government won on three counts of “mail fraud.” But winning 80 per cent of the case isn’t enough. No matter how remorselessly it shrivelled from US$400 million to US$79 million to US$60 million to US$2.9 million, what was left was still enough to send Black to jail.
Nevertheless, he pressed on. And last week he won a huge victory. The Supreme Court voted unanimously—nine-zip—that the 28-word vaguely drafted “honest services” statute used by Conrad’s prosecutors had been applied too broadly. Rather than striking it down as unconstitutional (as three justices wished), they narrowed it drastically and declared that it “criminalizes only schemes to defraud that involve bribes or kickbacks. That holding renders the honest-services instructions given in this case incorrect.” They didn’t overturn Conrad’s conviction but sent it back to the Court of Appeals for “further proceedings consistent with this opinion.” Which presumably means that the presiding judge, Richard Posner, previously sneering and contemptuous if remarkably uninformed about the basic issues, will at least have to be less sweepingly dismissive second time around.
Most of us have heard the one about the defendant who says, “It wasn’t me, your Honour. I was out of town that night. And anyway he started it.” In essence, that was the strategy of the prosecution. Among many procedural advantages enjoyed by the government, they can advance multiple theories of the crime and invite the jurors to pick whichever tickles their fancy. The first theory was outlined in the prosecution’s lurid opening statement. “Bank robbers wear masks and use guns,” Jeffrey Cramer told the jury. “These four, three lawyers and an accountant, dressed in ties and wore a suit.”
Don’t ask me why they had multiple ties but only one suit. It’s only one of the more obvious flaws in the theory. The real problem is that the prosecution could produce no victims of this louchely tailored heist. The companies that bought the Hollinger papers and paid Black’s non-compete fees were entirely indifferent on the matter: they looked on it as standard practice and part of the overall purchase price. As for the aggrieved minority shareholders who set in motion the Hollinger meltdown, they were nowhere in sight. Whatever their original fantasies about “realizing the value” of the company’s assets, by 2007 they understood that Barbara Amiel’s birthday party was chump change (US$42,870) compared to the cost of investigating Barbara Amiel’s birthday party (US$200 million). Had Conrad thrown Barbara a birthday party at La Grenouille every night of the week for 12 years, it still wouldn’t have added up to what Richard Breeden and the stooges installed at his behest spent looking into it. By the time Black and Co. were hauled into court, the “victims” were at least as furious with the post-Black management and the government.
Hence, the prosecution’s alternative theory. To modify Jeffrey Cramer, the government had only one suit but multiple pegs. Their second peg was the far vaguer theory of “honest services,” a phrase the feds used repeatedly throughout the trial. “Honest services” did not require the government to demonstrate any financial harm to anyone, only that the shareholders had been deprived of the aforesaid “honest services.” Whatever that means. The Supreme Court has now ruled on what it means: depriving shareholders of honest services requires participation in a scheme involving “bribes or kickbacks.” Neither of which Black and Co. took, or were accused of taking. In other words, the Court has invalidated one of the government’s two theories of guilt. Was it the one on which Conrad was convicted?
Hey, who knows? The jury was not required to say upon which of the government’s competing mail-fraud theories it was convicting the accused. Conrad’s position was well summed up by Seth Lipsky in the Wall Street Journal:
“Imagine being told you are going to jail for either A or B and then discovering that B is not a crime.”
Did the jury convict on A? I doubt it. B, as improperly advanced by the government, sets a far lower bar, requiring little other than that Lord Black of Crossharbour strike you as arrogant and well-fed and earning far more money than you. But, like I said, who knows? Your guess is as good as mine, or Patrick Fitzgerald’s, or Judge Amy St. Eve’s, or the Appeals Court’s, or the Supreme Court’s. But that’s all it is: a guess. And a guess doesn’t sound a lot like “beyond a reasonable doubt.” At the bare minimum Black is entitled to a new trial. Whether or not the government has the stomach for a return match is unclear. All the sexy stuff’s gone—the bazillions of dollars, the racketeering, the accusations of heated towel rails in Conrad’s Park Avenue apartment, the dusky grass-skirted Tahitian maidens dancing on the sands under a sultry Pacific moon as the Hollinger jet descends to shower them with looted greenbacks. All gone. Patrick Fitzgerald would be trying to win a lousy US$2.9-million “mail fraud” case in which there are no victims.
Or at any rate no victims who haven’t been even more comprehensively mugged by the post-Black cleanup. The worst you could say about the old Hollinger is that it had a sluggish share price. The successor company, under a man Conrad Black called a “septuagenarian banana marketer,” had no share price, because the new management ran it down to a couple of pennies, and then it ceased trading, filed for bankruptcy protection, and was eventually sold last year for US$5 million.
Five million? In 2000, Hollinger sold just the allegedly worthless money pit of the National Post plus the somnolent Southam dailies (the Calgary Herald, Montreal Gazette, etc.) for US$3.2 billion. It was, at the time, the largest corporate deal in Canadian history, and the last 10-figure sale the North American newspaper industry will ever see, and for his pains Conrad was investigated for seven years and then sent to jail. In 2009, after Tweedy Browne, Richard Breeden, Patrick Fitzgerald, the banana tallyman and their talentless placemen had worked their healing magic, the entire company was sold for US$5 million.
Thank you, “corporate governance.”
But, if the case against him has shrivelled, so too has Conrad Black. The princes and prime ministers who graced his home in London are gone for good. So too are those oddly insecure American A-listers, the former secretaries of state and whatnot who decamp en masse at the first whiff of scandal. For the last few years, he’s been down to what George Jonas calls his “foul-weather friends.” More than the emptying of his Rolodex has been the narrowing of his horizons: a man who once chaired convivial summits at which Lord Carrington would muse on whether NATO needed a new sense of purpose and Zbigniew Brzezinski would report on recent developments in Central Asia has spent the last half-decade immersed in soul-crushing trivia. One balmy night during the trial in Chicago, we walked up North Michigan Avenue after dinner and he talked about the book he was planning to write. And, gently, I wondered whether there would be that many takers for a detailed tome on how the SEC threatened Jim Thompson with a Wells letter or what paperwork David Radler signed off on when he sold the Jamestown Sun. “No, no,” said Conrad. The book would have a far bigger theme: the grotesqueness of the U.S. justice system, the metastasization of narrowly drawn laws into all-purpose catch-alls, America’s post-Sarbanes-Oxley regulated-to-death business environment . . .
“Hmm,” I murmured. Everything he said was true, but it seemed unlikely that American readers would accept a Canadian magnate and member of the House of Lords as a typical victim of the enumerated evils. Yet Conrad has made his case and the Supreme Court has agreed with it. Whether or not it has come too late for him, ending the abuse of the “honest services” statute is a signal service by Conrad Black toward rolling back a de facto “criminalization of business,” to dust off a phrase I used at the time.
Who are the real “bank robbers” here, in Jeffrey Cramer’s phrase? A malign combination of regulators, prosecutors and “corporate governance” fetishists with no equity in the company hijacked Black’s life’s work and reduced it to a charred ruin in half a decade. Whatever the ills of the market with its robber barons and buccaneering capitalists, the government “cure” is worse. Too many people who should have known better fell for the narrative of Richard Breeden and Patrick Fitzgerald, because they found Conrad pompous, or resented Barbara’s shoe collection, or whatever. Now that the Breeden version has been 98.5 per cent discredited, the Wall Street Journal has apologized to Lord Black in an editorial headlined “The revenge of Conrad Black.”
It sounds like The Count Of Monte Crossharbo. But not entirely. For one thing, Conrad’s still in prison. For another, he’ll have to be content with belated vindication rather than the pleasure of hunting down his tormentors and submitting them to sadistic and humiliating deaths. Still, if he wanted to write it up as a roman à clef, I for one wouldn’t blame him. The fraud here is the ersatz justice of “corporate governance,” and the robbery is the theft of one of the world’s great newspaper companies from the man who built it.
I have a small business and this is exactly the reason I intend to keep it that way. If I grow, the government might notice me. I certainly do not wish to be noticed by the government. If I keep small enough, I won’t be worth their while to steal all I have since it appears I have so little. I may just cruise under the radar. Unless you are tight with the right people in the ruling class, amassing wealth just makes you a target for those in power who wish to steal or extort it from you.
One reason why you are not seeing any recovery is the fact that this administration is the most anti business, anti wealth, anti profit, anti success, anti Constitution, anti free market, anti free enterprise and anti American administration in our history.
Black was a crook who packed his — HIS — board with other crooks and cronies he could count on not to ask rude questions. The whole Hollinger organization stank, including the Speccie, which I sadly had to give up because it had been transformed into a neocon rag.
YES...what YOU said....I’m in the midst of trying to structure a new biz....and thinking about setting it up as a Shareholder only business....ever heard of this?.....paying dividends only.....
Newspaper companies? I thought he owned Rearden Metal.
hallelujah, Mark is writing again!!!
Agree or disagree with him, but you have to admit Steyn has one hell of a way with words (and I cannot read this article without hearing his british accent)
Every time I read him or listen to him on Rush I feel like I have gotten smarter.
Not to be pedantic, Mark is Canadian with a Belgian mother.
Yes. What you said. I couldn’t have said it better. I read on another thread that you are working in Reading. Is that home or did you travel in to work there? I live about an hour from there and I did not realize it was such a rough city.
There are striking similarities. Life imitating art.
Still - a wonderful analysis, written with Steyn's usual wit and brilliance.
In case anyone has not figured it out yet, federal "prosecutors" are not out for "justice." They are out to make a name for themselves. They have the power to make "deals" that, if a defense lawyer tried to employ, would be illegal and a scandal.
Was her name Chloe, and did she have webbed feet?
Black was prosecuted by the Bush Justice department.
Fitzgerald is an out of control maniac, who needs to feel the sting of his own hairbrush on his backside.
He was, but the same federal power mad nut bags are still controlling the levers of "justice" (which means no justice at all).
Also, the other posters point is still well served, because I only see Eric Holder's gang as being more out of control.
Fed prosecutors can lie, play games, change the rules in mid stream, and do anything else they want to do. If you are in their sights, kiss everything goodbye. They will ruin you, charge the taxpayer, and hold a news conference to congratulate themselves and their staffs.
Conrad Black is a genius who built an enormously successful business, which was then plundered by the US “Justice” system.
For such poetic justice, look up Genrikh Yagoda or Nicholai Yezhov.
I am just here for work - one more week, I think
It is not very nice here at all
Lancaster PA is about a half hour down the road and it is very nice there.
Alexander Orlov, also Jewish by birth, attributed the following conversation to Yagoda during his last days at the Lubyanka prison before his execution. When asked by his interrogator if he believed in God, Yagoda replied, "From Stalin I deserved nothing but gratitude for my faithful service; from God I deserved the most severe punishment for having violated his commandments thousands of times. Now look where I am and judge for yourself: is there a God, or not..."[11]
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