When the FBI Comes Calling…®

March 10, 2007

Black retools his image, professes innocence ahead of fraud trial in Chicago

By Romina Maurino

TORONTO (CP) _ As he prepares for the high-stakes battle of his life _ one that will determine whether he will regain his status within the elites of three countries or spend the rest of his life in a United States jail _ Conrad Black is fighting in the court of public opinion to persuade all that he's an innocent businessman who was betrayed by friends, misled by advisers and unfairly targeted by an overzealous U.S. prosecutor.

The larger-than-life figure once headed the world's third-largest newspaper empire and hob-nobbed with royalty and some of the world's most powerful people. He is Lord of Crossharbour, a military expert, a published historian and a former media mogul who resurrected failing papers.

Now he stands accused of securities fraud and of using shareholder funds to pay for shopping excursions for his wife, Barbara Amiel Black, for a two-week vacation in Bora Bora, for refurbishing his Rolls Royce and other personal expenses.

He has vehemently denied all the charges against him, calling the allegations a ``monstrous defamation'' and vowing to prove his innocence in court.

His trial could last up to six months and cost him millions of dollars in legal fees, with Ed Greenspan, one of Canada's most prominent lawyers, leading his defence.

``I'm convinced he thinks he's innocent,'' said Peter C. Newman, an author and journalist who chronicled Black in the Canadian Establishment books more than 25 years ago.

``This is a man who has a huge opinion of himself and genuinely doesn't believe that he could be dishonest, that he could do some of the things that he's charged with.''

In the months leading up his fraud trial, which begins Wednesday with the start of jury selection, Black has filed dozens of motions aiming at re-shaping his image and bettering his chances, including a request in September to dismiss some allegations that he argued risked prejudicing the case by pointing out how rich he was.

``A criminal trial is a combination of fact and drama,'' said Jacob Frenkel, a former enforcement lawyer for the U.S. Securities and Exchange Commission and a former U.S. federal prosecutor

``For somebody who testifies, particularly the accused, there is definitely a performance aspect. If he testifies, how well he performs could be the difference between conviction and acquittal.''

Black's perceived wealth always seemed a mark against him in the eyes of some, especially when combined with his intelligence, love of big words and interest in fine things. His aristocratic aspirations also became evident in 2001, when he gave up his Canadian citizenship to be named a British lord.

He appears to be keenly aware of how those choices may be perceived by a jury, and has fought to remove references in court filings to the fact that he is a lord, owned multiple houses, had ``servants'' and a chauffeur, threw parties worth thousands of dollars and that he planned to decorate his New York apartment in a ``lavish fashion.''

A typical juror, he has said, would not engage in or identify with any of those things.

In recent weeks his legal filings have become more personal, defending his wife's honour and saying she is being unfairly portrayed in an attempt to turn his trial into a ``circus-like sideshow.''

Black has also moved to bar e-mails sent to him by his wife from being introduced as evidence, and hit British author Tom Bower with a libel suit in Canada, alleging his 436-page book _ ``Conrad & Lady Black Dancing on the Edge'' _ depicts his wife as ``grasping, hectoring, slatternly, extravagant, shrill and a harridan.''

Experts say Black's push for a new image may help his case and be a bit of a rehearsal if he decides to take the stand in his own defence.

James Morton, head of litigation at Steinberg Morton Hope and Israel in Toronto and president of the Ontario Bar Association, says Black's efforts to be seen in a more positive light are both a response to the way the prosecution has tried to present him and an attempt to begin re-shaping his post-trial future.

``You don't get convicted in the court of public opinion _ it's ultimately the judge and the jury who decides _ but there's no question it can have an effect and presumably Lord Black is also concerned about the future,'' he said.

``Let's suppose he's found not guilty, he's still an important prominent businessman who will want to do deals in the future.''

Black is facing charges of mail and wire fraud, money laundering, obstruction of justice, racketeering and criminal tax violations. If convicted, he faces up to 101 years in prison.

Also charged are former Hollinger executives Jack Boultbee, Peter Atkinson and Mark Kipnis, who face mail or wire fraud charges.

All four have pleaded not guilty, and the claims have yet to be proven in court.

Black's longtime trusted associated David Radler, former president and chief operating officer of the Hollinger group and former publisher of the Chicago Sun-Times, turned against his former boss, pleading guilty to one charge and is expected to testify against Black and the others.

Ravelston Corp., the private corporation Black had used for leverage to gain control of his newspaper empire, pleaded guilty to one count of fraud in Chicago on Monday _ despite his objections _ and agreed to pay US$7 million in fines. Hollinger Inc. has also made a deal with prosecutors to avoid charges.

The case against Black will be argued by a team of four U.S. prosecutors led by assistant U.S. attorney Eric Sussman on behalf of Patrick Fitzgerald's office, the U.S. attorney for the Northern District of Illinois. Fitzgerald is a bulldog justice official and has been dubbed ``the prosecutor who never rests.''

Fitzgerald's recent achievement was a guilty verdict in the trial of Lewis (Scooter) Libby, the former senior White House insider who was convicted on charges of perjury, obstruction of justice and making false statements.

``Without question Conrad Black is facing the full force and fury of the United States government through its federal criminal prosecutors,'' said Frenkel.

The racketeering charge is one of the most severe, and comes with very serious penalties attached to a conviction, as well as seizure of assets.

``It makes it sound like he was running a Mafia organization,'' said Douglas McNabb, a senior lawyer at U.S. firm McNabb and Associates.

Morton said a conviction will likely lead to jail time to be served in the United States _ where sentencing greatly differs from that of Canada and includes ``immensely long sentences.''

A century ``is a ridiculous sentence for anyone _ you sentence a baby to (that time) and it'll die in jail,'' he said.

Black's troubles began in 2003, when Wall Street investment firm Tweedy Browne Co. sent a ``demand letter'' to Hollinger International asking its directors to investigate payments made to its executives, including Black and Radler. It also filed the letter with the U.S. Securities and Exchange Commission.

A committee was formed within Hollinger to investigate and determine whether shareholders were receiving fair treatment.

That led to a federal investigation, which focused on the selloff of small newspapers across the United States and Canada by Hollinger and so-called non-compete agreements that sent millions of dollars to Black and fellow executives.

Prosecutors say Black and the other executives were not entitled to the non-compete payments and laid wire fraud charges that described the payments as part of a ``a scheme to defraud'' Hollinger International and its shareholders.

In addition to the main criminal case in Chicago, Black is also embroiled in a web of lawsuits with his former companies.

He is being sued, along with Hollinger Inc., by Hollinger International, in a suit that alleges they looted more than US$400 million from the newspaper publisher. Hollinger Inc. is itself suing Black, his management company and former directors over management fees.

Black, with a reputation for litigiousness, has responded with several lawsuits of his own against numerous corporate and media critics and is seeking hundreds of millions of dollars in damages.

Under Black, Hollinger International owned the Chicago Sun-Times, the Daily Telegraph of London and the Jerusalem Post, among other newspapers. The Daily Telegraph and the Jerusalem Post have been sold and the name of the company has been changed to the Sun-Times Media Group Inc.

In some ways, his public relations campaign appears to be working, with some media outlets putting forth a more sympathetic portrait of Black.

In an interview with the National Post, the newspaper he founded in 1998, Black said he was confident public opinion was finally beginning to turn in his favour.

``It took an adjustment for people to think of me as an underdog, but that's what has happened,'' he said. ``And compared to the U.S. government, the most powerful institution in the world, most everybody is an underdog.''

As Newman points out, Black is so determined to prove his innocence that he's unlikely to be satisfied with a not-guilty verdict.

``Most people would be happy with a jury that would say you're not guilty,'' he said.

``But not Conrad, he wants his innocence proven.''

Yet despite that show of characteristic confidence and bravado, Newman said he doubts Black is really as confident as he sounds, because he's ``too intelligent to not know what trouble he's in.''

``Think of the alternative _ he's either innocent or he's guilty, but if he's guilty . . . he could spend the rest of his life in jail.''

Public opinion has been mixed, with spurts of support blossoming on some areas but often withering away.

An ``Ad Hoc Committee for Conrad Black,'' purporting to raise symbolic donations through its website ``dedicated to the support of Conrad Moffat Black in his current battle with grandstanding U.S. prosecutors and a hostile left-wing press,'' was revealed as a hoax by Canadian satirical magazine Frank earlier this week _ after fooling various media outlets and Black himself.

Still, experts say, anything said about Black in Canada is unlikely to have an impact on the trial or reach the jury pool.

``It's a bigger story in London and in Toronto than it is in the U.S., despite the fact that he had what amounts to a national security council as a board for Hollinger once upon a time, with (Henry) Kissinger and Richard Pearl and others,'' said Porter Bibb, managing partner at Mediatech Capital Partners in New York.

``He is generally not known as a media mogul in this country.''

And while there's always a component of the accused in government prosecutions being, on some level, a victim, arguments about overzealous prosecutors aren't likely to have much impact on an American audience.

``The public is totally in support of bringing down these corporate moguls who are seen to be abusing the fiduciary responsibility they have of representing shareholders,'' Bibb said.

Once all is said and done, and if he is found not guilty, Black has said he and his wife ``look forward to returning to London, when I have been vindicated, later this year and then dividing our time between London and Canada.''

He will also have to deal with dozens of civil suits that have been filed against him, and plans to unleash some others of his own.

``We don't know whether he will be in prison for the rest of his life, but we certainly know he's going to be in court the rest of his life,'' Newman said.