Conrad and Lady Black: Dancing on the Edge

Tom Bower

DEDICATION

For Ruth

CONTENTS

Cover

Title Page

Dedication

Preface

Introduction: The Wedding, 26 January 1985

1 A Timely Death

2 The Stain

3 The Survivor

4 Salvation

5 The Visit

6 Inevitable Union

7 Demons

8 Bliss

9 The Torpedo

10 The A-List

11 Sliding Towards the Edge

12 ‘Thief!’

13 The Purist

14 Resurrection

15 The Trial

Index

Acknowledgements

About the Author

Notes

Praise

Other Works

Copyright

About the Publisher

PREFACE

Conrad Black’s email arrived at 1.15 a.m. on 1 April 2006, April Fool’s Day in London. Black, whom I had known since the mid-1980s, was well aware of this book’s progress, and said he had been contacted by many of his and his wife’s acquaintances, seeking his advice as to whether they should talk to me. His response was nothing if not graphic:

Dear Tom,

Many people have contacted Barbara and me asking if they should talk with you. Our usual response is that you have made it clear that you consider this whole matter a heart-warming story of two sleazy, spivvy, contemptible people, who enjoyed a fraudulent and unjust elevation; were exposed, and ground to powder in a just system, have been ostracised; and largely impoverished, and that I am on my way to the prison cell where I belong. It is the false rise and well-deserved downfall of crooked charlatans; a variant on your treatments of Maxwell, Fayed, and Rowland. You have expressed essentially this view many times that have been reported to me.

He asked me to prove that I was not writing ‘a pompous, defamatory celebration of the supposed demise of people you personally dislike’. In justification of his indignation, and keen that I should understand his innocence, he continued:

The rough facts are that I am an honest businessman; the chances of my committing an illegality are less than zero, this will be clear when my accusers have to prove beyond a reasonable doubt the guilt of innocent people and not just manipulate the agencies of the US and Canadian governments to act on the pre-emptive presumption of guilt and conduct a prolonged assassination of careers and reputations.

Conrad Black believes that he is the victim of political and personal prejudice. He has damned those seeking ‘a big scalp (mine)’, and believes his persecutors first sought his social ostracism and bankruptcy, and later destroyed his ‘fine company’. Under his ownership, he commented with some reason in his second email during the night, the two Telegraph newspapers in London were better ‘compared to what preceded and followed us’. In his opinion, the only victims of his personal and corporate downfall were the creators of a successful enterprise. Other than himself, he argued, no one lost money – shareholders, traders or pensioners. His critics and his American prosecutor contest that claim.

Convinced of his acquittal, Black pledged himself to ‘turn the tables on our oppressors’. He would wreak vengeance upon those responsible for his demise: ‘We will bring this entire, gigantic, malicious persecution down around the ears of its authors.’ He was, he wrote later that night, proud of his robustness. Three years after the news of his predicament emerged, and one year before his trial, he observed that no one could deny that ‘despite my wildly applauded setback I am completely undaunted, and that I am not a tight-lipped source of “no comment”’. Indeed, his high-profile appearances around Toronto had become the stuff of gossip.

In another email during that night, Conrad Black keenly anticipated the stardom that he would achieve at his trial, which was due to start in Chicago in March 2007:

My trial will be timely; Thermidor will have dawned, and legally responsible capitalism will survive, like Talleyrand and Fouché.

He concluded:

I promise a spectacular trial …

Regards, CONRAD BLACK.

Conrad Black’s life story is not the familiar tale of a tycoon’s ‘rise and fall’, or the tragedy of a self-delusional fantasist. Rather, it is the drama of a plutocrat and aristocrat who stands accused as a kleptocrat. He will arrive in Chicago preceded by two damning findings: the first by a court in Delaware, the second by a special committee of investigators appointed with his approval. The investigators’ withering 513-page condemnation of Black’s business methods would have destroyed most men, and his vigorous protestations of innocence have won him some sympathy. The riddle is just how he has found himself in this position. In the search for an answer it is important to understand his marriage to Barbara Amiel, and her own behaviour.

Beautiful, intelligent and vivacious, Barbara Amiel appeared over the years to follow her husband in promoting herself and her opinions. In Toronto, London and New York she became famous for aggressively advancing her libertarian, conservative and politically incorrect philosophy. Exceptionally, she based much of her distinctive and lauded journalism upon her own remarkable life, provocatively describing her personal experiences, especially in relation to drugs, sex, personal relationships and cash. Her 1986 article ‘Why Women Marry Up’ is one of her many prophetic, self-fulfilling accounts of seeking fame and millions which would climax sixteen years later in her immortal admission, ‘I have an extravagence that knows no bounds.’ Quite consciously, she invited the public to examine every aspect of her private life, and in turn wrote revelatory accounts of others’ lives. In many respects she is a unique woman, which was precisely her attraction to Conrad Black.

However, to blame Barbara Amiel for Conrad Black’s apparent downfall would be simplistic. Black is responsible for his own fate, although Amiel undoubtedly influenced the circumstances which have led to him facing his destiny in a Chicago courtroom. She is, of course, not accused of any crime; nevertheless, she did closely accompany him during his meteoric rise after 1992 in London, New York and Toronto. She not only shared his desire for the spotlight, but assumed serious responsibilities in the management of his six hundred newspapers. As a well-paid director of his corporation, she influenced the choice of the papers’ editors, their policies and their appearance. Barbara Amiel is not known ever to have cautioned the staff of those papers to restrain their invasion of other people’s privacy. Her power was never in doubt, not least because she allowed no one to forget her status. In recognition of her contribution, the corporation paid over $1 million of her salary to Black-Amiel Management, an offshore account in Barbados. She also earned substantial sums from stock options, and charged the corporation millions of dollars in expenses for the use of jets, homes, staff and much more. Her conduct made her an important factor in the series of events which has led Lord Black to what for him will be a unique experience – judgement by a jury of twelve common men and women.

Conrad Black’s story is emphatically not a Shakespearian tragedy or the struggle of a flawed hero. In every respect, Black was consciously responsible for his conduct. In the course of the last twenty years, there is no evidence of him confronting dilemmas or crises of conscience about right and wrong. On the contrary, he is proud to have followed his principles. Both Lord and Lady Black are convinced of his inevitable acquittal. But that judgement depends upon an anonymous jury, and there is more than irony in the fact that a man who isolated himself amid privilege throughout his life should now have to rely on the common people to decide his fate. Considering his disdain for the mass censure he has received over the past months, Conrad Black’s certainty that he will be acquitted by a jury is remarkable. The well-educated subject of this book has not taken to heart the lines of John Dryden, the seventeenth-century poet:

Nor is people’s judgment always true:

The most may err as grossly as the few.

INTRODUCTION

The Wedding, 26 January 1985

‘Six months at most. I give this marriage just six months.’

‘Come off it, Posy. How do you know?’

‘Because I lived with David Graham in London. Every night he came home with a different girl.’

Posy Chisholm Feick, a sixtyish Canadian travel writer and socialite, had grabbed the attention of every guest around the table: ‘They came in every shape and size. Even a black girl with a shaved head.’ The band struck a high note in the crowded ‘Stop 33’ room at the summit of Toronto’s Sutton Place Hotel, but, encouraged by her audience, Posy continued uninterrupted. ‘I saw them every morning. He’d rush off to work, leaving the girls to struggle by themselves.’

‘So what?’ asked Allan Fotheringham, the veteran political columnist.

‘Well,’ smiled Posy, with the confidence of an expert in sex and marriage, ‘one of them said he’s a lousy lay. Barbara won’t like that.’ Eyes narrowed and mouths pursed.

‘Just hold on for the ride,’ smiled Peter Worthington, the editor-in-chief of the Toronto Sun.

‘Barbara wants what’s best for Barbara,’ added one man, recalling painful rejection. ‘She’s too restless,’ sighed another failed suitor. ‘And David’s so boring,’ chimed a new voice.

‘Let’s take bets,’ said Posy, spotting the bride swaying in her white, backless Chanel dress. Posy’s wager was certainly high, but the loud Latin American music and the alcoholic haze prevented anyone hearing the size of Allan Fotheringham’s risk. ‘It won’t last long,’ shouted Posy, throwing back another glass. ‘She’s a wild and crazy girl,’ said Fotheringham, speaking with the benefit of carnal experience of the bride. ‘She’s got an eye for the big chance. This is it. She won’t let it go.’

The forty-four-year-old bride now interrupted the jousting at the large round table. After fluttering around a room filled with sober politicians, famous millionaires, rich professionals and Canada’s media moguls, including Conrad Black and his wife Shirley, Barbara Amiel appeared to welcome the sight of the group of rowdy journalists. For twenty years that crowd had represented her social and professional background, but her marriage indicated her removal from them. Famous throughout Canada as an opinionated columnist, Amiel had just resigned as comment editor of the Toronto Sun to join her third husband, David Graham, in London. The rollercoaster years of drugs, adultery and emotional mayhem were over. She was, she had admitted, ‘ashamed of my personal life’.1 She had shared beds with too many ‘beach boys and wildly unreliable bohemians’. They were good for ‘steamy novels but short unions’.2 Years of notoriety would be replaced by domesticity, motherhood and fidelity.

For the uncynical at the wedding party, Barbara Amiel’s choice was understandable. David Graham was handsome and seriously rich. Shrewd investments in the fledgling cable network business had produced a company worth US$200 million,* and homes in Toronto, New York, Palm Beach, St Tropez and London worth another $100 million. For the former middle-class north London girl known to plead, ‘My father was very poor and unemployed,’ the prospect of returning home in style was irresistible. Graham’s motives also appeared unimpeachable.

Barbara Amiel was renowned not only for her beauty, wit and intelligence, but also, among the favoured, as a remarkable sexual companion. ‘Sex is great with Barbara,’ confirmed one of her wedding guests. ‘A great body, and her breasts are big and beautiful. Like lovely fried eggs.’ ‘Yeah,’ agreed another connoisseur. ‘She wants to be admired for her brains, but she keeps pushing her breasts into men’s faces.’ Amiel would be the first to admit that sex, ‘the key to our entire being’, was her trusted weapon.3

During the evening, for most men gazing at a seemingly tough, unemotional personality, Amiel’s thin waist, long dark hair and Sephardic looks were alluring but unobtainable. Only David Graham and her former lovers realised that her harshness was a masquerade, honed during a tough battle for survival, to gain protection from rejection. Behind the façade the bride was a vulnerable woman, desperate to fulfil her lovers’ fantasies. Like cosmetics applied every morning, she relied on her chosen man’s image to project herself. After dallying in the past with left-wing politics, a hippie lifestyle and impoverished men, she had chosen to be reincarnated by marrying class, wealth and looks. ‘You can’t believe how good David is in bed,’ she had said to a girlfriend just days before her wedding, with seeming conviction. ‘I couldn’t do without this man. I had to have him.’

Few believed that Graham, a quiet, unexciting man, matched Amiel’s description. Rather, many assumed, her head had been turned after researching an article for Maclean’s magazine entitled ‘Who’s Who in Canada’s Jet Set’. Gushingly, she had written that the rich, with their private planes and pampered lifestyles, ‘live our fantasies in a world which has no borders, just locations’.4 To join that world, she had decided to ‘marry up’, a phrase she would use in the headline of a subsequent confessional article.5 The ‘trade-off’, she admitted, was crude: ‘her looks for his money – his power as her meal ticket’. Together, Barbara Amiel and David Graham could present themselves around the globe as a ‘power couple’, rich and influential.6

Established ‘power couples’ were scattered across the Sutton Place’s party room. Sitting with Ted Rogers, head of the Rogers Communications empire, was Conrad Black, the owner of an expanding newspaper group. Like many of Canada’s establishment, Rogers praised Black’s intellect, but voiced suspicions about the pompous businessman’s eagerness to make money. Branded as a ‘bad boy’ or a ‘bad joke’, Black had not won admirers since saying in the early 1980s, ‘Greed has been severely underestimated and denigrated, unfairly in my opinion … It is a motive that has not failed to move me from time to time.’ Strangely, he seemed impervious to the impression his admission had created. Bad publicity was nothing new to the ambitious Black. Over the previous two decades, while seeking the spotlight as a supporter of right-wing causes, the aspiring media baron had placed himself in many firestorms. His outspokenness was a characteristic which he shared with Barbara Amiel.

Black’s admiration for the bride was curious. Professionally, she represented much that he despised. Rather than writing on the basis of careful, measured research, she was famous for spewing out gut prejudices. Years earlier, her left-wing sentiments had been interpreted by Black as envy of the rich and powerful, but after changing boyfriends, her politics had somersaulted. The former Marxist had changed colours, and now chanted her praise for capitalism. Meeting Amiel for the first time at a dinner party in Toronto in 1979 had converted Black into a fan. How could he resist a woman who professed her admiration for his blockbuster biography of the right-wing former Premier of Quebec, Maurice Duplessis? Like so many men in ‘Stop 33’ that evening, he had become enamoured of her star qualities. There were also similarities between them.

Conrad Black and Barbara Amiel had both been afflicted by depression, insecurity and exposure to suicide. Both their fathers had killed themselves, and both Black and Amiel had had moments of the deepest despair at certain points in their lives. Neither imagined that the wedding reception was a mere interlude before the consummation of their own explosive relationship, but with hindsight their eventual union seems almost inevitable.

Fate determined a strange climax for both of them at the end of the reception. Sharing a limousine, Conrad Black and Allan Fotheringham argued violently, and parted on bad terms. Across town, lying in bed after her wedding celebrations, Barbara Amiel was presented by her new husband with a pre-nuptial agreement that had been drawn up earlier. ‘Sign here,’ said Graham. Amiel did as she was ordered. She was in love.

* Unless the context indicates otherwise, throughout the book monetary values are given in American rather than Canadian dollars.

1 A Timely Death

FLOPPED IN HIS ARMCHAIR, regularly refilling his glass with neat vodka, George Black sermonised to his thirty-one-year-old younger son Conrad throughout the night of 29 June 1976. Despite the appearance of civility presented by the chintz and the solid furniture in the grand house in the Bridle Path, Toronto’s most prestigious neighbourhood, the resentful sixty-seven-year-old regularly vented his bitterness on the subject of wealth and power. Frustrated by isolation and depression, the ailing recluse had astutely accumulated substantial capital from his business activities, but his withdrawn personality and habits had deprived him of any influence, with one exception: his son Conrad.

Over the years, his father’s lectures on history, power and finance had inculcated in Conrad similar feelings about supremacy and manipulation. Systematically, George had dragooned the youthful Conrad to utilise his photographic memory by giving boastful theatrical performances at social occasions. With little prompting, the precocious boy had paraded his expertise on Napoleon, Franklin D. Roosevelt, Abraham Lincoln, Charles de Gaulle and other political giants. Similarly, if the opportunity arose, audiences were amazed by his encyclopaedic recitations of battleships, armies and warfare stretching back to the eighteenth century. Without hesitation, as a party piece the teenager could recite the names of all the ships, armies and generals engaged in the most obscure European battles, or of successive prime ministers and monarchs over two centuries, or, if allowed, repeat keynote speeches of statesmen long dead. ‘Reel off the fifteen leading ships in the Spanish Armada,’ George Black would order, ‘and the names of all the admirals in the First World War.’ His son’s memory was infallible. Late into the night, amid a mist of tobacco smoke, those tutorials and memory games about world history infected the loner’s mind with the importance of defying the vulnerability of human weakness.

Stifled by depression, George Black failed to appreciate the burden he was inflicting upon his son. The father offered his children no physical affection, and his wife Jean, always known as ‘Betty’, was similarly cold and remote. In that loveless atmosphere, Conrad compensated for his emotional insecurity by revelling in the lives of historic heroes. At eight, he had been smitten by the memoirs of General de Gaulle, the underdog who rebelled against unpopularity and overcame adversity to become a national hero. Defiance was a trait Conrad Black was encouraged to admire by his father, an outsider cruelly spurned by lesser men.

Ever since George Black had been unceremoniously dismissed in 1958 from the Argus Corporation, a sprawling Canadian conglomerate, his resentment had festered. During their all-night sessions, Conrad Black was imbued with a mission to exact revenge upon those responsible for humiliating his father. He knew them well, because, despite his reclusiveness, George Black had introduced his son to a remarkably privileged lifestyle.

Few could have imagined the transformation of George Black over the previous thirty-six years. In 1940 the tall, articulate, aggressive twenty-nine-year-old accountant was managing a factory in Montreal producing propellers for Allied war planes. With pride, he recounted how his company was the only Canadian government-owned manufacturer during the war to earn a profit. But there was also frustration. The graduate from Winnipeg, a provincial outpost, damned his work as unglamorous and his colleagues as ‘a hopeless bunch’.1 In July 1944 his future appeared lacklustre, until the banker Edward P. Taylor, also from the Canadian provinces, offered an escape. Unlike George Black, Taylor had identified a recipe for great personal wealth.

Ten years older than Black, Taylor enjoyed the expensive lifestyle of a clever but unpopular speculator who paraded as a prominent racehorse owner at the Jockey Club of Canada. In 1944 he was convinced that the end of the war would unleash huge prosperity. To exploit that opportunity, he established Argus with a group of like-minded Toronto investors, including Eric Phillips and John ‘Bud’ McDougald. Based at 10 Toronto Street, an elegant, two-storey, neo-classical building not far from Bay Street, the city’s financial area, the partners pooled their assets invested in Canadian companies. Among those investments was Canadian Breweries, which George Black was invited to manage on the company’s behalf.

During those all-night sessions, which started in Conrad’s childhood, George Black regaled his son with stories of his struggle to transform Canadian Breweries into an international success. Promoted as the company’s president in 1950, he had savagely cut costs, dismissed staff and created success from disaster. The prize was phenomenal growth – sales and profits had tripled – delivering Taylor’s ambition to control the world’s biggest brewery, embracing Canada, the USA and Britain. The downside was the effect on Black’s health. Insomniac and increasingly intoxicated, he would arrive in his office at midday, boasting that because he delegated authority his presence was not required. Management of the empire, he insisted, could be achieved by telephone, without the need for him to visit the factories. The essence of business, George emphasised to his son, was strategy rather than micro-management. In reality, ‘delegation’ had become George Black’s excuse to recover from hangovers and the morning’s vodka.

High among Black’s priorities was the need to confront the trade unions, which he despised. In 1958, by forging an alliance with other brewers, he challenged the unions to remove their restrictive practices, provoking an acrimonious strike. As his profits evaporated, Taylor lost confidence in Black. He wanted to avoid strikes and reverse the decentralisation. ‘You’re out of your skull,’ Black told Taylor. In October 1958 George Black was fired. He damned Taylor, cleared his desk and went home. At forty-seven, he was unemployed, and had received no thanks for his achievements. From the sidelines he watched as Canadian Breweries declined. No longer the world’s biggest brewer, the company was sold in 1968 to a competitor.

Bitter but realistic, George Black noted how greed, arrogance and dishonesty had become the hallmark of Argus’s directors. While some in Bay Street embodied the best of Presbyterian honesty, Taylor and Bud McDougald, the company’s president, were financial cowboys enjoying a reckless lifestyle, avoiding taxes and cheating the minority shareholders. At the hub of that intrigue, McDougald used intimidation and flattery to disguise rampant dishonesty, known in Toronto Street as ‘pushing the envelope’. As George Black understood so well, McDougald was using Argus, a company floated on the Toronto stock exchange, as his private piggybank, spending shareholders’ money to fund a tycoon’s way of life.