WASHINGTON -- The news from the Conrad Black trial in Chicago is a surprise. The vulpine British press is returning home. Members of the jury have been observed deep in sleep. The circus that was recently predicted by The New York Times has turned into a thunderous bore.
Black is the Canadian "press baron" who over three decades created one of the great newspaper conglomerates in the world. At its height, at the beginning of this century, it was the second or third largest chain of English-speaking newspapers in the world. With the Telegraph papers of London, the Jerusalem Post and Canada's National Post (founded in 1998 by Black), Black could lay claim to being the owner of the most high-quality string of newspapers in the world. Then disaster struck, or was it simply jealousy?
At the New York investment firm of Tweedy Browne, holder of 13 million shares of Black's publicly held company, Hollinger, there arose in late 2001 a restive spirit concerned about "management fees" paid by Hollinger to a private company, Ravelston, which was controlled by Black. Black and his associates got the money. Tweedy Browne's "restive spirit" agitated for an investigation, and the Hollinger board of directors tapped Richard Breeden, once chairman of the SEC, to oversee it. Breeden had become a corporate reformer and the report he eventually deposited has been described by Holman W. Jenkins, Jr. of the Wall Street Journal as "an inflammatory report." It accused Black and his lieutenants or "corporate kleptocracy."
That brought in the feds. Black and several associates were indicted on such charges as racketeering, obstruction of justice, money laundering and mail fraud. Facing some 100 years in prison, Black chose to fight. A partner of his, David Radler, copped a plea. Black was forced out of Hollinger and Hollinger's stock plummeted. Possibly the "restive spirit" at Tweedy Browne has subsided. Since Black has been out Hollinger's shareholders have lost a bundle, though lawyers all around have rung up more than $60 million in fees. There had to be a better way to address this question of "management fees."