Conrad Black

Conrad Black

Conrad Moffat Black, Canadian-born British peer, Baron Black of Crossharbour, media baron, industrialist, journalist, historian and author.

The spectacular rise and fall of media mogul Conrad Black is the stuff of which legends are made. But perhaps even more remarkable is the largely successful legal battle he waged from behind bars, effectively discrediting almost all of the fraud charges filed against him. (One turning point came in 2010 when the U.S. Supreme Court unanimously ruled in his favor: Black v. United States (130 S. Ct. 2963 (2010)). In addition to his recent memoir, A Matter of Principle (Encounter Books, 2012), Black has authored biographies of both Franklin Roosevelt and Richard Nixon. The Canadian-born attorney is also a member of the British House of Lords. After serving three years in prison, Black returned last year to his home in Toronto.

Conrad Black, with John Boultbee and Mark Kipnis, as well as Peter Atkinson, were leading executives of Hollinger International, Inc. (Hollinger), a publicly held U. S. company that, through subsidiaries, owned newspapers in the United States and abroad.

In fact, Hollinger International, owner of the Chicago Sun-Times, came under governmental suspicion in 1998 when it began executing non-competition agreements in connection with the sale of most of its smaller newspapers. Of particular suspicion was one agreement, drafted and executed by Mark S. Kipnis, Hollinger’s Corporate Counsel, which paid four Hollinger executives, including Conrad M. Black, Hollinger’s CEO, and John A. Boultbee, Hollinger’s Executive Vice President, a total of $5.5 million in exchange for their promise not to compete with a Hollinger subsidiary. Petitioners, Conrad M. Black, et al. (“Black” ), maintain that the payments represented rightfully-earned compensation for their management of Hollinger. They state that ordinarily their compensation came from the management fee account of Ravelston Corp. Ltd., a private Canadian company that effectively controlled Hollinger through voting shares. But,they explain, compensation in the form of non-compete payments was preferable because it allowed Canadian executives, Black and Boultbee, to profit from Canadian law rendering non-competition agreements nontaxable.

In 2005, the Government indicted Defendants on multiple counts, of prime concern here, three counts of mail fraud in violation of §§1341 and 1346. Two theories were pursued by the Government on each mail-fraud count. The Government charged that (1) Conrad Black and their partners stole millions from Hollinger by fraudulently paying themselves bogus
“noncompetition fees” ; and that (2) by failing to disclose their receipt of those fees, Conrad Black and their partners deprived Hollinger of their honest services as managers of the company.

Because Black both failed to disclose the payments to the Securities and Exchange Commission and caused Hollinger to falsely represent to its shareholders that the payments were made in satisfaction of “a closing condition,” the United States charged them with, inter alia, violating 18 U.S.C. § 1341 and 18 U.S.C. § 1346. 18 U.S.C. § 1341 criminalizes using the mail system to obtain money fraudulently, while 18 U.S.C. § 1346 states that § 1341 includes schemes “to deprive another of the intangible right of honest services.” At trial in the United States District Court for the Northern District of Illinois, the judge instructed the jury that it could convict Black for conventional fraud (theft of money or other property from Hollinger by misrepresentation and misleading omissions amounting to fraud) or honest-services fraud. The judge further instructed the jury that conviction for honest services fraud required a finding that Black schemed to deprive Hollinger International of “the intangible right” to “honest services” and that “the objective of the scheme was for private gain.”

At the close of the four-month trial, the U. S. District Court for the Northern District of Illinois instructed the jury on the theft-of-money-or-property and honest-services deprivation theories advanced by the Government.

A jury convicted Black of both mail fraud and wire fraud under 18 U.S.C. § 1341. Black Black appealed to the Seventh Circuit Court of Appeals, arguing that the district court erred by failing to instruct the jury that a conviction for honest-services fraud required proving economic injury to Hollinger, rather than to the Canadian government. The Seventh Circuit rejected this argument and affirmed the district court’s decision, reasoning that even if the honest-services instruction were incorrect, it was harmless error. Additionally, the Seventh Circuit rejected Black’s appeal based on a finding that Black’s objection to the United State’s request for a special verdict constituted forfeiture of the right to challenge the judge’s jury instructions. Specifically, the Seventh Circuit stated that“[i]f the jury had been given a special verdict that separated the two types of fraud, and had indicated on the verdict that the defendants were not guilty of an honest services fraud, the challenge to the instruction would be moot.”

The Supreme Court granted certiorari on May 18, 2009 to determine the scope of the honest services provision and whether an appeals court may avoid review of instructional error by retroactively imposing a preservation requirement.

Conrad Black Interview

In January 2012, Conrad Black spoke with California Lawyer editor Martin Lasden. Here are edited excerpts from that videotaped conversation:

Q: You’ve never stopped insisting that you were innocent of improperly pocketing tens of millions of dollars while serving as CEO of Hollinger International. Yet in your memoir you write, “My pride and haughty spirit were of the nature that often leads to a fall.” Should this be read as an acknowledgement of a tragic flaw in your character that in no small way led to your downfall?

I wouldn’t put it in quite those terms. First of all, tactically, I was taking as much blame as I conscientiously could in order to strengthen the plausibility of my basic claim that I was innocent of crimes. So in order to strengthen the argument against that allegation, I opened up the kimono somewhat exaggeratedly on the character side. Now, self-judgments are always questionable, and I’m always a little skeptical of people signing their own personality expense accounts, but that’s my opinion.

It was as a newspaper entrepreneur that you made your first real mark on the world. Yet even as you were building the world’s third largest newspaper empire, you didn’t seem to have a very high regard for journalists. You’ve called them ignorant, lazy, intellectually dishonest, and inadequately supervised. Do you still feel that way about my distinguished, hard-working colleagues?

Not without exceptions. But look, on balance I think that most journalists as people are quite pleasant – as most people are. But I do not have a high opinion of them as a group. And I’ll take it one step further. I think both the media and the legal profession have failed our society, and I think they have failed very, very seriously.

Who comes out worse in your view – lawyers or journalists?

Actually lawyers, because lawyers swaddle themselves in the sanctity of the law and the whole concept of legitimacy, whereas journalists generally acknowledge that their job is to entertain and inform in ways that are frequently questionable.

When you look back on the ordeal you’ve been through over the past decade, what would you say caused you more anguish: Being outmaneuvered by your enemies or betrayed by your friends?

Certainly more the second, because I always thought that I would win in the end, and in my opinion I have. … But I did not realize the degree to which people are susceptible to doing completely dishonest things under levels of pressure that I would have thought resistible.

You checked into Florida’s Coleman federal prison in March of 2008. As a man who is accustomed to the finer things in life, how difficult was it for you to adjust to prison?

Not that bad. Yes, I am accustomed to the finer things and I enjoy them, but I’ve never defined myself as a dependent of luxury.

Who do you think fares worse in prison: people who know they’re guilty, or people who sincerely believe they’re innocent?

It’s the ones in between. The ones who know they’re guilty are often people who don’t have that burning sense of injustice. And the ones who are innocent generally have the sense that they’re fighting for a good cause. The ones, however, who are really broken by the system are those who may be guilty of something but are terribly over-sentenced. Those are the ones who are beaten down.

You’re still a capitalist. You believe passionately in the free market, and people still describe you as a conservative. But in matters of crime and punishment, I note that you now describe yourself as an “unambiguous leftist.”

While in general I suppose I would still be more a Republican than a Democratic supporter if I were in the U.S., I’m not one of these people who is so horrified by the thought of Democrats nominating judges to the bench because I don’t think Republican judges care about civil rights. I mean the fact is, your Supreme Court has just sat there like suet puddings while the Bill of Rights has been put to the shredder. In your country, due process is not something anyone can rely on, the grand jury is a farce, you don’t get prompt justice, and you don’t get reasonable bail either. I mean, I was posting $38 million. What’s reasonable about that?

Reading your memoir I was reminded of a line from a Bernard Malamud novel called The Natural, in which one of the main characters tells the fallen hero that we get to live two lives: There’s the life we learn with, she says. And the life we live with after that. How do you see the rest of your life playing out?

Obviously, it’s a lottery ticket and you don’t know how the medical side is going to work out. But I’m 68, and I feel the same as I did 30 years ago. So I think I’m well placed at this point to have what one famous Quebec businessman once called “a golden after-burner.”

Resources

See Also

  • Black Market
  • White Collar Crimes
  • E-Mail Fraud
  • Prison
  • Prison Life
  • Fraud
  • Newspaper
  • Canada

Further reading

  • Griffin, Lisa Kern (2011). “The Federal Common Law Crime of Corruption”. North Carolina Law Review 89 (5): 1815-1847.
  • Ryznar, Margaret (2010). “The Honest-Services Doctrine in White-Collar Criminal Law”. Hamline Law Review

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