Sydney, Australia, Tuesday, November 25, 2003 Paper emperor at bay By Richard Woods at The Sunday Times ON A Saturday evening in November 1991, Canadian publishing tycoon Conrad Black plonked his imposing frame on the sofa in the London home of Barbara Amiel, a glamorous, feisty journalist he was due to take to the opera. For weeks since the disintegration of his marriage, Black had been mulling over how to escape a life of emotional solitude and had set his sights on Amiel, a longstanding friend. She was, he had grown to realise, rather more than the "cordial acquaintance" he had previously seen. Indeed, he had decided that she was "beautiful, brilliant ... preternaturally sexy" and "ideologically a robust kindred spirit" who had emerged as "the summit of my most ardent and uncompromising desires". He was in love. Amiel, a north London Jewish girl who, via a tough childhood partly spent in Black's native Canada, had fought her way to the top as a hack through good times and bad, was gobsmacked. Or, as Black later recorded, "she fenestrated with astonishment". (He has perfected the prose style of a baroque staircase -- intriguing ornate balusters, but the trudge up to the end is wearying.) Here was the owner of hundreds of newspapers across the world at her mercy on the couch. So what did she do? She advised him to see a psychiatrist. Black consulted an expert at a renowned north London clinic. "I was assured ... that my thoughts and conduct were unexceptionable," he later recorded. Others who knew him at the time believe there was rather more to it. They suspect that he was racked with guilt at divorcing his wife and that, as a staunch Catholic, he feared he would bring retribution down on his head. Nevertheless, a year later Black and Amiel married, a union that was to give birth to an elite social and political salon that has flourished to this day. His business interests spanned three continents -- he once had a 25 per cent interest in Australia's Fairfax newspapers The Age and The Sydney Morning Herald but sold out in 1996 -- and encompassed newspapers that earned him influence with presidents and prime ministers. While his intellectual interests extended to political think tanks and university high tables, her sharpness and glamour brought to the party Vogue editors, columnists and society hostesses. When Black was elevated to the peerage in 2001, they became the power couple par excellence. Then, last week, the heavens opened and punishment, for hubris at least, lanced down. The fortune that has funded their social and political whirl, the lavish multi-home, private-jet lifestyle, may unravel. His rich and powerful friends fear collateral embarrassment from the scandal. For a man liked and admired by many as a generous patron and benign boss -- although remembered in Canada as a ruthless young asset-stripper -- it is a stunning plummet from grace, a retreat worthy of his hero Napoleon. The character behind this extraordinary rise and fall has long had an elevated view of his place in the world and of what psychiatrists call his "sense of entitlement". From his early days he was a capitalist of the purest sort, a champion of individual freedom. Black likes to give the impression that he built a global empire on the $C500 investment he made in 1967 in a small newspaper east of Montreal. The truth is that he had the launch pad of a wealthy family. Black looked on as his father and friends managed their interests and investments. They were all principals in a Canadian conglomerate called Argus, which they exploited through a practice known as "toll-gating". This involved buying shares personally on the stock market, then selling them at a tidy profit to companies related to Argus. Through his father's connections, Black enjoyed entry to a privileged world. When his father died, Black seized control of Argus by persuading two mature women who also had stakes in it to join forces with him. Some observers alleged that he pulled a fast one on other investors, but Black has maintained that his actions were entirely above board. One of the companies in his orbit, Dominion Stores, was struggling. Black and others thought the best strategy was to wind it down -- but not before they had relieved the pension fund of its surplus of $US60 million. The surplus, Black argued, rightfully belonged to the shareholders, although he conceded that it did not look good swiping the money while virtually liquidating the company. He demonstrated his belief that the owner is free to do as he sees fit. It reflected his admiration for William Randolph Hearst, the US publishing tycoon and model for Orson Welles's monstrous Citizen Kane. "All his life," Black once said, "Hearst had a conviction, often outrageous but sometimes magnificent, that the rules that applied to others didn't apply to him." There may be dark aspects to this latter-day Citizen Kane but Black is also admired for his wit, his intelligence and breadth of erudition. "Lord Black's a very decent man," says Tessa Keswick, director of the Centre for Policy Studies, a London-based think tank that Black supports financially. "I think the question at the moment is: Is he honest? I think he is ... he's an academic man, he's a very liberal man ... he really believes in the freedom of the individual." That political philosophy was given full expression when Black snapped up the Telegraph group in 1986 after its owners, the Berry family, succumbed to years of union strife. It was the key that unlocked the political doors. Henry Kissinger, Margaret Thatcher and Ronald Reagan came into his orbit. Black had truly arrived. He proved a benign proprietor, negotiating his way through the unions and nurturing new talent. Hal Jackman, a business colleague from Black's days in Canada, predicted long ago: "Conrad's destiny is to be a poseur ... He'll be courted and wined, get invited to the White House and Buckingham Palace. And he'll enjoy it. But he'll be pushing the bounds."   HIS wife is also an extraordinary figure. Born into a troubled family in far from glamorous Watford, north of London, Amiel grew up pushing the bounds at the other end of the social spectrum from Black. Her father came from a family of communists. When she was nine her parents divorced. Her mother later yanked her off to Canada and her father committed suicide. At 14, Amiel left home and worked in factories and Toronto burger bars to support herself through college. Through hard work, talent and striking looks she propelled herself upwards, becoming editor of the tabloid Toronto Sun. Married three times, she relocated to London with her third husband but that marriage did not last either. Unable to have children, she was free-spirited, fiftysomething and fearless of speaking her incisively intelligent, pro-Zionist mind -- in newspaper columns, on television and at the society events where she met Black. After their marriage, they began a salon life of high style and high expense. The Blacks had homes in London, Toronto, Palm Beach and New York; one of his companies paid part of the costs. On the walls of Black's office in New York hang letters written by Franklin D. Roosevelt, about whom he has just written a 1,200-page biography. The documents were bought by the company for $11million. The art of spending also came easily to Amiel, as she revealed not long ago to the American edition of Vogue. Fly to Canada to get her hair done? Sure. Her wardrobe? Wardrobe was not a big enough word to describe it. Her couture was housed in walk-in closets and ran to 100 pairs of Manolo Blahnik shoes, ranks of handbags (crocodile skin by Hermes) and so many designer outfits that the "overflow has to be kept in yet more closets downstairs off the gym". Black has the reputation of treating his empire as a personal fiefdom. He acted as if Hollinger International, the publicly quoted company at its heart, was a private business. But while he controls more than 70 per cent of the voting shares, he owns only a minority. As the great dotcom bubble burst, triggering the Enron disaster and other business scandals, a drive for proper corporate governance was overtaking executive excess. Shareholder activism was on the rise in the US. At the same time, advertising revenues to Black's newspapers slumped. Tweedy Browne, a New York investment house with a 14 per cent stake in Hollinger International, began to ask about the money that Black and his associates were taking out of the company. "Management fees" amounting to $414 million had been funnelled into their private interests since 1995. Then, 10 days ago, Hollinger had to admit that the investigating committee had found "inaccuracies in prior public filings of the company involving the amount, authorisation and purpose" of payments to directors. Hidden "non-competition" payments also came to light. With the threat of legal action not far away, Black was forced to step down as chief executive, but stayed as chairman. Black has faced crises before and survived. But the omens are not auspicious. Quite apart from the $9.6 million in "non-competition payments" that Black has to repay to Hollinger International, his private company Hollinger Inc (through which he controls Hollinger International) owes $165 million in bonds that fall due next year. In the past it has relied on the "management fees" from Hollinger International to pay interest on that debt. If these dry up, the whole rackety structure must surely tumble down. Late last week Black told The Sunday Times: "I urge you, no matter how addicted you are to representing me as shamed, disgraced and a keystone of scandal, to contemplate the possibility that I might be innocent." Ominously, however, in the US the feared Securities and Exchange Commission -- which has brought down many a dodgy millionaire -- has begun investigating the scandal. Global newsman faces tough scrutiny CONRAD Black, whose media interests in three continents include newspapers such as London's Daily Telegraph, the Chicago Sun-Times and The Jerusalem Post, finds himself under investigation for $42.5million of payments to himself and other executives that were not authorised by the board of Hollinger International, the company at the centre of his media empire. Investigators are also questioning $420 million that was paid by the public company into the private interests of Black and his close associates. Last week Black quit as Hollinger's chief executive. He has also agreed to repay millions of dollars. Threatened with litigation, he may yet lose all control of the business he built. The company has appointed Lazard, the investment bank, to consider its options, including a break-up or sale. In 1991, Black's Tourang consortium bought into the Australian Fairfax newspaper group after that company went into receivership in 1990. Black had a controlling interest of 25 per cent but sold out five years later when foreign ownership rules prevented him from gaining a bigger stake in the company. By 1998 Hollinger was the world's third largest newspaper publisher, with more than 500 titles.   ... on this wesbite about Conrad Black and his newspaper empire   Conrad Black's Jerusalem Post calls for the murder of Yasser Arafat Another over-greedy puppeteer Australian Frank Lowy defends $12.38 million bonus, won't step down as head of Westfield's remuneration committee Flashback: When Barbara Amiel, the wife of Spectator owner Conrad Black, found it in her heart to write truly wonderful things about David Irving Taki makes friends at Conrad Black's garden party Battling B.C. Journalist Doug Collins writes to craven publisher Conrad Black The New Statesman, a leading British weekly, has raised the specter of Jewish control over the media and government. An email letter circulating in London identifies the Jewish directors of the British media "You don't understand, Max. My entire interests in the United States and internationally could be seriously damaged by this" -- Black to Max Hastings French envoy to UK recalled (Black's wife repeated private dinner-party remark about Israel) On-line edition of David Irvings irregular and scurrilous newsletter Action Report. Robert Fisk accused BBC of buckling to Israeli pressure to drop the use of "assassination" Frances ambassador to Britain cannot remember referring to Israel as that shitty little country during a private conversation with a newspaper owner, his spokesman said on Wednesday. On-line edition of David Irving's irregular and scurrilous newsletter Action Report. On-line edition of David Irving's irregular and scurrilous newsletter Action Report. David Irving watches the state procession of the Queen Mother's coffin, and comments on the new England David Irving jots some thoughts in his irregular Radical''s Diary: the growth of hidden censorship in Britain Barbara Amiel writes truly wonderful things (among some gratuitous smears) about David Irving Amazon.com tells Jerusalem Post to stop claiming the company supported Israel

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