Conrad Black Read online

  ADVANCE PRAISE

  “When a great writer is falsely imprisoned for a crime he didn’t commit and decides to write a tell all non defensive account, the result is likely to be riveting. Conrad Black’s memoir does not disappoint. With his characteristic verve, turns of phrase and brilliant insights, Black puts his persecutors on trial. I am confident he will win the verdict of history.”

  ALAN M. DERSHOWITZ

  “Conrad Black’s A Matter of Principle is a fascinating, erudite, and defiant prison memoir – must-read for lawyers, politicos, and gossips alike!”

  MARGARET ATWOOD, on Twitter

  “Conrad Black is back – and it’s payback time, Jack!”

  TOM WOLFE

  “Compellingly readable, A Matter of Principle is partly a witty high-society memoir, partly a business book, partly a searingly-argued case for Black’s defence, partly a moving love-story, and partly a polemic explaining the death of his once profound admiration for the USA. What it is emphatically not is an apologia, but instead more a case for the prosecution of what he calls America’s ‘prosecutocracy.’”

  ANDREW ROBERTS

  “Written with high indignation but without so much as a drop of self-pity, and tempered by his characteristic panache, eloquence, and wit, A Matter of Principle is Conrad Black’s account of how and why he was toppled from his position as one of the great newspaper publishers of the day and then sent to prison on charges of which he was innocent. It is a fascinating, illuminating, and in some ways a horrifying story that should and hopefully will repair the damage that has so unjustly been done to his reputation.”

  NORMAN PODHORETZ

  “Conrad Black, who writes vigorous, muscular prose, relishes the fact that writing can be a way of fighting. In his spirited memoir, this pugnacious man of many accomplishments tells a fascinating story of, among other things, the prosecution of him that got the disapproving attention of the U.S. Supreme Court.”

  GEORGE F. WILL

  “You hold in your hands a vivid account of what has become a crucial threat to the American way of life: Class warriors of the Left enlisting all-powerful prosecutors to demonize and destroy successful entrepreneurs and executives. The injustices reach well beyond the targeted executives and result in widespread collateral financial damage to likewise innocent investors and shareholders, who also pay a steep price. This is an important, captivating account, lived and recounted by one of the sharpest minds of our time: Conrad Black.”

  RUSH LIMBAUGH

  ALSO BY CONRAD BLACK

  Render Unto Caesar: The Life and Legacy of Maurice Duplessis

  A Life in Progress

  Franklin Delano Roosevelt: Champion of Freedom

  The Invincible Quest: The Life of Richard Milhous Nixon

  Copyright © 2011 by Conrad Black Capital Corporation

  All rights reserved. The use of any part of this publication reproduced, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, or stored in a retrieval system, without the prior written consent of the publisher – or, in case of photocopying or other reprographic copying, a licence from the Canadian Copyright Licensing Agency – is an infringement of the copyright law.

  Library and Archives Canada Cataloguing in Publication

  Black, Conrad

  A matter of principle / Conrad Black.

  eISBN: 978-1-55199-316-4

  1. Black, Conrad. 2. Newspaper publishing – Canada – Biography.

  3. Capitalists and financiers – Canada – Biography. 4. Businessmen –

  Canada – Biography. I. Title.

  PN4913.B56.A3 2010 070.5092 C2008-901956-3

  We acknowledge the financial support of the Government of Canada through the Book Publishing Industry Development Program and that of the Government of Ontario through the Ontario Media Development Corporation’s Ontario Book Initiative.

  We further acknowledge the support of the Canada Council for the Arts and the Ontario Arts Council for our publishing program.

  Library of Congress Control Number: 2011935307

  Cover photograph: Peter Bregg

  McClelland & Stewart Ltd.

  75 Sherbourne Street

  Toronto, Ontario

  M5A 2P9

  www.mcclelland.com

  v3.1

  To Barbara, my indomitable, unofficial co-defendant, and my daughter Alana and sons Jonathan and James; to my dear friends June Black, Dan Colson, Midge Decter, David and Murray Frum and Nancy Lockhart, Roger and Susan Hertog, Laura Ingraham, George Jonas, Roger Kimball, Seth Lipsky, Joanna MacDonald, Joan Maida, Brian Mulroney, Norman Podhoretz, Andrew Roberts, William Shawcross, Brian Stewart, Bob Tyrrell, and Ken Whyte; and to Rob Jennings, and other friends in the prison to which I and many of them were unjustly sent; and to all others who have sustained and encouraged me in this difficult time, including thousands of strangers in many lands. All in their different ways have been magnificent. I will never forget their encouragement and will try to repay, or at least justify, their kindness.

  RAVELSTON, ARGUS, AND HOLLINGER

  [CONTENTS]

  Cover

  Other Books by This Author

  Title Page

  Copyright

  Dedication

  Ravelston, Argus, and Hollinger

  Chapter One

  Chapter Two

  Chapter Three

  Chapter Four

  Chapter Five

  Photo Insert 1

  Chapter Six

  Chapter Seven

  Chapter Eight

  Chapter Nine

  Chapter Ten

  Photo Insert 2

  Chapter Eleven

  Chapter Twelve

  Chapter Thirteen

  Chapter Fourteen

  Photo Insert 3

  Chapter Fifteen

  Epilogue

  Postlude: Reflections on the American Justice System

  Appendices

  Photographic Credits

  [CHAPTER ONE]

  MARCH 2010: COLEMAN FEDERAL CORRECTIONAL COMPLEX, FLORIDA

  I sleep in a cubicle that shares a ceiling with sixty other identical spaces, rather like partitions in an office, except that these are painted cinder block and there are no potted plants. At 10:30 p.m., the ceiling lights placed every twenty feet or so go out. The residents turn out their cubicle lights, leaving only an overhead row of red, dimly lit panels, pierced here and there by the beam of portable reading lamps, which enable the readers among us to escape into books, letters, newspapers, snapshots, and tokens and reminders of the world beyond the gates. In the morning, daylight creeps past the condensation generated by the confrontation between the Florida heat and the fierce air conditioning of the Federal Bureau of Prisons into the outside cubicles through narrow rectangular windows grudgingly set in the concrete walls.

  Here, we concern ourselves with how many postage stamps (the local currency) are needed to buy an extra notepad. We see and hear the talking heads on tele vision in the activities room or, in my case, read in the newspapers of the steady failures or crises of great institutions: AIG, General Motors, Citigroup, the State of California, the New York Times, the Harvard University Endowment. How could this country have become so incompetent, so stupid, and why was this debacle so unforeseen? The pundits have the usual uninformed answers, not greatly more well thought out, and less entertaining, than those of some of my fellow residents. Lying in my bunk after the lights have gone out, I reflect on the ludicrous demise of my great love affair with America.

  Bemused by the economic and political shambles, created largely by people I have known, I fight on from this absurdly shrunken perimeter for recovery of my liberty, reputation, and fortune. I still expect to win.


  My prison number, 18330-424, is stamped on my clothes and mandatory on all correspondence. I am sixty-five years old. I entered these walls a baron of the United Kingdom, Knight of the Holy See, Privy Councillor, and Officer of the Order of Canada, former publisher of some of the world’s greatest newspapers, and author of some well-received non-fiction books. In December 2007, a courteous federal district judge in Chicago sentenced me to seventy-eight months in a federal prison and imposed a financial penalty of $6.2 million. This is all winding its way through final appeals and is completely unjust, but so are many things. I was convicted of three counts of fraud and one of obstruction of justice, of all of which I am innocent. Three charges were dropped and nine led to acquittals. I have gone through but survived straitened financial circumstances, have sold two of my homes, and am responding to and initiating endless civil litigation. For the last six and a half years I have been fighting for my financial life, physical freedom, and what remains of my reputation against the most powerful organization in the world, the U.S. government.

  My shrunken newspaper company, once owner of distinguished titles in Britain, Canada, Australia, and America, as well as the Jerusalem Post, was now bankrupt under the dead weight of the incompetence and corruption of my enemies, who have hugely enriched themselves under the patronage of American and Canadian courts of law and equity. I am estranged from some of my formerly professed friends, including a number of famous people, though in greater solidarity than ever with some others. Much of the press of the Western world was long agog with jubilant stories about the collapse of my standing and influence. For years I was widely reviled, defamed, and routinely referred to as “disgraced” or “shamed” and “convicted fraudster.” (This was the preferred formulation of the London Daily Telegraph, of which I was chairman for fifteen years.) In light of my lately improving fortunes most of my less rabid critics are now hedging their bets. Whatever happens, this will not be the end of my modest story. But it seems an appropriate moment to update it.

  OCTOBER 2003: MY HOME, KENSINGTON, WEST LONDON

  London’s yellow afternoon light filtered in from windows overlooking gardens on three sides of my room. All about me was the reassuring evidence of an active career and an eclectic range of interests. Shelves of leather-bound first editions giving every side of the French Revolution and Napoleonic Wars. Depictions of the great English cardinals Henry Manning and John Henry Newman. Jules Mazarin and the esteemed diplomat Ercole Cardinal Consalvi, strikingly rendered, looked down impassively upon, among other things, a small bust of Palmerston, a fine crystal model of the Titanic given to me by my tragically deceased driver, Tommy Buckley, and an iron copy of the death mask and hands of Stalin that I had bought from the estate of the great British maverick politician Enoch Powell. Gifts: a shield from Chief Buthelezi of the Zulus, a naval painting from our directors in Australia, the extravagantly inscribed latest memoirs of Henry Kissinger and Margaret Thatcher, each evoking interesting times and powerful friends, historic figures who had helped me and whom I had helped.

  My lengthy biography of Franklin D. Roosevelt lay in galleys on my desk. This was a room that had weathered all efforts of interior decorators and remained comfortable and practical for my work. Good chairs and reading lamps, a large and deep sofa on which I sometimes napped, its antique decorative pillows turned backward to hide the scorching received when one of my younger son’s friends fell asleep on it and knocked over a lamp. Though large, the room exuded a sense of safety, a barricade at the far end of the house away from prying eyes and noise. All the same, increasingly I felt an indefinable foreboding. Mazarin, the protegé and successor of Cardinal Richelieu, could have warned me. He knew the signs of insurrection well. All was silent; I was uneasy, but my vision was impaired.

  I knew well enough where the trouble lay. Some of our large institutional shareholders were attempting to break up the newspaper company I had created, Hollinger International, in order to sell it off for a good short-term price while newspaper stocks were sluggish but newspaper enterprise values – the sale of newspapers as going concerns – were still buoyant. Now, firmly riding the hobby horse of shareholder activism, a backdoor attempt to overthrow me and achieve the sale was in progress – though I didn’t entirely grasp it at the time. All I knew was that allegations of overly generous payments to myself and other executives were keeping business writers, especially those of competing newspapers, phoning around for colourful anecdotes to illustrate our supposed extravagance with company funds. In response, I had agreed to establish a special committee to examine these matters, confident of our complete vindication. Now these committee members were beavering noisily away, with the concentration and attitudes of antagonists. I did not know then how easily a special committee could decapitate even a controlling shareholder. But I knew enough to be uneasy. If I could be rattled severely enough, the company could be sold and all the shareholders instantly gratified. I thought more could be achieved by gradualism, selling assets when they were ripe, and separately to targeted buyers, as few companies would be attracted at top prices to such geographically disparate newspaper properties. I also considered, and the directors and shareholders professed agreement, that these were decisions for the managing and controlling shareholders who had built the business. This was the core of what became a huge controversy.

  FROM MY EARLY YEARS, I thought that publishing large and high-quality newspapers was the most desirable occupation of all: this was a business that could offer commercial success, political influence, cultural and literary potential, and access to everything and everyone newsworthy in every field. As a young person I read about famous newspaper owners such as W.R. Hearst, Lord Beaverbrook, Lord Northcliffe, Lord Rothermere, Colonel Robert McCormick, and Canadians that my father knew: J.W. McConnell, Joseph Atkinson, George McCullough, John Bassett, the Siftons.

  During a break in my university years, I took over an uneconomic weekly newspaper in Knowlton, Quebec, about fifty miles east of Montreal, from my friend Peter White, who had become a special assistant to the premier of Quebec, Daniel Johnson. I paid Peter $500 for half of the Eastern Townships Advertiser, approximately $499 more than it was worth. I wrote, edited, and laid out the eight-page half-tabloid and sold whatever advertising could be had in the elderly English-language minority of that area, who lived chiefly from the avails of maintaining and milking the country houses of wealthy Montrealers. I even dealt with some of the circulation distribution. In winter, the wind whistled across frozen Brome Lake, and I often needed snowshoes to get to and from my car. I read a great deal and found the life of a coureur de bois exhilarating, especially when the first signs of spring began to appear.

  When I was in my third year at the Laval University law school, Peter White and I, together with David Radler, a new acquaintance Peter introduced me to, bought the insolvent Sherbrooke Daily Record, another twenty miles east of Knowlton. This newspaper had a circulation of seven thousand. Its press had been repossessed by the manufacturer and it was in dire straits. We paid only Can$18,000 for it. I became the first university student, at least in Canadian history, to be a publisher of a general-interest daily newspaper. David Radler, who was almost a caricature of a penny-pinching businessman, focused entirely on costs and revenues. He was alert, suspicious, and often entertaining.

  I had moved from Toronto to Quebec in 1966, suffused with enthusiasm for Canada as a country that had the advantage of having the two greatest cultures of the West within itself. I became fluent in French, studied the civil law, and wrote a book about Quebec’s longest serving and most controversial premier, Maurice L. Duplessis, which has stood as a serious work on the subject.

  I moved back to Toronto in 1974, just before my thirtieth birthday, exasperated with Quebec’s endless threats to secede from Canada – while retaining all the economic benefits of Confederation, including huge transfers of money from English Canada in institutionalized annual Danegeld. I became a fairly vocal and widely publ
icized advocate of a strong line against Quebec separatists, suspecting, correctly, that they could never get near half the votes without an umbilical association with Canada that in effect combined official independence in the world with continued provincial dependence, both eating and retaining the cake. The whole concept was a fraud. I was also an advocate of transforming Canada into a greater enterprise state than the United States, one that could, by its low crime rate and tax reductions, attract industry and people that would otherwise go to the United States or had already moved there. My views were widely mistaken as annexationist – that is, advocating federal union with the United States. I made the point that Canada would be better off making a deal with the U.S., including instant parity for our 65-cent dollar, than continuing endless fruitless tractations with Quebec separatists who wanted concessions but would never make a durable agreement.

  However I was seen, I couldn’t regard myself as a pillar of the Canadian establishment, which at that time, it seemed to me, operated a back-scratching, log-rolling operation that took care of its own but underperformed the vast potential for the country. As much as I was out of favour with the comfortable Canadian centre-right, I could never make common cause with the Canadian left because of their anti-Americanism and their addiction to high taxes and excessive unionization and wealth redistribution and their imitative mediocrity. They received almost no international attention. I often felt like a party of one.

  MY ENTRY INTO THE CORPORATE WORLD was a splash. In 1978, following the death of its incumbent chairman,* one of Canada’s famous holding companies, Argus Corporation, of which my father had been a sizable shareholder, became the subject of a sharp takeover struggle. My parents had died only ten days apart in June 1976, and my brother and I now had our father’s 20 per cent of the shares of the company, the Ravelston Corporation, that owned 60 per cent of the voting shares of Argus Corporation. Factional disagreements ensued. My brother and I were one of the factions, and we were successful. What we took over in Argus was a mixed bag of assets in an obsolete structure.† There were influential but not really controlling shareholdings in Massey Ferguson (tractors and farm equipment), Dominion Stores (supermarkets), Domtar (forest products), Hollinger (through a subsidiary, iron ore royalties), and a genuine controlling interest in a radio station and television company. The reputation of the founders had made Argus Corporation famous, but the reality was a moth-eaten hodgepodge of positions of questionable value.