Tuesday, March 4, 2008

Tubby checks in to the Crowbar Hotel

Conrad Black is officially a jailbird! His Tubbyness showed up as scheduled yesterday to begin serving his 6 1/2-year sentence for fraud and obstruction of justice after being found guilty late last year of defrauding Hollinger shareholders out of millions. Typically, The Verbose One maintained his innocence to the end. In his case, he has several mouthpiece newspapers to use in proclaiming his mistreatment, including the New York Sun, in which he penned an exculpatory column to coincide with his incarceration.
It is a terrible thing to be falsely accused, and wrongly convicted, even of a fraction of the original charges, and unjustly incarcerated. For persisting in seeking the recognition of my innocence of these charges, I have been portrayed as defiant, or at least in denial. I defy and deny unjust charges, not the practical difficulties I have faced for the last four years and am facing now.
In Canada, of course, the National Post he founded almost a decade ago provided a platform for Black's rationalizing, in which he blamed his plight on "a factional dispute between groups of shareholders" in his former newspaper company, Hollinger International. Some wanted the company "broken up or sold for a quick gain," according to Black. Others, he claimed, agreed with him and others in the company's management, who were conducting "an orderly withdrawal" from the tanking industry.
To prevail, the dissident shareholders had to remove the controlling shareholder. To destabilize my position, they began giving hostile interviews to competing publications, and attempted to depress the share price. In the commercial atmosphere after Enron and other accounting fraud cases where billions were lost and tens of thousands of people thrown into unemployment, the most effective way to force out an incumbent management was to attack their integrity.
The account provided by Black might convince someone who hasn't read the 500-page report of the independent directors committee of Hollinger, which chracterized the company's pillaging by Black, David Radler, and others as a "corporate kleptocracy." Unfortunately I have, as I had to digest it on short notice for a conference paper I was presenting in Sweden a few years ago. In piecing off the Hollinger empire, Black and Radler not only kept a percentage of the sales price -- typically 10 percent -- for themseves as "non-compete" payments. Hollinger shareholders figured that money should have gone to the company instead of its senior executives, but that's not what Black was convicted of. Even more egregious was the sale of newspapers to companies controlled by Black and Radler at arm's , often through relatives, such as Radler's father-in-law. The prices were a bargain indeed, as low as $1. Often they were re-sold in short order for a huge profit. If that isn't fraud, I don't know what is!

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