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Sunday 29 April 2007

Many grey areas in the trial of Black, the colourful tycoon

CONRAD Black's ruse to secretly pay himself $5.5m (€4m) was so audacious that even six years later Richard Burt, a former director of Hollinger International, Black's media company, sounded incredulous while testifying in Black's fraud trial.

Anyone looking at that opening to a report in London's Evening Standard last Friday might understandably have thought the prosecution case against Conrad Black was by now unassailable, but then I saw the author was Tom Bower.

In his day job, Bower is in the first rank of the 'get-the-bastard' school of biographers: he would have reduced Santa Claus, wrote Craig Brown once, "to a reindeer-battering, present-snatching, chimney-creeping, sherry-swilling, out-of-work paedophile".

Richard Branson, Robert Maxwell, Tiny Rowland and Mohamed Al Fayed are among his targets, as, most recently, is Black, who has described his Conrad and Lady Black: Dancing on the Edge as "vindictive, high-handed, contemptuous, sadistic, pathologically mendacious and malicious" and is suing him for €5m.

With the exception of the Standard, which, incidentally, is edited by Bower's wife, Veronica Wadley, the British media seem largely to have lost interest in the Black case, but some Canadian and American journalists soldier on. Bower sits in court along with his enemy Mark Steyn, a loyal friend of Black's. They agree on the basic facts of what went on with Burt last week, even if they drew predictably different conclusions from his evidence.

Burt was a member of Black's three-person audit committee - paid a $50,000 (€36,000) annual retainer with $3,000 (€2,200) for each meeting he attended. "A handsome lion with a mane of grey hair", according to a female reporter, his distinguished career has included a spell as US Ambassador to West Germany and chief negotiator for the US in the Strategic Arms Reduction Talks.

It was Burt's contention that because of management sleight-of-hand, he and his colleagues had no idea that non-compete payments were being deflected to Black and three other directors.

From Bower's perspective, Burt's evidence sank Black, yet he didn't believe that Burt knew nothing of Black's alleged financial misdeeds. "Everyone acknowledges that Black's celebrity board of directors were appointed to tick boxes and sign documents without asking embarrassing questions. On his own admission, Burt played his role perfectly."

From the Steyn perspective, Burt "is peddling a laughable story - that the plain language of the board minutes and the audit committee minutes and the briefings he received before meetings and the [documents] that bear his signature was completely meaningless.

"Sure, he'd signed 'em, approved 'em, voted unanimously for 'em, but those votes and signatures did not mean what they appeared to mean." Under cross-examination, Burt kept repeating that he had missed long passages about non-competes in crucial documents and that it had been up to management to point out anything contentious.

"Was he like that when he was the United States' chief nuclear negotiator with the Soviets?" wondered Steyn. "If so, it's a wonder the Commies didn't win the Cold War."

Steyn was gibbering with frustration at the failure of the defence properly to challenge Burt: they failed even to expose the information that since a brain operation in 2003, he has suffered from memory loss.

He put their inadequacy down to American deference towards ambassadors: "your average English, Canadian or Aussie barrister would have loved nothing better than sticking it to some puffed-up diplomat and leaving him to be scraped off the witness box like so much wilted cabbage."

So Burt's testimony went largely unchallenged. His colleague, the economist Marie-Josee Kravis, had a rougher ride next day. Steyn thought that as one of the smartest women in the country it was embarrassing for her "to testify that she's a dope who must have missed that page, and that page, and the table of contents, and the minutes, and the memo, over and over".

Bower thinks Black is a venal monster who chose directors he could rely on to ask no awkward questions; Steyn thinks Black is, at worst, a bit of a buccaneer, whose directors are lying to salvage their reputations.

Certainly, their evidence has damaged Black, but it has also been pathetic and - in one area - preposterous. Both of them attended a contentious birthday party for Barbara Black at a New York restaurant, for which Hollinger paid two-thirds and both agreed it was social rather than business.

The room was awash with directors and influential journalists and Lady Black sat beside Donald Trump, the megalomaniac with the orange comb-over, with whom Hollinger was in negotiation over real-estate.

Personally, I think they should have soaked Hollinger for the whole bill.

Ruth Dudley Edwards

© Ruth Dudley Edwards