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The New York Times

December 22, 2003


Conrad BlackFriendship and Business Blur in the World of a Media Baron

By Jacques Steinberg and Geraldine Fabrikant

ON the dust jacket of his recently published biography of Franklin D. Roosevelt, Conrad M. Black, the embattled media magnate, collected laudatory blurbs from an impressive set of conservative thinkers.

Henry A. Kissinger writes, "No biography of Roosevelt is more thoughtful and readable." The columnist George F. Will calls the book a "delight to read." And William F. Buckley Jr. commends the biography as "a learned volume on F.D.R. by a vital critical mind."


David Irving comments:

GEORGE Will was (note the past tense) one of my most vociferous critics.
   I doubt that even this stick insect can stand exposure to this kind of light for long however.


Georeg Will "George Will, a Pulitzer Prize-winning syndicated columnist and essayist, is considered by many to be the foremost political columnist of our time." -- Ho-ho.

What the blurbs did not mention was that each man was praising the work of a sometime boss. During the 1990's, Lord Black had appointed all three to an informal international board of advisers of Hollinger International, the newspaper company he controlled.

For showing up once a year with Lord Black to debate the world's problems, each was typically paid about $25,000 annually (until the board was disbanded in 2001).

The advisory board was one example of how friendships with the rich and often politically influential overlapped with business in Lord Black's world. The board became a who's who of mostly conservative thinkers and politicians that included Margaret Thatcher, Valéry Giscard d'Estaing, Zbigniew Brzezinski, Richard N. Perle (below left), and the former head of Archer Daniels Midland, Dwayne O. Andreas.

Lord Black enjoyed more than just conversation from the advisers Hollinger paid for. Mr. Will and Mr. Buckley have since written positively about Lord Black in their columns, though without mentioning their business dealings. And three other members of the advisory board also joined Hollinger's board as directors.

Richard PerleBut now, as Lord Black and Hollinger face inquiries by the Securities and Exchange Commission and the Justice Department into more than $200 million that he and his top executives collected, these interlocking relationships may come to haunt not only Lord Black but the directors who oversaw the company while these payments were being made. In some cases, the directors had themselves accepted additional payments from the company.

Lord Black, who is scheduled to testify before the S.E.C. today, has been advised by his lawyers to invoke the Fifth Amendment right against self-incrimination because they think he has not had time to review all the documents related to the current issues, according to people with knowledge of the discussions.

KissingerThe seemingly porous boundary among Lord Black's social, political and business lives, which was reflected in the composition of the Hollinger board, has been thrown into relief by the investigation. In the 1990's, Mr. Kissinger (right), Mr. Perle and Mr. Andreas all served as directors at times when they were also getting paid (by the company) for their advice to Lord Black. Lord Black, as well as Mr. Kissinger, Mr. Perle and Mr. Andreas, last week declined requests for interviews.

A closer look at the members of Lord Black's inner circle sheds light not just on board oversight but also on how he managed to transform himself as Hollinger grew from an obscure Canadian company that owned mines and supermarkets into the owner of more than 100 daily newspapers, including The Daily Telegraph in London, The Jerusalem Post and The Chicago Sun-Times.

In the process, Lord Black became a throwback press baron who lived lavishly on Park Avenue, in Palm Beach and in London and was at ease in the most prominent salons in the world. His annual Hollinger Dinner attracted the likes of Ronald Reagan and Richard M. Nixon.

"I think Conrad did these things less for the bottom line than to create the aura that group gave him," said Peter Munk, the founder and chairman of Barrick Gold, and someone who briefly served on an earlier incarnation of the Hollinger board before resigning in the mid-1990's. "He reveled in that aura."

Mr. Brzezinski, who was national security adviser in the Carter administration, said he first met Lord Black perhaps four decades ago at one of several international conferences that they frequented.

One is known as Bilderberg Group, a conclave of business and political leaders from North America and Europe that meets each year for discussions that are off the record.

"He's an extremely intelligent guy, very well read," Mr. Brzezinski said.

In the early 1990's, Lord Black decided to form a miniature Bilderberg of his own by creating a board to advise Hollinger on international affairs, according to "Shades of Black," a biography by Richard Siklos, a former reporter for Business Week and The Financial Post, a Toronto business newspaper.

In its earliest incarnations, the advisory board included Mr. Kissinger, Mr. Perle and Mr. Brzezinski, as well as Paul A. Volcker, the former head of the Federal Reserve; Chaim Herzog, the former president of Israel, who died in 1997; and Lady Thatcher, Mr. Siklos wrote. They were joined by others, including Mr. Will and Mr. Buckley.

Though Lord Black frequently found room for liberals on his list of dinner guests, the members of the advisory panel usually shared his conservative views.

At the advisory meetings, each participant would be assigned a topic. At times, given the weight of expertise in the room, the conversations extended to a second day.

"For quite a while, Mrs. Thatcher would participate," Mr. Brzezinski said. "I was one of those people who suggested to Conrad that it wasn't productive to hear her speak at such length."

Lady Thatcher did not respond to messages left for her at her foundation in Britain.

Mr. Brzezinski's personal records show that he collected almost $170,000 for attending eight such meetings in the 1990's, according to an aide. Mr. Buckley estimated that he had earned perhaps $200,000 or more. Mr. Will could not recall how many meetings he attended; an aide later confirmed that the per diem for each meeting was $25,000.

Though the conversations at the traveling advisory meetings could be illuminating, Mr. Buckley said he was hard pressed to find an example of how the sessions were of assistance to Hollinger. But sometimes having such good friends helped burnish Lord Black's public image.

In a column syndicated by The Washington Post Writers Group in March, Mr. Will recounted observations Mr. Black had made in a London speech defending the Bush administration's stance on Iraq.

In a rebuttal to Mr. Bush's critics, Mr. Will wrote, "Into this welter of foolishness has waded Conrad Black, a British citizen and member of the House of Lords who is a proprietor of many newspapers."

Asked in the interview if he should have told his readers of the payments he had received from Hollinger, Mr. Will said he saw no reason to do so.

"My business is my business," he said. "Got it?"

Barbara AmielAlan Shearer, editorial director and general manager of The Washington Post Writers Group, said he was unaware of Mr. Will's affiliation with Hollinger or the money he received. "I think I would have liked to have known," Mr. Shearer said.

Similarly, in a column published in The National Review in 2002, Mr. Buckley, the magazine's editor at large, wrote of attending a dinner at Lord Black's home in London.

In an effort "to divulge all my personal conflicts in talking about the subject," Mr. Buckley wrote in the column that Lord Black and his wife, Barbara Amiel, (right) were among his "five closest friends in the entire world."

Asked later why he had not mentioned his payments from Hollinger, Mr. Buckley said, "I didn't think that had any bearing whatsoever."

To underscore that he did not feel beholden to Lord Black -- "Giscard d'Estaing and I don't bribe very easily," he said -- Mr. Buckley mentioned a "withering review" of the Roosevelt book that The National Review published on Nov. 24.

Conrad BlackAnd yet, Mr. Buckley dashed off a letter to the editor of The New York Observer after the newspaper published a front-page profile of Lord Black last week that interspersed criticism of his business with criticism of his book.

"Your editorial on Conrad Black was febrile with hate which one has to assume is personal," he wrote.

"You are entitled to ask how I presume to write with ostensible authority," Mr. Buckley added. "I write because I have known Conrad Black for 15 years."

He concluded: "Since your mind inclines in that direction, hear this: he has never donated a nickel to any of my enterprises."

But, aside from some good press, there were more tangible benefits for both Lord Black and for the people who associated with him, benefits that go to the heart of shareholder complaints about the company.

Mr. Perle, the former head of the Pentagon's Defense Policy Board who served on the Hollinger board, also served as chairman or co-chairman of Hollinger Digital, a unit of the parent company, since its inception in 1996. In that capacity, he was paid more than $300,000 a year and $2 million in bonuses over part of that period, said someone with knowledge of the company, figures that have not previously been disclosed.

Reached for comment, Mr. Perle referred all questions on these payments to the company.

Trireme, a venture capital firm partly managed by Mr. Perle and advised by Lord Black, received a $2.5 million investment from Hollinger this year, although the company did not initially disclose the firm's name, according to company filings earlier reported in The Wall Street Journal. And Hollinger also gave about $200,000 a year to The National Interest, a foreign affairs publication where Lord Black and Mr. Kissinger are co-chairmen of the editorial board, of which Mr. Perle is a member. The payments were also earlier reported in The Journal.

And last month, Hollinger disclosed that the company had given several current and former executives, as well as a holding company controlled by Lord Black, more than $30 million in payments that were not approved by the company's board. (In earlier filings, the company had said some payments were approved by the company's independent directors.)

While all of the company's outside directors could face lawsuits accusing them of failing to serve shareholders, Mr. Kissinger, Mr. Perle and Mr. Andreas may be at even greater risk. By accepting additional fees for having served among Mr. Black's international advisers, the three could be considered consultants, or insiders.

Conrad Black in ermineAccording to Charles Elson, professor of corporate governance at the University of Delaware, the acceptance of those payments increases the likelihood of their liability for oversight failures.

Herbert Denton, an informal adviser to Hollinger shareholders, was more blunt. "One hand was washing the other," he said

Some shareholders are also angry about roughly $200 million in management fees paid to another company controlled by Lord Black since 1995. In the wake of the company's announcement, Lord Black (right) has quit as chief executive but is staying on as chairman while the board explores whether to sell any company assets.


... on this wesbite about Conrad Black and his newspaper empire

David Irving, Radical's Diary April 18, 2000: "... because the Satellite link is off" (George Will cancelled a debate)
George Will: Faux historians' political agendas deserve exposure
Mark Weber in 1993: Lunch with George Will: How an Influential Journalist Distorts the Truth
Hollinger International, the publisher of the London Daily Telegraph and the Chicago Sun-Times, said Conrad Black would step down as chief executive officer over $US32 million unauthorised payments to executives, including Lord Black, that weren't authorised by the board 
Conrad Black's Jerusalem Post calls for the murder of Yasser Arafat
Another over-greedy puppeteer Australian Frank Lowy defends $12.38 million bonus, won't step down as head of Westfield's remuneration committee
Flashback: When Barbara Amiel, the wife of Spectator owner Conrad Black, found it in her heart to write truly wonderful things about David Irving
Taki makes friends at Conrad Black's garden party
Battling B.C. Journalist Doug Collins writes to craven publisher Conrad Black
The New Statesman, a leading British weekly, has raised the specter of Jewish control over the media and government.
An email letter circulating in London identifies the Jewish directors of the British media
"You don't understand, Max. My entire interests in the United States and internationally could be seriously damaged by this" - Black to Max Hastings
French envoy to UK recalled (Black's wife repeated private dinner-party remark about Israel)
On-line edition of David Irvings irregular and scurrilous newsletter Action Report.
Robert Fisk accused BBC of buckling to Israeli pressure to drop the use of "assassination"
Frances ambassador to Britain cannot remember referring to Israel as that shitty little country during a private conversation with a newspaper owner, his spokesman said on Wednesday.
On-line edition of David Irving's irregular and scurrilous newsletter Action Report.
On-line edition of David Irving's irregular and scurrilous newsletter Action Report.
David Irving watches the state procession of the Queen Mother's coffin, and comments on the new England
David Irving jots some thoughts in his irregular Radical''s Diary: the growth of hidden censorship in Britain
Barbara Amiel writes truly wonderful things (among some gratuitous smears) about David Irving tells Jerusalem Post to stop claiming the company supported Israel

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