Black's extravagance under spotlight
The use of the company private jet for a $500,000 holiday, a $60,000 birthday party with guests Henry Kissinger and Donald Trump, and a $4.6 million refit of an apartment to make it habitable – all billed to the Hollinger media company. These are some of the details of excess and extravagance that emerged during a two month trial accusing media mogul Conrad Black of looting $60m from his Hollinger media empire. Black (62) is accused of 17 charges of fraud, money laundering, tax evasion, and obstruction of justice and faces up to 100 years in prison if he is convicted. He denies all wrongdoing. Three of his colleagues have also been accused of misappropriating funds from Hollinger.
During the trial, the jury, which is due to retire next week, heard that Black maintained a lavish lifestyle, some of which was charged to the Hollinger company accounts. There was a holiday costing $500,000 to Bora Bora with his wife, journalist Barbara Amiel, in which they flew on the Hollinger private jet. There was Barbara's infamous surprise 60th birthday party, where guests included Donald Trump, Henry Kissinger and Michael Bloomberg. Beluga caviar, lobster and $320-a-bottle 1993 Dom Perignon champagne was consumed. In total, the party got through $13,000 of wine. Black charged $42,869.57 of the party's cost to his company, Hollinger International, as a “business expense”.
Then there was the renovation of a New York apartment, owned by Hollinger and lived in rent free by Black between 1994 and 2000. The apartment was renovated by Hollinger to a tune of $4.6m to bring it up to a "habitable" condition including fittings such as an antique Chinese carpet, a Napoleonic shaving basin, and an Indian marble sculpture. Six years after the apartment was bought by Hollinger for $3 million Black bought it from them for the same price.
The prosecution has used these examples to put forward the case that Black inappropriately used Hollinger company funds. Black's defence maintain that he needs to travel on a corporate jet as his high-profile support for America and Israel could make him a terrorist target. And that the birthday party for his wife was a networking opportunity.
The prosecution's star witness is David Radler, Black's former right-hand-man. Radler has admitted fraud and plea bargained for a 29 month sentence. Radler contends that theft from Hollinger began in 1998, when there was a burden of debt on the company. Black and his colleagues shrunk the company by selling its 400 smaller papers. Each time a paper was sold Black and his colleagues persuaded buyers to pay them millions in "non-compete" agreements that were not disclosed to Hollinger's board. Black's defence argues that all the non-compete agreements were either approved by the board or were negotiated without Black's knowledge by David Radler. When stockholders began to ask questions, he dismissed their concerns as "an outbreak of shareholder idiocy”. Wary that Black's lavish lifestyle and haughty demeanor may alienate the jury they his defence conceded that Black's "rhetorical" style which sometimes made him sound "arrogant" and "snotty".
The trial has also been surrounded by a series bizarre events. On the second day of the trial Black emerged from court speaking French and barked at a reporter to translate him. A few days later, his wife allegedly called a Canadian television producer a “slut” when they were contained in a lift together. And mid-way through the trial Black launched his 1,100 page biography of Richard Nixon.
Canadian born Conrad Black began building his media empire in Canada with the purchase of some small local newspapers. By 1990, his companies ran over 400 newspaper titles in North America. In 1985 he bought into the British newspaper group Telegraph and ran that for 20 years.
He controversially renounced his Canadian citizenship in 2001 in order to become a life peer in the British House of Lords. During the trial the prosecution and defence have refrained from calling him Lord Black, so as not to alienate the jury. He has written several books including a biography on Roosevelt and his own autobiography.