BUSINESS

THE STOOL PIGEON

DAVID RADLER PREACHED DISCIPLINE AND LOYALTY, RIGHT UP UNTIL HE BETRAYED HIS PARTNER

KEN MACQUEEN March 12 2007
BUSINESS

THE STOOL PIGEON

DAVID RADLER PREACHED DISCIPLINE AND LOYALTY, RIGHT UP UNTIL HE BETRAYED HIS PARTNER

KEN MACQUEEN March 12 2007

THE STOOL PIGEON

BUSINESS

DAVID RADLER PREACHED DISCIPLINE AND LOYALTY, RIGHT UP UNTIL HE BETRAYED HIS PARTNER • BY KEN MACQUEEN

David Radler—a cynic by reputation, a pessimist by inclination and a homebody by nature—was rarely given to public displays of self-aggrandizement. Social climbing and chest-thumping oratory were the purview of his business partner Conrad Black—traits Radler had come to view with annoyance as their symbiotic partnership of more than three decades became increasingly strained. But the night of Oct. 6, 2002, was a rare and glorious exception. Radler, the publisher of the Chicago Sun-Times, the Jerusalem Post and co-founder and chief operating officer of the increasingly creaky Hollinger International empire, was taking a public turn in the spotlight of Chicago’s high society. He was the guest of honour at a tribute dinner staged at the Chicago Hilton for Israel’s Weizmann Institute of Science.

Radler leaves little to chance and this night was no exception. He may well have earned the accolade

merely on the basis of his papers’ ferocious editorial support of the Israeli right in general and its “war on terror” in particular. But the honour was all but guaranteed by his endowment that year of the Roña and F. David Radler/Sun-Times Scholarship for Biomedical Research at the Weizmann Institute. Including the SunTimes in the scholarship was no empty gesture—the money was taken from the newspaper’s charitable trust, which was chaired by his wife, Rona, at a salary of US$126,000. Some would

grumble, “why was a fund for Chicago’s needy enriching his wife, and financing biomedical research in Israel?” But soon that would be the least of his problems.

More than 1,700 people packed the ballroom that evening. William Daley, the brother of Chicago Mayor Richard Daley, chaired the gala. Civil rights champion Jesse Jackson was there. So was Donald Trump, who would soon strike a deal with Radler to buy and raze the decrepit Sun-Times building.

Drafts of Radler’s speech passed through the hands of Sun-Times editor-in-chief Michael Cooke and John Cruickshank, then its vicepresident of editorial, and now its publisher.

He ignored advice to leaven its tone with humour and emotion, attributes foreign to his public persona. Instead, he launched a no-prisoners attack on the despotic Arab states that threaten Israel, on the feckless left, and on media, such as the rival Chicago Tribune, which find “moral equivalence between soldiers who protect the innocent and suicide bombers who murder them.”

The night was a huge success. Trump was lavish in his praise of Radler’s integrity. “When David says something, you can bank on it,” he told the crowd. “His word is his bond.” Radler earned an ovation, ending his speech with a promise that the SunTimes’s support for Israel “is a legacy that will never change.”

The morass of the Middle East is about the only thing that hasn’t changed in Radler’s world since that night. By November 2003, Black and Radler resigned their executive positions with Hollinger International under allegations of corruption and self-dealing. The circulation figures for the Sun-Times were found to be inflated during Radler’s watch, a blow to the paper’s credibility. Even Roger

Ebert, the paper’s marquee movie columnist, took a shot at Radler, writing of cost-cutting that went so deep the paper’s escalator was shut down to save maintenance costs. “Who would have thought such a penny-pincher might possibly be pinching millions for his own pocket?” Ebert wrote.

The Securities and Exchange Commission filed civil fraud charges in November 2004, claiming Black, Radler and others collected more than US$85 million in dubious payments. U.S. government prosecutors filed criminal fraud charges against Radler in August 2005, a pressure tactic that had the desired effect. Radler cut a deal in September 2005, pleading guilty to fraud. In exchange for testifying against his former partners and colleagues, he accepted a 29-month sentence and a US$250,000 fine. He’d already repaid some US$8 million in inappropriate noncompete payments. Still, the deal is a relative bargain considering millions in fines and 95 years in prison that Black potentially faces.

The prosecution chose well. If anyone can bring down Black it is Radler, the acerbic, driven business school graduate who teamed up with Black and colleague Peter White in 1969 to buy the Sherbrooke Record. Black and Radler shared, if little else, a deep regard for the United States and its institutions, an appreciation for the advantages of unfettered capitalism and a contempt for unions.

If Black was the visionary, Radler was the mechanic, capable of squeezing the last gasp

of efficiency and profit from the fewest number of employees in a diverse range of enterprises: newspapers, of course, but also grocery stores and tractor factories. In his memoirs, Black fondly recalled a chain of small motels they purchased in B.C. “David spent his summer vacations driving between them, reducing staff almost until he would have to say, ‘David and Rona welcome you to our Slumber Lodge.’ ” Radler phoned Black shortly after they bought the company. “There is prima facie evidence our motels aren’t doing well,” Radler reported. “The president of the company committed suicide yesterday.”

No one who knows them described Black and Radler as close, though each saw a benefit in the other’s strengths. Radler worked from down-market offices in Vancouver, where he keeps his swank Marine Drive home, and took an apartment in Chicago. Black worked from Toronto or London, using the flagship Telegraph to cut a swath through Britain’s A-list. Radler got the Jerusalem Post, which he considered more of a cause than a business, and the Sun-Times, in a city with a gloriously freewheeling business environment. “The history

of this city is the history of corrupt men,” says Michael Miner, a media critic for the Chicago Reader. “Business is done here in a different way, maybe in a way that appealed to [Radler] more: wide open and rakish. He took full advantage of it.”

Radler’s plea bargain was a shock to many, Black most of all. “I was surprised,” Black says. “He always protested that he handled everything with complete propriety. I’m surprised he would do a 180-degree turn and admit he did a complete turn. I found that quite startling.” Miner always assumed “they

knew too much about each other to ever break up.” In retrospect, he concedes, Radler isn’t the sort to honour any code of silence. Nor can he see him taking the fall for Black, “this guy whose lifestyle he might always have envied and coveted and resented. That was probably, from Radler’s perspective, his money, too, that Black was throwing away.” By then, any solidarity Radler held with Black was out the window. Author Tom Bower, in his book Conrad and Lady Black: Dancing on the Edge, quotes Radler telling a colleague:

“He took the glory on the way up, he can take the shit on the way down.”

way Those who know Radler say there are many and complex reasons beyond the obvious why, at 64, he was desperate to avoid jail. He does not handle stress well, despite his impervious veneer. He is a bit of a hypochondriac. One extravagance was regular checkups at the renowned Mayo Clinic. And then there is his germ phobia. Those out with Radler know one of their roles is to open all doors. Who knows what filth is on the handles? Radler, in his “man of the people” mode, was

notorious for holding odious hot dog lunches on the terrace outside his office for the SunTime’s executive, says one insider. Radler would sun himself, topping up his perma-tan, eyes closed like a basking reptile, but missing none of the conversation. It usually fell to a lawyer among the group to shoo away any pigeons that attempted to alight. Radler was deathly averse to pigeon droppings.

What Radler can trade for a reduced sentence is just about everything. His strength, and perhaps his weakness, is that he was the

money man, the one who sold Hollinger’s malleable audit committee on the

dubious non-compete payments that landed them

in the glue. He was notorious for working with a minimal paper trail, in contrast to Black, who rarely has an unwritten thought. In the end it will boil down

to credibility: Radler using acres of files to claim the

improper payments were Black’s initiative; Black stating that any illegalities were hatched by Radler—

an admitted felon.

Of the two, Black may generate greater sympathy. “Nobody has any sympathy for Radler,” Miner says. “And I’m sure he knows that. Somewhere he’s got to care, and maybe that’s why the worm turned at the end.” Radler was holding court with two colleagues at a Chicago restaurant in the heady days before the fall. The subject was wealth; how do you get rich, he was asked. Such a question might have sent Black off on a polysyllabic perambulation through historic battlefields both corporate and military, but Radler is an altogether different cat. He reached across the table, grabbed several packets of sugar and ketchup, and stuffed them in his suit pocket. The key, he explained, is “financial discipline,” recalls one of those at the table. He can afford all the sugar and ketchup he wants, he told them, but his kitchen is filled with these purloined packets. “Financial discipline” was a recurring theme under Radler, the executive recalls. Loyalty, ironically enough, was another. Loyalty, unquestioning and absolute, was hammered home: “Loyalty, loyalty, loyalty.”

Somewhere along the way discipline failed Radler. The millions he has admitted to tak-

ing by fraud were impossible to explain away. Who else falls with him depends on his next great public performance, in a Chicago courtroom. He was caught with his hands in the sugar bowl; loyalty became another commodity to sell at the best available price. M