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Canadian clubbed Conrad Moffat Black was a man of Napoleonic ambition and achievement, but his final attempt to outflank shareholders brought him down. Jamie Doward reports Jamie Doward In the week we learnt, courtesy of
a rogue reporter, that the Queen's breakfast table is festooned with Tupperware,
it is gratifying to learn that at least one member of the aristocracy has tastes
so lavish they rival those of the Sun King, Louis XIV.
As befits an avid historian of pomp and pageantry and a man born into one of
Canada's wealthiest families, Lord Black of Crossharbour has anachronistically
regal tastes that are only now coming into the open as his empire teeters on the
brink of disintegration.
As Black is subjected to the ignominy of a US Securities and Exchange
Commission (SEC) inquiry into the whereabouts of millions of dollars that were
paid to him and several acolytes in the form of non-compete fees - fees which
disgruntled shareholders say belong to them - the high-living tycoon faces the
millionaire's equivalent of having his credit cards cut up.
Cosy deals which saw tens of millions of dollars paid out of the US-listed
Hollinger International, owner of the Daily and Sunday Telegraph, the Jerusalem
Post and the Chicago Sun-Times into a series of Black's own private companies
are now being dismantled.
Worse, if investigators find any holes in Hollinger's accounts, then under
the recently introduced Sarbanes-Oxley Act, Black, the man who signed them off,
and who categorically denies any wrongdoing, could face a jail term. Last week,
as the deadline for vouchsafing the latest set of accounts came and went, Conrad
Moffat Black was forced to stand down as chief executive officer, opening up
further questions about the state of his empire's finances.
Relinquishing his position represents an Icarus-like descent for the
59-year-old Black. 'You've got to understand that Conrad is someone who believes
he is in a league of his own. In his eyes he is not mortal, at least not like
others. The power of his intellect, his huge wealth, his massive network of
contacts, has convinced him of this. This will be a major shock to the system,'
recalls someone who has worked with Black.
Or as Black's former history tutor, Laurier LaPierre, once recalled:
'Conrad's entire sense of life revolved around the idea that, through a
combination of circumstance, accidents and evolution, god is granting him this
extraordinary power that he must guard well and pass on. He has always felt
himself to be a genuine instrument of history.'
But relinquishing titles like the Telegraph, possibly to a rival like Richard
Desmond (on whom Black's views are unprintable) would be far, far worse. Black
positively thrives on the power his papers give him. 'The deferences and
preferments that this culture bestows upon the owners of great newspapers are
satisfying. I mean, I tend to think that they're slightly exaggerated at times,
but as the beneficiary - a beneficiary - of that system, it would certainly be
hypocrisy for me to complain about it,' he once said.
Whatever happens as a result of the SEC investigation, Black is likely to
find himself in significantly straitened financial circumstances - although if
needs be, he could always sell one of his many palatial homes to avert a
cashflow crisis.
There's the stunning Toronto mansion complete with a domed roof modelled on
St Peter's in Rome, a chapel consecrated by the City's Roman Catholic
archbishop, and a 12-acre estate, for a start.
Then there is the obligatory Park Avenue apartment in New York, the
ocean-front home in Palm Beach and the stucco-fronted four-storey pile in
London's Kensington he bought from Australian financier Alan Bond.
Previously when in London he lived in a house in Highgate, but this turned
out to be too small for Black's extensive library. So he bought the house next
door to store his collection of books and then sold it to a shipping magnate a
few years later. Records at the Land Registry suggest he also owns a property in
Chelsea.
All these abodes are stuffed with works of art, historical curios and busts
of great military leaders - Caesar and Napoleon being the two great favourites,
although he also has more than a sneaking admiration for de Gaulle.
Not even Dennis Kozlowski, the disgraced boss of industrial conglomerate Tyco
and the man who become infamous for spending $15,000 on an umbrella stand, seems
to be able to match Black when it comes to a taste for the finer things.
Those powerful or unfortunate enough to have been summoned into Black's
cavernous New York city office could not have missed the series of framed
letters from Franklin Roosevelt to his cousin Margaret Suckley that hang on the
walls.
Black's company, Hollinger, bought the letters - along with many other
Roosevelt artefacts - for $8 million earlier this year. Black maintains they
were a shrewd investment but investors are dubious, pointing out that Black just
so happens to have finished writing a book on the former American President.
Almost equally opulent is Black's office on the fifteenth floor of London's
Canary Wharf. On every wall are paintings and photographs of twentieth-century
warships, a sharp contrast to the yellow silk upholstery of the furniture.
As former Telegraph editor Max Hastings puts it: 'Conrad simply adores being
a tycoon; he seems to get tremendous pleasure out of it.'
Even as a student Black had unfettered tastes for the high life.
Acquaintances from his university days in Quebec recall how Black lived in a
huge, modern apartment overlooking the St Lawrence river and commuted to
lectures in a Cadillac. Earlier he had developed a thirst for enterprise when
selling exam questions he stole out his prep school's office, a feat for which
he was subsequently expelled. His father, George, a one-time president of
Canadian Breweries and an investment guru, ensured his son bought his first
shares - in General Motors - at the age of eight.
These days Black commutes around his empire by corporate jet, although this
is something of a bugbear for Hollinger's angry investors. They question why
Black needs one, never mind two planes, when his headquarters are well served by
airports. They also suggest that Black has used the planes - which analysts say
cost $10m a year to run - for his own personal business, allowing him to jet
around the world to promote his books.
Now, in the face of mounting criticism, Black has agreed to dispense with one
plane and sell the other. But even sacrificing both is unlikely to placate
shareholders, who are incensed at what they see as the siphoning off of their
cash.
And it's not just the millions gushing into Black's privately owned company
Ravelston Corporation, either. Investors want to know why Ł10,000 of Hollinger's
cash went to the Conservative Party. It's a perfectly legitimate thing to do, of
course, but given the company's financial circumstances, was it really
necessary?
Then earlier this year, Hollinger's accounts revealed it was paying more than
$250,000 a year to cover part of the costs of maintaining Black's condominium, a
car in London, personal staff and a chauffeur (chauffeurs seem vital to Black's
way of working.).
It is a style to which Black's second wife, the thrice married right-wing
columnist Barbara Amiel, has grown accustomed. 'I have an extravagance that
knows no bounds,' she declared in Vogue last year. Hollinger's accounts show
that last year Amiel was paid $276,000 by Black's Chicago Sun-Times Inc
division, plus Ł19,500 by the Telegraph for her incisive thoughts as a
columnist.
As befits the union of two of Canada's most glittering names, the pair's
wedding was a lavish affair with a guest list drawn from Who's Who . The
post-wedding dinner was held at Annabel's nightclub in London, where Black was
seated between Margaret Thatcher and the Duchess of York.
The couple's parties are sumptuous fancy dress affairs that draw the cream of
London and New York society. On election nights Black has been known to throw
parties for 500 at the Savoy. 'You go to an English party and you get some cheap
white plonk,' the Spectator columnist Taki told Fortune magazine recently. 'You
go to one of their parties and you eat and drink to your heart's content.'
Friends are almost exclusively of the right and include (or have included)
Thatcher, Mohamed al-Fayed, the late Sir James Goldsmith and the late John
Aspinall, while those arch hawks of US foreign policy, Henry Kissinger and
Richard Perle, sit on Hollinger's board.
The latter two may be in for an uncomfortable ride. SEC sources told The
Observer that it was entirely possible they would be subpoenaed to give
evidence.
What those fusty stalwarts of London's gentleman's clubs, the Athenaeum, the
Beefsteak, the Garrick and Whites - all favourite haunts of Black when in the
capital - think of his current predicament is open to debate.
Such unashamed networking has seen Black rewarded with membership of the
shadowy Bilderberg Group, the high-powered think tank that conspiracy theorists
accuse of being an alternative global government.
As Hastings puts it, Black is 'seldom unconscious of his responsibilities as
a member of the rich man's trade union'.
And then in 2001, Black, having assumed British citizenship, was rewarded
with the ultimate prize, a lordship - which is more than Rupert Murdoch will
ever get. The day after the news was announced the Daily Telegraph devoted no
fewer than 500 words to Black's elevation. It was a sizable amount of space
considering the rest of Fleet Street had room only to report on the events of
September 11, and it suggested that Black's Napoleon complex was working
overtime that day.
Mention of the 'N' word prompts an apoplectic response from Black who, in
recent years, has tried to distance himself from his bellicose hero, albeit with
little success.
Such were his lavish tastes and his unfettered admiration for the emperor
that when a mischievous Fleet Street rumour circulated suggesting Black had
bought Napoleon's preserved penis at an auction, few raised an eyebrow until the
media baron was forced to deny such a preposterous allegation.
Likewise, suggestions that Black has a mock battlefield in the basement of
his Toronto mansion where he re-enacts Napoleon's conquests dressed in the
emperor's full regalia endure even today. In fact the truth is more prosaic. For
years Black would go to an acquaintance's house - one of Canada's leading
financiers - and play war games, with his own re-interpretation of the battle of
Waterloo being a particular favourite.
Not that Black appears to mind what others think. His contempt for
journalists - 'ignorant, lazy, opinionated, intellectually dishonest' - appears
to be equalled only by his dislike of shareholders: 'You're entitled to what you
think but you don't know what you're talking about,' he undiplomatically told
them at his company's last annual general meeting. And as for the corporate
governance posse, Black believes they are little more than 'terrorists'.
It is a robust line, spoken by a robust thinker who espouses laissez-faire
capitalism like no other newspaper proprietor and, unusually, has the intellect
to bolster his claims. He once said: 'We all have to be economic Darwinists and
we must temper that with as much compassion as we can without the ship sinking
through an excess of compassion.'
Or, as Black's father told his son in cruder terms, while crashing through
the balustrade of a staircase to his death: 'Life is hell, most people are
bastards and everything is bullshit.'
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Title: Media | Canadian clubbed
