Shades of Black: Conrad Black - His Rise and Fall

Book by Siklos Richard

For a man with Conrad Black’s sense of place and history, an AT&T teleconference may not have been his choice of venue for his own corporate beheading. Black was at his Park Avenue apartment at 10 a.m. on Tuesday, January 20, 2004, when he phoned into a board meeting of Hollinger International, the Chicago-based newspaper company he had founded, which owned the Telegraph newspaper group in London, the Chicago Sun-Times, and the Jerusalem Post.

As the ultimate owner of a 72 per cent voting interest in Hollinger International, Black conducted his affairs with a swagger that was based on certain immutable beliefs: he called the shots and he controlled his board. If shareholders didn’t like his act they could sell their stock and take a hike. On and off for a quarter century, he had operated in the grey areas of business where little is straightforward, rules are meant to be prodded and bent, and personal advantage is the single objective. It’s a risky path, but in all those years he had usually come out on top. Even when he hadn’t, there was often someone else to blame.

Black was very good at this game. It had brought him fame, fortune, a peerage, a brainy wife who looked like a movie star, and a Gulfstream IV jet that ferried the couple among their splendid homes in London, New York, Palm Beach, and Toronto. In their lifestyles, Lord Black of Crossharbour and Lady Black dwelled among the mega-rich in the social mesosphere, the place above the stratosphere where the air is thin and meteors burn up.

Black’s hand-selected Hollinger board was stocked with – in addition to his wife, the columnist Barbara Amiel – a high ratio of dignitaries of the right, including former U.S. secretary of state Henry Kissinger, former Defense Policy Board chairman Richard Perle, four-term Illinois governor James Thompson, and retired U.S. ambassadors Richard Burt and Raymond Seitz. Their elevated stature reflected Black’s carefully cultivated persona as a Renaissance magnate, equally adept at delivering euphuistic speeches in Britain’s House of Lords, penning weighty biographies, and overseeing a cash-spinning media empire. He and Kissinger, whom he’d known for two decades, were especially close. Indeed, Conrad and Barbara had spent the last American Thanksgiving at Henry and Nancy Kissinger’s home in Connecticut. “I realize the allegation is about that I am somewhat of a seeker of celebrities, and in one sense I suppose that’s true,” Black once said. “But my purpose is that celebrities who are justly celebrated can be very useful to you.”

For two months before the teleconference, Black’s life had been turned upside down by an internal revolt unlike any other big corporate blow-up of recent years. The nightmare had started in November 2003, when Black and several top associates were accused by a special committee of the Hollinger board of taking US$32 million from the company without authorization; Black agreed to step down as chief executive of his company, and the others resigned or were fired. The situation had grown uglier in the weeks since. Over the weekend of January 16 – 18, the feud between Black and his beloved board escalated into all-out corporate war or, as he would growl into his telephone, a “series of Pearl Harbor attacks.” On Friday, January 16, Hollinger fired Black as chairman and sued him and several associates for the more than US$300 million they were alleged to have plundered from the company. At the same time, without consulting Black, Hollinger signed a Securities and Exchange Commission court order that would stymie any attempt by Black to replace the insurgents.

Combative at the best of times, Black held fast. He denied any wrongdoing and on Sunday the 18th shot back with a surprise counter-move: he announced a deal to sell Hollinger’s Canadian holding company to Sir David and Sir Frederick Barclay, self-made identical-twin billionaires. Selling out at this moment would be the ultimate kiss-off to his accusers and give Black the war chest to regroup and fight on.

Now, three days later, the board was meeting to ratify Black’s ouster as chairman and the lawsuit against him, and it was becoming painfully clear that celebrity friendships have their limits. The meeting began at 10:10 a.m. with the directors announcing their presence on the line one by one.

Gordon Paris – a chief Black nemesis who had led the investigation into Hollinger’s finances and had been appointed interim chief executive in November – called for the ratification of Black’s removal as chairman. Black’s wife objected, demanding an explanation, because the November agreement had stipulated that her husband would retain the title. Raymond Seitz replied that at least one reason to remove Black was that he had invoked the Fifth Amendment when summoned before the Securities and Exchange Commission a few weeks earlier. The other directors felt Black’s stance had motivated the SEC to take action against the company. Beyond that, Seitz said he preferred not to provide a detailed explanation of his own reasons for supporting the move. He was “sure all the other members each have valid reasons and there would be no benefit to recording them all here.” Amiel shot back that his reasons were “extraneous.”

Nonetheless, when the motion was put to a vote it passed easily, with only the Blacks opposed out of nine directors present and Dan Colson, Black’s long-time friend and Hollinger’s chief operating officer, abstaining. With that, Black was out as chairman and Paris was appointed to the post.