EDITOR’S NOTE:This piece first appeared in Canada’s Western Standard and is reprinted with permission.
Every other day or so, I get an e-mail along the lines of, “Gone pretty quiet on your old buddy Conrad, haven’t you, Steyn? I guess now he’s no longer worth kissing up to, you’ve dropped him like everybody else…”
Not at all. I did my stirring defense of Conrad and Barbara Black back at the beginning of the year, and all that’s changed in the intervening months is that I’m more convinced than ever that 99 percent of the various “charges” against them are a lot of hooey. Of course, I’m a lazy hack and the fine print of corporate governance isn’t really my bag. But nor is it the bag of 99 percent of the journalism profession, and that’s where Black’s usurpers at Hollinger International have been very ingenious. Whoever’s ghosting their various “reports” on the ongoing internal “investigation” has a much sharper skill than most contemporary novelists at planting the telling detail that leaps out and lingers in the brain: The classic was the revelation that Barbara Amiel had tipped the doorman at Bergdorf Goodman in New York and then stuck it to Hollinger on expenses. That sent every lady columnist in Fleet Street off on various disquisitions about the vulgarity of charging your tips.
All great fun, and a lot less work than ploughing through the more impenetrable provisions of the Sarbanes-Oxley legislation. But, oddly enough, when you look at the details of the Blacks’ “excesses,” they don’t seem that excessive: Hollinger International revealed that Conrad had stiffed the company for some $60,000 for a birthday party for Barbara, a figure that caught my eye because I’d recently paid for my six-year-old’s birthday party in Montreal. Given the difference in size of guest list, status of those in attendance and glamorousness of venue, I reckon, dollar for dollar, Lady Black’s party was a rather better deal than my kid’s. It certainly sounds something of a bargain by the standards of Park Avenue hedonism. But by now the image of Conrad as a socially ambitious fraud egged on by a sinister out-of-control Zionist trophy clotheshorse and enjoying the lifestyle of a Gulf emir on the shareholder’s dime was set in stone. As one Hollinger report put it, the Blacks charged the company for “household staff, including chefs, senior butlers, butlers, under-butlers, chauffeurs and footmen.” Most drafters of anodyne corporate reports would have put the period after “household staff,” but itemizing three different grades of butler is an exquisite touch. The folks at Hollinger International who had it in for Conrad understood their market very well.
I don’t care about any of this piffle–though, if the sneering at Barbara for getting paid for a “non-job” ever comes to court, I’d be happy to appear as a witness for the defense. She was a serious and forensic analyst of the company’s editorial policy: The stinking memo she sent the National Post after the editors allowed the paper to mark Trudeau’s passing by wallowing in non-stop mawkish drivel for days on end would single-handedly end any doubt on that score.
But, even assuming every single complaint is true, where’s the crime? Whether or not a newspaper group’s vice president (editorial) should expense her tips is a matter of opinion, but if she does, and they’re approved, what have the courts or federal regulators or anybody else to do with it? If it’s a crime, where are the victims? Tweedy Browne and other minority shareholders feel that they haven’t enjoyed a good enough return for their investment in Hollinger. But, again, that’s largely a matter of opinion. Under different management, they might have made more. Then again, they might have made less. But the reality is that under different management there wouldn’t be a Hollinger at all. The (at one time) Anglo-Aussie-American-Israeli-Costa Rican-Canadian newspaper group was an expression of the peculiar interests and ambitions of Conrad Black and his associates. Without them, it has effectively ceased to exist. Buying into Hollinger and beefing about Conrad is like investing in Martha Stewart and then saying you don’t like Martha’s recipes and home decor advice: that’s all there is.
When you disregard Tweedy Browne’s gripes about the insufficient return on their investment, what’s left is, according to taste, either some clerical oversights or technical violations–that’s to say, a small number of payments that weren’t approved by the board. Everything else they want from Conrad & Co. was approved at the time by the same independent directors now demanding it back. The line here seems to be that the board were naive, unwitting dupes way out of their league and just ripe for getting stitched up by Conrad. Of all the many characterizations of Dr. Henry Kissinger mooted over the years, this surely is the most unlikely. The notion that he and Richard Perle (official Beltway nickname: the Prince of Darkness) and the other American A-listers on the Hollinger board were merely pliant boobs suckered by the Blacks’ hospitality is absurd. Either Conrad Black and Jim Thompson (former governor of Illinois) have both done something wrong or neither has.
Anything else? Oh, yes. “Non-compete fees.” That means what it says: it’s a payment you make to some guy in order to prevent him going into business against you. When Hollinger sold its Canadian papers to Izzy Asper, Izzy paid several million dollars in “non-competes.” The rap against Conrad & Co. is that these fees were made to Black and others as individuals when they should have gone to Hollinger as a company. The best riposte to that came from David Asper (and that’s not a sentence I ever thought I’d find myself typing). Young Asper made the reasonable point that, when you buy the Calgary Herald and the Edmonton Journal from Hollinger, you pay non-compete fees to Conrad Black in his personal capacity because he’s the one you don’t want coming back to town and starting up a rival paper. As Mr. Asper wrote, “If Lord Black ever decided to sell his interest in Hollinger, it is he–and not Hollinger–with whom we did not wish to compete.”
For confirmation of that, look no further than the present management of the shrunken post-Conrad Hollinger empire. Whoever eventually buys, say, the Jerusalem Post is most unlikely to pay a non-compete fee: There’s nobody remaining at Hollinger who knows anything about newspapers. Why would you be worried about Gordon Paris, the chief exec who now sits in Black’s chair, starting up a new broadsheet in Jerusalem? It’s never gonna happen. “Hollinger” was never more than a handful of guys who happened to be savvy about papers in a large number of markets, big and small, competitive and non-competitive, and now they’re gone nobody’s going to pay any non-competes to the fellows who are left. The reality of the present Hollinger management is the most obvious refutation of their case on most of the non-competes.
On the home front, meanwhile, the Hollinger meltdown is a revealing example of the limits of the Canadian media’s touchiness about national sovereignty. The premise of the case, as it’s been presented to the U.S. courts and regulators, is that half-a-dozen non-resident Canucks–the Blacks, David Radler (who ran the Sun-Times), Dan Colson (who ran the Telegraph) and a couple of other corporate sidekicks–are guilty, and therefore deserve to be hounded by racketeering laws, but all the well-connected bigshot Americans are squeaky-clean and being handled with the utmost tact and deference. Will nobody at the Globe, the CBC, and Maclean’s rise to the bait of American muscle running a non-affirmative action program against hapless Canadians?
Consider the events of last January: Conrad Black, having been deposed at Hollinger International (a U.S. company), attempted, in his capacity as chairman of Hollinger Inc. (a Canadian company), to sell out to the Barclay brothers (a U.K. company, with a Canadian subsidiary). A U.S. court blocked the move. Think about that: A judge in Delaware forbade one Canadian company from selling to another Canadian company. Why isn’t the CanCon crowd up in arms about this outrageous infringement of Canadian sovereignty?
Heigh-ho. It’s easier to do gags about Barbara’s shoe budget and Conrad’s peerage. And, in fairness, one can argue that his elevation to the House of Lords helped reinforce the impression that minding the store was no longer his top priority. One can also argue that most of his present nemeses are figures he brought into the company at a time when he was busy with his FDR book.
But that’s not the important lesson. “Hollinger International” was a mechanism created to put an American facade on what, in its core identity, was an Anglo-Canadian company. Supposedly it was worth it because it gave Hollinger access to American equity markets. But, on the other hand, by subjecting themselves to the regulatory excess of the U.S. rather than Toronto or London, Conrad & Co. wound up having their company snaffled out from under them. As Pierre Lemieux noted in his excellent column in these pages a couple of weeks back, in his biography of Roosevelt, Black had written approvingly of the creation of the SEC, a key development in the role of state restraint on capitalism. The effect of that can be seen in the events of last year: a company shrivelled and gutted while its controlling shareholder is denied control by mercurial judges, frivolous lawsuits, brazen extraterritoriality and an “interim” committee of persons holding no equity in the company which has effectively supplanted the full board.
The final reckoning on whether or not Conrad Black was a great businessman remains to be seen, but he was a great newspaperman and, in Canada, Australia, and elsewhere, readers are the poorer without his vision and his gusto. Meanwhile, Hollinger’s a shell, the future of its two remaining titles is in doubt, and the share price is back down to where it was in January, when Conrad was bounced as chairman. What a great year’s work.