CONRAD BLACK - Journalism from The Dark Side

CONRAD BLACK

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November 18, 2005

Black, Hollinger Execs
Indicted for Fraud

By MIKE ROBINSON, Associated Press

CHICAGO - An arrest warrant has been issued for former press baron Conrad Black following a federal fraud indictment charging that he and three other executives swindled the Hollinger International media empire he once controlled out of millions of dollars.

Black, 61, a former Canadian citizen who is a member of the British House of Lords, was also charged Thursday with siphoning off thousands of corporate dollars to pay for a vacation in Bora Bora, a surprise birthday party for his wife and apartments on Park Avenue in New York.

"For years, Conrad Black lived large on millions of shareholder dollars," U.S. Attorney Patrick J. Fitzgerald told reporters in unveiling the charges at a news conference. "A federal grand jury has returned an indictment that says he did so by means of criminal fraud."

Fitzgerald said that if Black — who has homes in Toronto, London and Palm Springs, Calif. — fails to turn himself in, the government will start extradition proceedings to bring him to Chicago.

Hollinger International Inc. owns the Chicago Sun-Times and other publications in the United States and Canada and formerly controlled the Daily Telegraph of London and the Jerusalem Post.

Black's attorney, Edward Greenspan, issued a statement Thursday night saying that Black is confident that he will be acquitted "if given a full and fair opportunity to defend himself."

"Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment," Greenspan said. "It will be shown that he has, at all times, acted within the law."...

According to the indictment, Hollinger's $2.1 billion sale of several hundred U.S. and Canadian publishing properties was awash in fraud.

Millions of dollars were paid by the buyers to Black and his co-defendants through what was called noncompete agreements but really were just ways of skimming cash, prosecutors said.

Newspaper companies often get payments for agreeing not to compete in the same circulation area after they sell their papers, prosecutors said. But they said that in normal sales such payments ordinarily go to the shareholders, not to individual executives of the company.

Former Sun-Times publisher David Radler pleaded guilty plea in September to charges of taking part in a scheme to siphon off $32 million in proceeds from the sale of newspaper properties in the United States and Canada through bogus contracts with purchasers.

Radler agreed to cooperate in the government's ongoing investigation.

According to the indictment Black used a similar bogus agreement to siphon $51.8 million out of Hollinger International's multi-billion-dollar sale of assets in 2000 to CanWestGlobal Communications Corp.

Black was also charged with using Hollinger International funds to bankroll a lifestyle that included Park Avenue apartments in New York and a vacation in Bora Bora in French Polynesia....

According to the indictment, he used $42,000 in Hollinger International funds to pay for a $62,000 surprise birthday party for his wife in December 2000 at a New York restaurant. The tab included 80 dinners at $195 each and $13,935 for champagne and other wine.

The indictment said another defendant, John A. "Jack" Boultbee, 62, of Toronto swindled Hollinger International out of millions of dollars by having the company pay for the renovation of one Park Avenue apartment for Black's servants and buying another Park Avenue apartment from the company at far below the fair price.

Also charged in the indictment were Peter Y. Atkinson, 58, a Canadian attorney, and Mark S. Kipnis, 58, of suburban Northbrook, who served as secretary to Hollinger International's board of directors when the board was approving some of the agreements.

Kipnis was charged with fraud in August. He has pleaded innocent and was reindicted Thursday. His lawyer Ronald Safer, did not return calls seeking comment.

Atkinson's attorney, Benito Romano, declined to comment, saying he hadn't seen the indictment. It was unclear who represents Boultbee.

Also charged was the Ravelston Corp. Ltd, a Canadian company that Black used to gain control of Hollinger International. It held 30 percent of the shares but 70 percent of the voting rights on the International board.

Black is charged in eight counts of the indictment, each of which carries a maximum five-year prison sentence. But any sentence would more likely be governed by sentencing guidelines that would be unlikely to call for a term as long as four decades.

Corporate Research E-Letter No. 49, September-October 2004

A KLEPTOCRAT IN THE BOARDROOM?

CONRAD BLACK AND THE
LOOTING OF HOLLINGER INTERNATIONAL

by Philip Mattera

In the past, the word kleptocracy – rule by thieves – was typically used to describe corrupt third world despots such as Papa Doc Duvalier in Haiti and Ferdinand Marcos in the Philippines who plundered their own country’s wealth. In recent weeks, the word has gained new currency on the business pages of Western newspapers following its use in an extraordinary report issued by a special board committee at Hollinger International, owner of the Chicago Sun-Times and other major newspapers.

The special committee, headed by former Securities and Exchange Commission chairman Richard Breeden, accused Conrad Black, former chairman and chief executive of Hollinger, and F. David Radler, former deputy chairman and president, of “aggressive looting” during their time running the company. The report charged that “self dealing, misrepresentation and other abusive and unethical practices had become so ingrained in the corporate culture [of Hollinger] that they became commonplace.”

Whereas most greedy corporate executives are content to skim some of a company’s cream, Breeden accused Black and his associates of appropriating nearly the whole dairy. The report describes “a myriad of schemes, fiduciary abuses and fraudulent acts that were used to transfer essentially the entire earnings output of Hollinger” into the pockets of the Black group. The take was estimated at several hundred million dollars.

The Breeden report is a rare example of an official document in which executive greed and corruption are described in blunt terms. The story is even more tantalizing given that Conrad Black is not just another businessman. His background as an arrogant press baron with a right-wing agenda is second only to that of Rupert Murdoch. He has been a major funder of the neoconservative movement that is now under attack for its role in fomenting the invasion of Iraq. Moreover, Black filled his board of directors with the likes of Henry Kissinger and Richard Perle, whose reputations have now been tainted by their dismal performance as overseers of Hollinger’s affairs.

USING THE COMPANY AS A “PIGGY BANK”

Breeden’s 500-page report describes an array of methods by which Black and his associates appropriated vast sums of Hollinger corporate funds. Among these were:

“Excessive and unjustifiable management fees.” In addition to running Hollinger, Black was the company’s majority shareholder. He arranged for Hollinger to pay large management fees to private entities controlled by him and Radler. Breeden reported that these fees, which had not been disclosed to minority shareholders, amounted to more than $200 million since 1997.

Questionable payments. Black and his associates arranged to receive personal compensation in connection with various transactions undertaken by Hollinger. “In one case,” the Breeden report states, “Radler simply ordered Hollinger employees to pay himself, Black and two others $9.5 million in cash at the closing of a transaction, even though the related agreement didn’t provide for any such payment. He then authorized the employee who helped implement the cash transfer to pay himself a $100,000 special bonus.”

Company payments for personal expenses. Like Dennis Kozlowski at Tyco International, Black is accused of using corporate funds to support his lavish lifestyle. The Breeden report cites cases of questionable real estate transactions and use of a company jet for personal trips as well as social events such as a birthday party for Black’s wife that cost Hollinger $42,870. Among the 80 guests at the event, the report notes, were media superstars Peter Jennings, Barbara Walters and Charlie Rose.

There are many more allegations, including charges that Black arranged for his wife to get a “no show” corporate post with a $1.1 million salary and that he frequently saw to it that Hollinger made charitable contributions that he had committed to personally and for which he and his wife took credit.

According to Breeden, “Hollinger was used as a piggy bank for the Blacks.”

www.ctj.org/itep/crp/archives/sep-oct04.htm

January 18, 2004

Hollinger sues Conrad Black,
strips him of chairmanship

NEW YORK (AP) — Newspaper publisher Hollinger International Inc. removed Conrad Black as its chairman Saturday, hours after announcing a lawsuit alleging that he and an associate improperly took more than $200 million from the company.

Hollinger International, publisher of newspapers including the Chicago Sun-Times and The Daily Telegraph in London, said the executive committee of its board of directors removed Black as chairman, effective immediately. He remains the company's controlling shareholder.

The lawsuit was filed in federal court in New York Friday but announced by the company Saturday. It accuses Black and David Radler, the company's former president and chief operating officer, of "repeated and systematic schemes to divert corporate assets and opportunities to themselves."

Hollinger International is seeking recovery of the money, which includes fees paid to both men as part of asset sales. It also wants the return of fees paid to Hollinger International's Toronto-based parent company Hollinger Inc., which is controlled by Black, as well as two privately held companies also controlled by Black.

The lawsuit accuses Black and Radler of altering the company's books to provide a pretext for the payments or to conceal their actions. It also accused them of lying in public and failing to disclose important information to shareholders and the company's independent directors.

The lawsuit marks the latest escalation of tensions between the company and Black, who was forced out as chief executive in November following a shareholder revolt over millions in fees that he and other senior executives collected. Shareholders say the money should have gone straight to the company...

Hollinger International's board includes several prominent public figures, including Henry Kissinger, defense adviser Richard Perle and former Illinois Gov. James R. Thompson.

www.usatoday.com/money/media/2004-01-18-hollinger-black_x.htm#

November 22, 2003

Carlyle Group May Bail
Out Conrad Black

'Ex-Presidents Club' Ready To Throw Lifeline
To Embattled Telegraph Owner

By Jamie Doward and Jessica Hodgson , The Observer - UK

A powerful banking group with close links to the Pentagon, which has also invested money on behalf of the Bin Laden family, is in talks to bail out beleaguered Daily Telegraph owner Conrad Black.

The revelation suggests that Britain's bestselling broadsheet - coveted by rival newspaper barons because of its political influence - may not go under the hammer after all, as Lord Black tries to quell a shareholder rebellion in the face of allegations that he and several acolytes pocketed millions of dollars that was not theirs to take.

Daily Express owner Richard Desmond and the Daily Mail & General Trust, which owns the Daily Mail, are keen to buy the Telegraph titles, despite the fact that questions over the concentration of media ownership would be raised.

The Carlyle Group, known as the Ex-Presidents Club because of the number of former world leaders it employs, is considering taking a stake in Hollinger International, which owns the Telegraph titles, the Jerusalem Post and the Chicago Sun-Times, according to those close to the firm.

'It's unusual for a group of assets to come to the market like this. We would look to sell off the Jerusalem Post and Hollinger's stake in the New York Sun. Conrad [Black] would have to step out of management, but that does not mean he would have to let go of his equity stake,' said a Carlyle source. 'Ideally, we would look to take a 25-40 per cent stake. That would allow us to put people on the board,' the source added.

The move would represent a coup for Black, who is desperate not to sell the Telegraph titles, which have given him considerable influence within British politics and earned him a close friendship with Margaret Thatcher.

Carlyle - which employs former Prime Minister John Major as a director, boasts George Bush Snr and his Secretary of State, James Baker, as advisers, and is headed by Frank Carlucci, Ronald Reagan's Defence Secretary - has invested in media firms previously. The group once owned 40 per cent of France's Le Figaro, and more recently acquired part of French conglomerate Vivendi's publishing assets.

It also part-owns Qinetiq, the Government's privatised defence research laboratories, and CSX Lines, a logistics firm that specialises in shipping heavy equipment for the military. In the past, Carlyle has owned Vinnell, a company that trained the Saudi army.

If Carlyle - which, despite being only 15 years old, manages more than $14 billion in funds on behalf of investors such as George Soros and the Bin Laden family (who are estranged from their son Osama) - does take a stake in Hollinger, questions are bound to be asked over the links between the two firms, both of which have powerful links to the military.

Leading foreign policy hawks Richard Perle and Henry Kissinger sit on the Hollinger board. Black himself is a member of the secretive Bilderberg group, an organisation comprising the world's leading businessmen and politicians, which some have accused of being an alternative world government.

In a separate move, it has emerged that Wall Street fund manager Tweedy Browne will take legal action against the Hollinger board if it is not satisfied with the company's actions.

Shareholders are angry that tens of millions of dollars that Black and fellow directors took in 'non-compete' fees did not go to Hollinger.

'I want to know how this board came to pay out a red cent to these people,' said Tweedy Browne analyst Laura Jeresky.

Hollinger is the subject of an inquiry by the US Securities and Exchange Commission. Investigators are keen to understand the company's relationship with Ravelston Corporation, which is privately owned by Black and has been the beneficiary of millions of dollars which shareholders say should be returned to them.

Toronto-based Ravelston pays millions of dollars in management fees to Ravelston Management Inc (RMI). There are suggestions that RMI may be based in a tax haven. Hollinger spokesman Paul Healy declined to comment.

Guardian Unlimited © Guardian Newspapers Limited 2003

http://www.rense.com/general45/qwe.htm

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This article appears in the January 24, 2003 issue of Executive Intelligence Review.

A Bigger Scandal:
Illegal U.S. Funding of Sharon's Likud

by Anton Chaitkin

EIR's recent series of exposés tracing the dirty money behind Prime Minister Ariel Sharon and the Likud party, have helped fuel the roaring political scandal threatening to wreck what was once thought to be a certain Sharon win in the upcoming Jan. 28 election. Since the series began, Israeli and American journalists and researchers have provided revealing information concerning the Likud's most important foreign funders, which, upon investigation, has proven to be accurate.

Israeli law has, since 1994, prohibited foreign donations to Israeli election campaigns. Yet tens of millions of dollars have continued to pour in from abroad, financing the radical-right Likud political apparatus which is driving the mideast and the world into religious-ethnic warfare. One prominent Israeli jurist told EIR, "Talking about illegal foreign money flows into Israeli elections is like talking about illegal booze in Chicago during Prohibition. Everybody does it, or you just don't survive."

But in the case of the money propping up the Sharon regime, its legal prohibition is made more sinister by its sources, primarily in the United States. They include heirs of the Meyer Lansky/ Moe Dalitz mafia syndicate; Michael Milken's junk-bond "monsters," corporate predators, and looters; and the sponsors of terrorists such as Meyer Kahane and the Armageddon-theme racial and religious provocateurs.

According to knowledgeable Israeli sources, the following names are at or near the top of the list of perpetrators, whose covert funding of the Likud has brought the Mideast to the brink of disaster.

The Lansky-Dalitz Legacy

The most important Likud sources are associates of Michael Milken's multi-billion dollar scams of the 1980s and early 1990s, and of mob bosses Meyer Lansky's and Moe Dalitz's Las Vegas:

Jay Zises: (pronounced "zee-sees"), a Likud funder with his wife Nancy. As of 2000, Jay was President of "Friends of the Israeli Defense Forces in the United States."

Jay Zises and his brother Selig founded Integrated Resources, a hyper-leveraged tax shelter. The Zises debt pyramid blew out in 1989, defaulting on $955 million. The scheme was financed by Drexel Burnham Lambert's junk-bond kingpin Michael Milken and his family, and by those backing Milken, including Zises' former boss Saul Steinberg, and executives of Carl Lindner's dope-running United Fruit/Chiquita Banana. A Federal judge ruling on a lawsuit against Integrated said, "This case arises from the ashes of what is regarded by some as the most spectacular scam of the 1980s."

Milken and others were jailed, but the Zises brothers escaped with a fortune, bought out by Milken's cousin Stanley Zax shortly before Milken was indicted and Integrated collapsed.

Jay Zises created the Roundtable Political Action Committee, a U.S. election campaign-financing arm of the Milken clique, operating from Integrated's New York office. His brother Seymour Zises was president of the coordinating "National PAC," which operated from Washington. Run in tandem with AIPAC (American-Israel Public Affairs Committee), these are the PACs which established, in America, the pattern of dirty-money election financing which rules Israel today.

Contributors to Jay Zises' Roundtable included members of the Meshulam Riklis family. Riklis, a mobster go-between for dope-runner Robert Vesco, Vesco's lawyer Kenneth Bialkin, and the Milken group, was Ariel Sharon's personal financial angel. Riklis donated the ranch where Sharon lives today, and where Sharon, Henry Kissinger, Riklis, Bialkin and others planned the West Bank settlement land-scam and rightist offensive.

Other Roundtable contributors included convicted Wall Street swindler Ivan Boesky; Saul Steinberg's family; the Milstein family, partners in United Fruit; and the family of Laurence Tisch (of Loews Corp. and Lindner's United Fruit apparatus).

Marc Belzberg: Canadian funder of the Likud/West Bank settlers covert nexus. Marc's father and partner, the notorious predator Sam Belzberg, was part of the inner core of the Drexel/Michael Milken junk bond operation, and a sponsor of corporate raider T. Boone Pickens.

The Belzbergs bought up large blocks of stocks, and took "greenmail" from companies wanting to avoid their hostile takeovers. Marc Belzberg and his family holding company First City Financial were sued by the SEC in 1986 and forced to disgorge $2.7 million in profits, for "stock parking" with banker Bear Stearns in a takeover-scam against Ashland Oil.

The Belzbergs were partners in Zises' Integrated Resources, and arbitrage partners of Roundtable PAC co-founder James Tisch, son of Lawrence Tisch.

Marc Belzberg is a director of the Jerusalem Post, the right-wing daily controlled by the Anglo-Canadian rightist Hollinger Corp. of Canadian-born British Lord Conrad Black.

Belzberg is a major backer of Ateret Cohanim, the Sharon-linked Jerusalem yeshiva which is purporting to train the first "priesthood" for the Third Temple, which they plan to build on Jerusalem's Temple Mount, the site of two of the holiest sites in Islam. Belzberg was personally involved in the scheme to open up tunnels under the Temple Mount, with the aim of causing religious warfare over the intended destruction of the Al Aqsa mosque on the Mount.

Ira Rennert: a heavy donor to Likud political campaigns. A partner in the giant Milken/Zises Integrated Resources scam, Rennert parlayed his loot into his current Renco Group conglomerate in Rockefeller Center, New York; his net worth is about $500 million. Since the collapse of Integrated, Rennert has siphoned off funds from numerous businesses.

Besides right-wing Israeli policies, Rennert's loot has paid for a Long Island home with 29 bathrooms and a 100-car garage. Benjamin Netanyahu is often a guest at Rennert's house in Jerusalem.

Ira Rennert and his wife Ingeborg finance the Western Wall Heritage Foundation. As Prime Minister, Netanyahu gave this New York-based group of fanatics physical control over the tunnel entrance to the complexes underneath the Temple Mount, putting Rennert's foundation in charge of screening and admitting visitors.

Marvin Josephson: Likud sponsor and longtime owner of the Hollywood and literary agency ICM (International Creative Management). Josephson has been chairman of "Friends of the Israeli Defense Forces." He was chairman of the National PAC, under its founding president Seymour Zises.

Josephson is a cousin to Murray Wilson, a Lansky Syndicate money-launderer and soldier for the Genovese crime family, who linked up the Russian Mafia with the Marc Rich apparatus in New York.

Marvin Josephson has a few personal clients, including Henry Kissinger. He was the agent for Kissinger's recent book, Does America Need A Foreign Policy?

Henry Kravis: sponsor of the right wing in Israel and U.S. Republican Party. Kravis's ties to the Bush family, apprenticeship at Bear Stearns (Caribbean banker for Meyer Lansky, and the casinos), and multi-billion schemes with Milken, have ballooned into Kohlberg Kravis Roberts' total investment assets of over $85 billion.

KKR used leveraged buyouts, forcing debt on the takeover target, selling worthless bonds to state pension funds, insurance companies, banks and $20 billion to Milken's Drexel Burnham. It was the very model for the bankrupting of the U.S. economy over the past quarter century. Kravis's $25 billion takeover of RJR Nabisco (R.J. Reynolds Tobacco) was the subject of the bestselling book and movie, Barbarians at the Gate. The echoes of that gangsterism are still heard: In December 2002, the European Union charged RJR Nabisco with money laundering in a suit filed in U.S. Federal Court. The E.U. complaint says the firm has "engaged in and facilitated organized crime by laundering the proceeds of narcotics trafficking and other crimes.... Defendants have laundered the illegal proceeds of members of Italian, Russian, and Colombian organized crime through financial institutions in New York City, including The Bank of New York, Citibank, N.A., and Chase Manhattan Bank."

Steven Wynn: tough-guy casino owner and Likud backer. Steve Wynn started in Las Vegas in 1967, with a small interest in the Frontier Hotel casino, then controlled by the Detroit mob. He later took control of the Golden Nugget. In 1980, with financial backing from Drexel Burnham Lambert, Wynn built the Golden Nugget casino in Atlantic City, where Meyer Lansky's Resorts International had opened the first casino in 1978. Wynn sold the Atlantic City casino and took more from Milken's Drexel to build the massive Mirage in Las Vegas, which opened in 1989.

Drexel also funded other casinos, pumping billions of hot dollars into Vegas as part of Dope, Inc.'s transformation of its money laundering center from a city run by the old-style Mob, into a resort center with the organized crime activities hidden behind slick corporate fronts. Wynn is a personal friend of Milken, his neighbor in Lake Tahoe.

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