THE INDUCTEES: Conrad Black

Media mogul turned felon

In the 1990s, Conrad Black ran Hollinger International, the world’s third largest newspaper company.  As CEO, he reveled in the healthy revenues and circulation rates.  He also lived up to his title as an English lord, shuttling off on the company jet and snapping up luxury apartments. But when the Hollinger board took a closer look at how he managed company funds, it found that Black, along with other top executives, used creative means to quietly pocket more than $60 million.

When Hollinger went public in 1994, Black held onto 70 percent of the voting stock and behaved “more like a feudal lord than like the C.E.O. of a publicly traded enterprise,” wrote James Surowiecki in The New Yorker.  In fact, the C.E.O. preferred to be called Lord Black of Crossharbour, a title he adopted after renouncing his Canadian citizenship in 2000 to take a seat in the House of Lords.  Black and his wife, conservative columnist Barbara Amiel, enjoyed a fine lifestyle; during his trial, an attorney accused Black of charging Hollinger for $40,000 worth of expenses from a party for his wife and taking a company plane on vacation to Bora Bora – a round trip journey that cost more than $500,000.  Asked about the plane ride, his response was characteristically haughty: he refused to “re-enact the French Revolutionary renunciation of the rights of the nobility.”

At its peak in 1999, Hollinger owned or had major holdings in about 400 newspapers around the world, including the Chicago Sun-Times, the Daily Telegraph and the Jerusalem Post.  Though its annual revenues totaled $2.1 billion, the company also carried considerable debt.  To deal with that debt, Black sold a big chunk of Hollinger’s assets to a Canadian television company in 2000 for $1.8 billion – as well as $32 million in non-competition fees, or payments made in exchange for a promise from Hollinger not to compete with its former properties.  Those fees, however, did not go to Hollinger; they went straight to Black and his colleagues.

During Black’s trial, a number of questionable non-compete agreements came to light, including one made with the sale of a newspaper in Jamestown, N.D.  The buyer testified that, at the time, he doubted anyone would start a rival daily in Jamestown, a town of just 10,000 residents.  There were other unnecessary non-competition fees, like $5.5 million Hollinger execs received apparently not to compete with themselves.

Despite selling a chunk of its North American assets, Hollinger share prices began to fall in 2000 and continued on a steady path of decline.  As advertising dollars disappeared and the forecast looked grim, investors raised questions about Black’s management.  The Hollinger board dismissed Black in 2003 and launched an investigation to answer those questions.

Black spoke out about the charges against him at Donald J. Trump’s wedding in 2005.  According to The New York Times, he told guests not to write him off; “I am about to become a corporate-governance counterterrorist,” he reportedly said.

Meanwhile, Hollinger sold off nearly all of its newspapers, including the Chicago Sun-Times and the Jerusalem Post.  In 2004, the company sold the Telegraph Group, which included the Daily Telegraph and two other major British papers, to the Barclay brothers for $1.3 billion.

Black’s former partner, F. David Radler, pleaded guilty to fraud and agreed to cooperate with the investigation; Black and three other executives – Peter Atkinson, Jack A. Boultbee and Mark Kipnis – pleaded not guilty.  Black was acquitted of nine charges but found guilty of three charges of mail fraud and obstruction of justice for removing 13 boxes of evidence from his office, a criminal act that was caught on tape. At the end of 2007, Black was sentenced to 6-½ years in prison on four charges of fraud and obstruction of justice.