For Conrad Black, it must have been a nerve-racking finale
IT’S CLOSING TINE
For Conrad Black, it must have been a nerve-racking finale
“Conrad Black is not a rules guy,” thundered assistant U.S. Attorney Julie Ruder. True, she thundered somewhat tinnily, and when she jabbed the air with her finger it had all the spontaneity of one of those fellows on the runway motioning the plane into the gate. But she made her point, over and over. “Conrad Black doesn’t care. The rules don’t matter to him.”
To be honest, it’s a relief to get to the closing arguments. The last witnesses had dwindled down into endearing eccentrics like the Laughing Realtor and the ex-FBI Funkmeister who only has brothers and sons and cousins on the payroll. But, agreeable company though they were, there was ásense that we’d heard it all. Like some unending slow-motion Wimbledon rally, we’d endured witness after witness being pulled by the government into deep grey (murky criminal activity) and then pulled back by the defence into limpid interior-design ensuite marble-bath pale grey (i.e., normal conduct of business). It was time just
to get on with it. By next week’s dispatch from the windy city, the courtroom will be silent and the jurors will be in their deliberation room deciding the rest of Conrad Black’s and Jack Boultbee’s and Peter Atkinson’s and Mark Kipnis’s lives.
“The rules don’t matter to [INSERT NAME OF CORPORATE NE’ER-DO-WELL HERE]”: It’s a familiar refrain in white collar prosecutions. To modify Leona Helmsley, rules are for the little people. And there’s something inevitable about its recurrence whenever a rich guy attracts the attention of the justice system. But it rang a little odd in Julie Ruder’s presentation. Conrad Black was a rules guy to this extent: he and his fellow defendants didn’t just take the money, they got their clients to agree to it, they drew up contracts for it, they had the contracts signed, they filled in the SEC paperwork, they had the paperwork signed by the independent directors, they sent out memos to the audit committee and the auditors and the lawyers, to whom they paid millions for advice, and whose advice they followed. For a non-rules guy, Conrad Black abided by an awful lot of rules.
And in the end it’s the government to whom the rules don’t matter. Filing the paperwork in triplicate wasn’t enough for Ms. Ruder and her fellow prosecutors. There was still some-
thing ... wrong. Not in a rules sense, just in a wrong sense. After she characterized the defendants’ behaviour as “wilful,” Michael Schächter, counsel for Peter Atkinson, objected that she had misrepresented the legal definition of “wilfulness.” Ms. Ruder replied: “I’m stating it as a factual matter, not as a legal matter.” These lawyers, she suggested to the jury, would use a lot of “lawyer talk,” but surely you’re not gonna sit there and get flimflammed with legalisms and technicalities?
Again, this is a curious line to hear peddled by a government lining up decades of jail time for Conrad Black on the basis of technicalities-based laws such as “mail fraud”—i.e., you don’t go to jail for the millions of dollars, but for sending a hard copy via FedEx of a fax of wire instructions for the millions of dollars. Some legalistic technicalities are more equal than others. President Clinton famously argued that “it depends what the meaning of the word ‘is’ is.” Ms. Ruder thinks the word harbours no such ambiguity. The noncompete contract is, as a point of law, legitimate. The 10Q filing with the SEC is correct. The payment to Lord Black is clearly stated. And, in every instance, the U.S. Attorney’s position is that the meaning of the word “is” is “isn’t.” The paperwork is not proof of innocence but only of how cunning the “cover story” is. As Black’s lead counsel, Ed Genson, pointed out, there’s no way to win that argument: “If they have evidence, you’re guilty. If they don’t have evidence, you’re sneaky.” Still, in their closing, the government belatedly succeeded in imposing a narrative
on events at Hollinger International. Julie Ruder, unlike Jeffrey Cramer in his opening statement, abandoned the overheated claims the prosecution had signally failed to live up to—the lurid talk of Conrad and Co. being no different from “robbers with masks and guns.” “We’re not talking about Al Capone or anything like that,” she said at one point, explaining (somewhat airily) why the statute on “racketeering” was now being used to bust some guys for non-competition agreements re the sale of the Calgary Herald and the Jamestown Sun in North Dakota. In her usual brisk but chilly manner, Ms. Ruder had a line on everything: the Blacks’ Bora Bora vacation on the Hollinger jet (“It’s not his plane. It’s not his company”), Black’s purchase of Hollinger’s Park Avenue co-op at a bargain-basement price (“the only apartment in New York City that had not appreciated a cent in six years of a real estate boom”), Black’s starring role in the closed-circuit security video of boxes being removed from his Toronto office (“Rules don’t matter to Conrad Black. He wanted those documents
out and he took them. Classic, classic Conrad Black.”). And finally his attempt to deflect attention from shareholder criticism by arranging for Donald Trump and his girlfriend to make a cameo appearance praising Hollinger’s management at the 2003 general meeting. “Show ’em a little Donald,” sneered Ms. Ruder with unusual passion for a woman who rarely shows ’em a little anything. “Talk about Melania,” she added. “It is the ultimate disdain. It’s offensive.”
In closing, the prosecution both narrowed the focus and broadened the picture. They conceded that there’s nothing wrong with making a ton of dough, there’s nothing wrong with non-compete agreements, there’s nothing wrong with their tax-free status in Canada or spending the cash on zillion-carat meatballs for the missus at London jewellers. What’s wrong is not telling the truth to the audit committee about why you’re getting
the non-compete fee. Ms. Ruder granted that the defendants were pretty much in the clear on the who, what, when, wherefore and moreover, but the Big Why had been left unanswered. In fact, if you fill in a 10K or an 8K or a 10Q for the SEC, there’s not a lot of room for “why.” Nor is there on your own tax return: they want the numbers not the Stanislavskian motivation behind them.
Nonetheless, Ms. Ruder had laid down a challenge for the defence: this is our narrative. What’s yours? Eddie Greenspan, Q.C., is still very much a foreigner in this Chicago courtroom but he thwacked back on Tuesday. If this is a crime, where are the victims? Where are all those exemplars of the heartrending vignettes that brought tears to the eyes of prosecutor Cramer once he’d tied a pound of onions off the end of his nose? The widow who’d invested her life savings in Hollinger? The hard-working single mom who’d added International to her portfolio in hopes of being able to afford the full cup of gruel at the soup kitchen? “Where are these shareholders?” demanded Greenspan.
“Where are these victims?”
And, if you can’t find the victims, then where is the crime?
For his final thwack at the government piñata, the Toronto barrister decided to stick with the obvious explanation. Governor Jim (The Skim) Thompson, all-around brainy gal Marie-Josée Kravis and former U.S. nucleararms negotiator Slick Rick Burt were not duped by a cabal of Canucks. The audit committee were told about the non-competes, “saw the disclosures and signed their names
to them because there was nothing wrong with them.” The alternative—that Black and Co. constructed a “robbery” that depended on them bringing the scheme to Thompson’s committee for approval—defies belief. “If they’re sending this up to the audit committee,” scoffed Greenspan, “they gotta be the dumbest bank robbers in the world.”
As for David Radler, loathsome though he may be, even he had been leaned on to plead guilty to a crime, even though he was unable to say what the crime was. And, whatever it is he is or isn’t guilty of, all Conrad Black far away in London did was take Radler’s word that everything in the U.S. operation was being done properly. As Greenspan told the jury, “The government wants you to rely on David Radler to convict Conrad Black for having relied on David Radler.”
For four years, the beleaguered press baron has sought what he calls a “defensible perimeter.” This week he chose to take his last stand on the terrain he’d always staked out: innocence. He did nothing wrong. A series of events, lawful in themselves, have been strung into a daisy chain by the U.S. government and retrospectively criminalized. But, except in the imaginations of the prosecutors and the testimony of those they bullied into plea bargains and immunity agreements and other forms of “co-operation,” there remains no crime.
It must have been a nerveracking finale for their defendant. On Tuesday, he sat there and watched the peroration of his lead counsel, Ed Genson, disintegrate into a haze of umms and errs before the attorney asked for a break—pretty much on health grounds—and the judge excused the jury for the day. It would have been a superb performance if delivered as scripted. Delivered by a sick man finding it harder and harder to concentrate, it’s a tougher call: the defendant will have to hope it was good enough. This time next week, the jury will be alone with the evidence, with Ms. Ruder’s narrative and with Mr. Genson’s. And a few days later we’ll find out whose has prevailed. M
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