Fallen media tycoon Conrad Black is about to end his colourful career with a 6-and-a-half year jail term for fraud and obstructing justice, writes Denis Stauntonin Washington.
By March 3rd, Conrad Black will exchange his Palm Beach mansion and celebrity friends for a low-security prison elsewhere in Florida and the company of convicted fraudsters and drug dealers. The fallen media tycoon will wake up at 6am every day and work for 12 cents an hour at chores such as washing pots and scrubbing floors, unless he snags a coveted job teaching at the prison school.
The fraud at Black's Hollinger International was meagre in comparison with other recent corporate crime cases such as Enron and WorldCom. But Black's international profile, his flamboyant personality and his famously lavish lifestyle ensured that his trial in Chicago was watched with keen interest and more than a little Schadenfreude.
Sentencing Black (63) to 6-and-a-half years for three counts of fraud and one of obstructing justice, judge Amy St Eve expressed astonishment that the media magnate, who gave up his Canadian citizenship to accept a British peerage, could have squandered his reputation in the name of greed. "I frankly cannot understand how somebody of your stature . . . could engage in the conduct you engaged in and put everything at risk, including your reputation," she said.
The son of a wealthy Canadian businessman, Black started buying newspapers in the 1960s, working with his closest business confidant, David Radler, to build up an empire that included dozens of publications in the US, Britain, Canada and Israel, including the Daily Telegraph, Chicago Sun-Timesand Jerusalem Post.
Owning the Telegraphallowed Black to make his mark on British society, where he cut a dramatic figure as a conservative ideologue who hosted some of the most colourful parties in London.
He appointed conservative heroes such as former US secretary of state Henry Kissinger and right-wing commentator William F Buckley to the board of Hollinger, which controlled his media properties.
Black's spending on himself and his wife, Barbara Amiel, was so profligate that by the beginning of this decade, some Hollinger shareholders were wondering where the money was coming from. Black's fraud conviction in July answered that question - it was coming from the shareholders' pockets.
Black and Radler had devised an ingenious scheme that allowed them, along with three other Hollinger executives, to pocket millions each time the company sold one of its newspapers or other assets. The sales were accompanied by "non-compete" deals under which the Hollinger executives were paid millions in return for a promise not to start a rival to the publication they had just sold.
Instead of passing these noncompete fees to Hollinger shareholders, Black, Radler and the other executives kept the money for themselves.
"All in all, what has happened here has been the grossest abuse by officers or directors and insiders," federal prosecutor Patrick Fitzgerald said in November 2005 as he issued arrest warrants for fraud involving up to $2 billion (¤1.37 billion). "By lining their pockets they went about a course of conduct where they . . . never told the audit committee of the board of directors, or through them the shareholders, what was going on and how they were self-dealing and taking money from the shareholders for themselves."
Radler, Black's lifelong friend and business partner, agreed to plead guilty and testify against the others in return for a 29-month jail sentence. As the net closed around him, Black was photographed removing boxes of documents from the company's offices, triggering an obstruction of justice charge.
Throughout his trial, Black proclaimed his innocence and pursued his second career as a presidential biographer, completing a life of Richard Nixon to follow his acclaimed biography of Franklin D Roosevelt. He has engaged an expensive team of lawyers to appeal his guilty verdict, although the appeal is likely to take a year and has a narrow prospect of success.
For a man who was seen by many as a vainglorious buffoon, Black has faced his downfall with relatively little self-pity and some dignity. Some of his friends continue to defend him but others, including Kissinger and Buckley, have edged away from their earlier support, declaring in recent weeks that they think Black may have been guilty after all.
"Friends don't usually act like that," a rueful Black remarked.
