JUSTICE

The next fight begins

Grounds for appeal, protecting assets, prison choice—the battles aren’t over

JASON KIRBY July 30 2007
JUSTICE

The next fight begins

Grounds for appeal, protecting assets, prison choice—the battles aren’t over

JASON KIRBY July 30 2007

The next fight begins

JUSTICE

Grounds for appeal, protecting assets, prison choice—the battles aren’t over

JASON KIRBY

Sometime in the coming weeks, Conrad Black will receive an inquisitive visitor. Black is no stranger to pointed questions: he has stood his ground against the “swarming, grunting jackals” of the media hundreds of times over the years. But that was then, when Black was a free man, not the convicted felon he is today. When the probation officer sent from the court sits down with him for the first of several meetings to delve into his past, his family, education and work history, it will be unlike any interview Black has ever given—a last, rare opportunity to influence how he’ll spend the next several years of his life.

From the moment the jury in Chicago delivered its guilty verdict, Canada’s most colourful entrepreneur and businessman lost any real control over his destiny. Many of the decisions that will dictate his future, such as the length of his sentence and where he’ll

serve it, will be reached through cold, methodical analysis. Black has vowed to appeal the verdict, a complicated process that could take up to two years. And while some legal experts believe there are reasonable grounds on which to mount an appeal, the fact is, convictions are rarely overturned.

For the time being, Black will likely stay out of prison, at least until he is sentenced. That’s been the case with most other recent white-collar criminals. But he’ll probably be far too busy to savour his freedom, such as it is. Among the issues to be decided this week: whether Black will be permitted to return to Canada to await sentencing or if he’ll have to remain in the U.S.

Already, Black has hired a new legal team to get to work on his appeals. “The trial lawyers are usually too wrapped up in the case at this point,” says Peter Henning, a law professor at Wayne State University in Michigan. Not only did Edward Greenspan and Edward Genson fail to win their client’s freedom, but neither lawyer is an expert in the fine art of appeals. Black will also have a different representative focusing on sentencing issues, and others who will deal with prison placements in order to make sure Black gets

a spot in the best prison possible.

The appeals process won’t seriously get under way until he’s sentenced. In the meantime, there’s the messy question of exactly how much Black stole. With the mail fraud convictions, the government has demanded Black et al. cough up $32 million, most of it coming from Black. Prosecutors have asked the court to order a criminal forfeiture of Black’s assets, including the US$8.5 million in proceeds from the sale of his New York apartment, and his Palm Beach mansion. Back in 2004, the mansion was listed for sale at US$36 million, but it never sold. They’re also after Barbara Amiel Black’s 26-carat diamond ring, worth US$2.6 million. Documents filed by the prosecution make no mention of Black’s posh Bridle Path estate in Toronto, but legal experts say the government will go after anything with Black’s name on it. Black’s lawyers will fight hard to exclude the Florida and Toronto residences from forfeiture, because he bought them prior to the crimes being committed. The Palm Beach property is also complicated by the fact that it is heavily mortgaged—a loan that currently carries a 20 per cent interest rate, according to Black’s lawyers. But ultimately it will be up to Judge Amy St. Eve to decide what is seized and how the proceeds

are apportioned. The forfeiture hearings will play out in August and September; Black is due to be sentenced Nov. 30.

While all that is going on, Black will sit down with his probation officer, whose job will be to draw up a pre-sentencing report for Judge St. Eve. The officer will talk with Black, his family and friends, as well as prosecutors and victims of his crimes —presumably the shareholders who first raised complaints about his pay, and the executives who ousted Black from Hollinger four years ago.

The goal of the report is to give the judge a fuller picture of Black, the man, than what

came out during his trial. The officer will also calculate how long Black must serve under federal sentencing guidelines. It’s a coldly mathematical calculation, where each of his crimes is assigned a number on a chart, and then adjusted to take into account certain factors, such as acceptance of responsibility and the dollar value of the crime. The judge isn’t bound by the report or the federal government’s sentencing guidelines, but experts say most judges follow them closely. The maximum sentence Black faces would be 35 years in prison, and prosecutors have pledged to seek close to the maximum. But defence lawyers insist there were no real victims of the alleged crimes and that there was no criminal intent—so they will push for far less time.

When it comes time for Black’s sentencing, experts believe Judge St. Eve is likely to be tough on Black, even though he was found not guilty of the most serious charges, such as racketeering. Most experts predict he’ll be given between eight and 10 years in prison. “She’s going to nail him pretty good on the obstruction of justice,” says Leonard Cavise, a law professor at DePaul University in Chicago who followed the trial.

It’s at this point, after sentencing but while Black appeals his conviction, that he is most likely to be incarcerated, say observers. A lot

depends on whether the judge feels Black’s appeal has much hope. “It’s become a crapshoot,” says Henning, referring to other whitecollar cases. Jeffrey Skilling, the former CEO of Enron, was sent to jail during his appeal while Bernie Ebbers, the former CEO of WorldCom, was allowed out on bail. Adds Cavise, who believes Black will be carted off to prison: “This judge is a Republican, a Bush appointee. The chances are she’s going to come down hard on him.” If Black is ordered to prison, he’ll be given a specific date to turn himself in, usually 30 to 45 days after sentencing.

Not one to go down without a fight, Black

is sure to mount a vigorous appeal on all conceivable grounds. Each day of the trial the judge made a dozen rulings, and Black’s lawyers will pore over every one of them. Observers already see some areas with potential for success. For one thing, the judge allowed prosecutors to show the jury notes written in Black’s florid style, along with details of his jet-setting lifestyle. Black’s lawyers will fight those decisions, arguing that the evidence appealed to the jury’s class prejudice. James Morton, the president of the Ontario Bar Association, who followed the trial, thinks that argument will be dead on arrival. “While I don’t agree with what the judge did to allow them in, the decision was not grossly wrong,” he says. “It’s the type of thing that the appeals court will defer to the judge below on.”

Observers say Black has a better chance fighting the instructions the judge gave to the jury before their deliberations, specifically the infamous ostrich instruction. The ruling, also known as the wilful ignorance instruction, allowed the jury to consider whether Black and his co-defendants deliberately avoided knowledge of the crimes at Hollinger International. The instruction would have made it easier for the jury to convict Black. “He’s going to go to war over the ostrich instruction,” says Henning. The issue, say experts, is that the prosecution presented evidence that was meant to prove Black orchestrated a conspiracy, so how could he also have had his head in the sand? But while there have been convictions overturned on the basis of an ostrich instruction, they are extremely rare. In all the recent white-collar cases where it was used, only in the case of Ebbers did the courts agree to hear an ostrich appeal, and he lost.

Others point to the obstruction charge as a point of appeal, arguing that the judge shouldn’t have let prosecutors extend their jurisdiction to a crime that happened in Toronto. The judge’s refusal to let Black’s lawyers recall David Radler to the stand, and her decision not to provide transcripts of testimony to the jury, could also be issues for appeal. But lawyers say that beyond those, taking issue with the jury’s judgment usually falls flat. The only hope is to look for an error in law in hopes of forcing a retrial.

It will be a long time before Black knows for sure whether he’ll serve his full sentence or not. The appeal could take more than two years to wind through the seventh circuit court of appeals. A panel of three judges will hear the case, first in the form of written briefs and then through oral arguments. If the panel overturns Black’s conviction, the prosecution can appeal. But if the judges uphold Black’s conviction, he can still ask for yet another rehearing by the same appeals panel.

Finally, if all else fails, Black will no doubt vow to take his case to the U.S. Supreme Court. But there’s almost no chance he’d succeed. Of the thousands of cases it hears each year, only about a dozen are criminal cases. And there is still the question of how Black will keep paying for all this. With practically all of his assets tied up in lawsuits—including one launched by the SEC—his property mortgaged to the hilt and subject to forfeiture, one has to wonder how long he can go on fighting. As Ed Genson said in court last week, “Black has no money that he doesn’t have to go to someone else to get.”

Once the last of his options and his money are exhausted, Conrad Black will have no choice but to adjust to his new life behind bars. M

Steve Maich

WHEN THE TIME FOR SENTENCING ARRIVES, MOST EXPECT THE JUDGE TO COME DOWN HARD ON BLACK, SENDING HIM TO PRISON FOR AT LEAST EIGHT YEARS