"Now that I have learned more of the fallibility of American justice, which does convict many people, who, like me, would never dream of committing a crime in a thousand years," he wrote.
Black is out on appeal because the US Supreme Court last month threw out Jeffrey Skilling's similar conviction for so-called hoest services fraud on grounds that the statute was unconstitutionally vague. (See my post here.)
It's certainly true that prosecutors have been overly aggressive in using the honest service fraud charge to criminalize conduct that is merely unethical. The SCOTUS decision trimming the statute back was thus long overdue.
Having said that, however, there's been a tendency by some on the right -- especially Mark Steyn -- to whitewash Black's record. So let's not forget that Conrad Black committed a massive scheme of unethical and fraudulent conduct.
Delaware Vice Chancellor Leo Strine's opinion in Hollinger Intern., Inc. v. Black, 844 A.2d 1022 (Del. Ch. 2004), made the following findings of fact:
- "Conrad M. Black, the ultimate controlling stockholder of Hollinger International, Inc. (“International”), a Delaware public company, has repeatedly behaved in a manner inconsistent with the duty of loyalty he owed the company." (1028-29)
- "During the course of his dealings, Black misrepresented facts to the International board, used confidential company information for his own purposes without permission, and made threats, as he would put it, of “multifaceted dimensions” towards International's independent directors." (1029)
- "By late October 2003, the Special Committee had come to a troubling conclusion; namely, that $15.6 million in so-called “non-competition” payments had been made by International to Black, Radler, Atkinson, and Boultbee-i.e., the International management team-without proper authorization. Furthermore, another $16.55 million in “non-competition” payments had been made by International to Inc.-even though Inc. had no operational capacity to compete with anyone. Of these amounts, Black had received $7.2 million personally, as had Radler." (1036) In other words, Black paid himself $7.2 million of the shareholders' money (remember that his economic stake was only 15%) with no - nada, zilch, nil - independent authorization. Hollinger was not Black's personal piggybank, but he treated it as such.
- "After performing its own inquiry into the non-compete payments, the [Hollinger] Inc. audit committee presented a report to the full Inc. board on November 19, 2003 that included various recommendations. Among other things, the Inc. audit committee recommended that Black, Radler, and Boultbee immediately resign from their management positions at Inc., and that Atkinson, Boultbee, and Radler resign from Inc.'s board of directors. On November 21, 2003, the five non-independent directors voted against taking these actions, over the objection of all four independent directors. The independent directors promptly resigned from the Inc. board." (1044)
- In violation of contractual obligations he had undertaken, Black interfered extensively with efforts to undertake a financial restructuring of Hollinger. (1045ff)
- "In late December, Black was questioned by the SEC about matters within the scope of the Special Committee's investigation, including the non-competes. He invoked the Federal Constitution's privilege against self-incrimination and refused to cooperate. Specifically, Black refused to answer any questions regarding the non-competes on the ground that his answers might incriminate him. By doing so, he denied the SEC the full cooperation of International that had been promised when the Restructuring Proposal was announced in November." (1049)
- "Black also began steps to repudiate his commitment to repay the monies due back to International under the Restructuring Proposal." (1049)
Strine concludes: "First, having had a three-day evidentiary hearing, I am in a good position to make certain credibility determinations and have done so. ... As to Black himself, it became impossible for me to credit his word, after considering his trial testimony in light of the overwhelming evidence of his less-than-candid conduct towards his fellow directors. In some ways Black was feistily direct, flat-out admitting that he viewed himself as having no obligation to spend time on the Strategic Process after his removal as CEO, despite ¶ 6 of the Restructuring Proposal. Black also vigorously defended his failure to inform the International board of his discussions with the Barclays. But then again, he could hardly deny these facts. On more debatable points, I found Black evasive and unreliable. His explanations of key events and of his own motivations do not have the ring of truth. I find it regrettable to say so but it is the inescapable, and highly relevant, conclusion I reach."
Update: Black did get one thing right: "I saw at close range the failure of the US war on drugs," he said, "with absurd sentences, including 20 years for marijuana offences, although 42 per cent of Americans have used marijuana and it is the greatest cash crop in California."
