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Thursday, November 27, 2003 - Kislev 2, 5764

 

 

 

Blackout

By Sara Leibovich-Dar

Conrad BlackAT A Hollinger International shareholders meeting in New York in May, Conrad Black was very upbeat. Black, the CEO, chairman and major shareholder, arrived with his wife, journalist Barbara Amiel, blew kisses to Donald Trump (and his model-girlfriend) and told the shareholders that all the talk about meddling with company funds was a bunch of hot air. "Do I look worried?" he asked a reporter from Fortune Magazine who accompanied him to the meeting. "I'm not."

In June [2003], Black published a letter in The Guardian. Hollinger has no need to sell off assets, he wrote. In September, he was still sounding very sure of himself. "You can ask the question a thousand different ways," he wrote in an e-mail to a reporter from Canada's National Post. "In the end, you'll have to accept the fact that everyone at Hollinger behaved properly."

Last week, Black, 59, resigned as CEO of Hollinger. Four other senior executives resigned, too, in the wake of an internal investigation that found that they had taken millions of dollars of company money without authorization from the board of directors. The U.S. Securities and Exchange Commission is currently conducting its own investigation, which should conclude about a month from now. Black, who at age 33 was called "the wunderkind of the Canadian business world" and just four years ago was the third largest publisher in the world, with 400 newspapers in his empire, will now be seeking buyers for the 144 newspapers still under his control, including The Jerusalem Post.

At The Jerusalem Post, they were stunned by the turn of events. "No one from Hollinger talked to us," says editor Bret Stephens. "It took us by surprise. We knew that there were problems, but we never imagined that it would lead to the resignation of the senior management. We are waiting to see what will happen and who will buy the newspaper." One possibility is that the paper will be sold to Tom Rose, Hollinger's representative in Jerusalem. Rose declined to respond to questions and hung up the phone. But even after 14 years under Hollinger's control, a transfer of ownership at The Jerusalem Post isn't seen as such a worrying event. "It can't be any worse than what's happened already. We're glad that this nightmare is going to come to an end," says a member of the newspaper's board.

Since Black acquired The Jerusalem Post in April 1989, there have been seven different managing editors and three different owners' representatives. Dozens of employees were either laid off or resigned, salaries were cut and distribution decreased from 25,000 in 1988 to about 16,000 today. In recent years, the atmosphere at the newspaper has not been pleasant. Reporters and editors have been heard to refer to it as "Sodom and Gomorrah."

"The mass layoffs are a real bloodbath," one reporter says anonymously. "That, and the total scorn for journalists and the way we're treated like blue-collar workers, made working at The Jerusalem Post impossible."

"It's just unfortunate," former National Post editor Kenneth Whyte says by phone from Montreal. Whyte edited the paper when it was under Black's control and has remained a close friend. "I'm disappointed for him. For so many years, he invested in building this empire and now he is losing it. There's no excuse for the mistake that he made, if he really did what he is accused of. He should have been more careful."

People like Black know no limits when it comes to power, they want it all and operate according to different rules, Peter Newman, a reporter for the Canadian weekly Maclean's Magazine - who wrote a biography of Conrad Black 20 years ago - says in a phone conversation. "I spoke to him recently. He talked arrogantly, and said that the accusations against him are propaganda from people who are trying to bring him down. And he was sure that he would manage to get out of it."

Journalist Richard Siklos, who also wrote a biography of Black, eight years ago, says in an e-mail: "The impression that's left is that at a certain point, the company became about supporting his grand lifestyle ... Black's philosophy toward running his companies has always been that those in control call all the shots - including how much they pay themselves - and if minority shareholders don't like it, they can 'vote with their feet' and sell their shares ..."

A craving for status

Conrad Black has a big appetite for wealth and status symbols, says one of his friends, who believes that this compulsive craving is what led to his downfall. Barbara AmielFor years, Black sought to obtain a British noble title. "He did want it," Barbara Amiel had written in Maclean's, not long after her husband's appointment was blocked by Jean Chretien. "We live in England. He cares about policy issues and has a remarkable sense of history. Playing a role in the House where lords Denning, Disraeli and Carrington had spoken thrilled him ... The only parliamentary debates that have any real substance are found in the House of Lords." Black himself explained that it "would be the only opportunity I would ever have to be any kind of legislative person."

In October 2001, Black was given the title of Lord Black of Crossharbour, after the area in London where the offices of The Daily Telegraph, one of his newspapers, are located, but his path to the House of Lords was far from smooth. In 1999, it was suggested to him that there was a chance he could receive the title of "Lord." Black hastened to request British citizenship. Within two days, with the help of connections, he held both a Canadian passport and a British passport. But then he discovered a bigger obstacle standing in his way: Canada's prime minister, Jean Chretien, informed Tony Blair, who had included Black on the list of candidates for the House of Lords, that Canada would not be pleased to see one of its citizens become a member of the British House of Lords. Chretien cited an 80-year-old statute, the 1919 Nickle Resolution, which prohibited Canadian citizens from being granted British peerage.

Conrad BlackBlack was furious. "Did you see what that bastard has done?" Whyte says Black said to him on the phone late that night. His next phone call was to Chretien. "I demand that this problem be resolved within 48 hours," he said. Chretien was unfazed and suggested that he take it up with Tony Blair instead.

Black went to war. He sued Chretien for $25,000, claiming that his action caused him great public embarrassment. He sued Chretien for abuse of power, malfeasance in public office and negligence. The press jeered. "Also, suing somebody for having caused you 'considerable public embarrassment' is sort of a, well, public embarrassment," Calvin Trillin wrote in The New Yorker. Canadian journalists mockingly dubbed Black "Lord Almost" and "Lord Nearly Nearly." The court wasn't impressed either and dismissed the lawsuit without hearing any evidence. Any question regarding the prime minister's motives should be taken up in Parliament and not in court, it said in its ruling.

Black appealed and lost again. His legal advisers finally made him understand that if he wanted a British title, he would have to give up his Canadian citizenship. Even though he'd declared several times that he would never do that, after his appeal was denied, Black decided a title was more important to him than his Canadian passport and he issued a statement, saying: "Having opposed for 30 years precisely the public policies that have caused scores of thousands of educated and talented Canadians to abandon their country every year, it is at least consistent that I should join this dispersal."

Selling his 'baby'

As part of this process, he sold 140 Canadian newspapers to CanWest for $2.46 billion; CanWest is controlled by the Asper family, a Canadian Jewish family that also expressed interest in acquiring Israel's Channel 10 last year. Even though the deal was considered the largest ever in Canadian media, Black felt defeated. He maintained that it was solely the result of business considerations, but no one believed that he would have given up all the Canadian newspapers if it weren't for his desire to obtain a British title. The fact is that within the framework of the deal, he was forced to sell half of the ownership of his "baby," the National Post, after investing some $200 million in it and losing $100 million (he parted from the second half several months later). He did not show up at the press conference held by the Asper family, but that apparently didn't stop him from making the most out of the sale.

CanWest paid Hollinger $53 million in return for Hollinger's promise that it would not compete with them in Canada. Black and four senior executives are now accused of taking part of that money without the authorization of the company's board of directors, even though so-called "non-compete" payments are supposed to go into the company's coffers. Black promised to return some of the money, but the shareholders' group, headed by Christopher Browne of the Tweedy, Browne investment house in New York, says that, in recent years, Black improperly collected over $200 million in fees, and is demanding that the entire sum be recovered. The investigation took place last year after Browne promised that, like an animal, he would not release his prey.

Black continued to project arrogance and optimism and did not alter his ostentatious lifestyle at all. He has several homes in the U.S. and England and a large estate in Toronto with a church inside the house. Black grew up in an Anglican family and later became a Catholic. This year, Hollinger paid approximately $250,000 for the maintenance of his home in New York, where he has resided recently, paid part of the salaries of the employees in his homes in New York and London, and also paid for his car and driver in New York and London. Hollinger also paid $8 million to purchase various souvenirs from President Franklin Delano Roosevelt's era. Black wrote a book about FDR. The documents are a good investment, he explained, and their purchase has nothing to do with the book.

In 2001, while Black was enjoying an annual salary of $6 million, Hollinger lost $335 million. In 2002, the company's losses totaled $238 million. The Telegraph Group, which includes The Sunday Telegraph, The Spectator, and The Daily Telegraph, Black's flagship paper, lost approximately $40 million in 2002.

Black bought The Daily Telegraph in 1985. Since then, the paper's distribution has decreased by about a quarter-million readers and now stands at about one million. The New York Sun, in which Black was one of the original main investors, isn't doing much better. It was founded in 2001 as an alternative to The New York Times, a paper that is much too liberal for Black's taste. The paper has a distribution of 26,000 (The New York Times has a distribution of 1.1 million), and it's unclear just how much money the paper is losing. A recent article in the British Independent said that the Sun was "hemorrhaging money." An investigative report in the October edition of Fortune Magazine found that The Jerusalem Post has lost millions of dollars in recent years.

It's all bullshit

Black and Amiel are not showing any signs of stress. The day after he resigned from Hollinger, Black gave a lecture about FDR in New York. On the day he resigned, Amiel published an article about the United Nations in The Daily Telegraph. She told friends who called a few days before Black resigned that they were going through some tough times, but did not elaborate.

Most of their friends are celebrities like them. Black has been described in the New York press as being driven by a compulsion to keep climbing the social ladder. He wants to meet anyone who is rich and beautiful, a friend of his told The Guardian. Since Tony Blair has been in office, a number of "ordinary people" have entered the House of Lords. For Black, it would be the first opportunity to meet and mix with simple folk, said one of his childhood friends.

Black and Amiel can often be found at prestigious dinners. They are regular guests in the home of Barbara Walters and were recently at an event at the home of Lally Weymouth, daughter of the late Washington Post publisher Katharine Graham and a reporter for Newsweek and The Washington Post. They also attended Prince William's lavish 18th birthday party at Windsor Castle three years ago.

Other close friends include Henry Kissinger and Margaret Thatcher. Thatcher's daughter worked at one of Black's newspapers. He first met Thatcher in 1986, shortly after he bought The Daily Telegraph. Black was very excited: Meeting with the prime minister was the fulfillment of a longtime dream. He gushed with compliments. "The revolution you have wrought in this country is more important by far than the episodes in British history that usually enjoy that description," he told her. They have been friends ever since. Black's friends in Israel include Benjamin Netanyahu and Moshe Arens, who says, "Black is a person with very solid hawkish views."

Black also feels tremendous admiration for a hero of the past - Napoleon Bonaparte. The New Yorker profile of Black ("Paper baron," December 17, 2001), mentioned that Amiel once told reporters that her husband ponders important decisions while sitting on the same chair upon which Napoleon sat when he signed international treaties. His affinity for all things Napoleon generated such derision in the British press that Black's assistant in London once said, "The proprietor of The Daily Telegraph would like to go on record to say that [Black] certainly does not own Napoleon's penis." Like Napoleon, says one of Black's friends at the National Post, Black also stretched his power to the limit.

The powerful desire to rub shoulders with the rich and famous does not stem from a deprived childhood. The New Yorker profile of Black described him as riding in limousines since childhood. He grew up in a wealthy family. At age eight, he used all his savings - 60 Canadian dollars - to buy shares in General Motors. He always had wads of dollars in his wallet, which he used to show to his friends in school. His father, George, was a wealthy brewery executive and a shareholder in the brewery's parent company, Argus Corporation. He was forced to step down at age 47 in the wake of a conflict with the CEO of Argus.

"The feeling at home was that his father was fired under unfair circumstances," says Newman, Black's first biographer. "And that's one of the things that motivated him over the years - the desire to avenge his father." Black's father and mother died in 1976, just 10 days apart. His father collapsed right in front of him. Before losing consciousness, he managed to impart these words of wisdom to his son: Life is hell, most people are sons of bitches and it's all bullshit. Black's father left him and his older brother Montagu - who was Conrad's sometime business partner and died a year ago - an $18-million fortune.

Life was not easy for Conrad when he was growing up, however. He lived in a big house in the Toronto suburbs, only saw his parents at meals on weekends, and was a lonely child who did not make friends easily. He recalled that most of his contact with kids his age occurred when he was trying to get revenge for things they'd done to him. At age 11, he was expelled from a prestigious private academy for stealing exams and selling them to other students. He told Newman that when he left the school, a group of kids who just the day before had begged him to help them - one of them literally on bended knee - waved their fists at him and berated him. "I've never forgotten how cowardly and greedy people can be," he said.

Black bounced around between a number of schools and then universities. Most of the time he was miserable. In his youth, he wrote in his autobiography, "A Life in Progress," he suffered from paralyzing anxiety attacks and night sweats, and was in psychotherapy for many years. In university, he studied law and history. Black is currently working on a new book about FDR.

Black first became interested in the field of media after reading a biography of William Randolph Hearst. He acquired his first newspaper - a small local paper with a distribution of just 800 - when he was still a student. Black paid $500 for it, merged it with another newspaper and then sold it when it started to be profitable. He also had other business interests then. He and his brother inherited their father's stock in Ravelston, Argus' parent company. When the CEO of Argus died, they persuaded his widow to help them obtain control of the company. She signed a document giving her consent for them to control Argus, but later told reporters that she regretted it and felt like an idiot for having done so. Argus controlled a chain of stores. Black took the employees' pension money and only returned some of it after a long legal battle. He sold most of the company's assets and used the money from these sales to buy newspapers in England, Canada, Australia and Israel. Ravelston is the private newspaper management company that he controls. In 1999, in lieu of taking salaries, Black and associates billed Hollinger $38 million in management fees, payable to Ravelston.

Journalism attracted him not only because of the chance to make money. In our culture, the owners of major newspapers are very influential. "The deferences and preferments that this culture bestows upon the owners of great newspapers are satisfying. I mean, I tend to think that they are slightly exaggerated at times, but as the beneficiary of that system, it would certainly by hypocrisy for me to complain about it," he once commented. In a 1990 interview with the Jerusalem Post, he said, "If I had invested a comparable sum [$20 million] in a cardboard box factory, I wouldn't be visiting the president and the prime minister and be getting quite so respectful a welcome."

He does not give the journalists who work for him the same respect. As far back as 1969, at a hearing before the Canadian Parliament, he said that most journalists are lazy ignoramuses and lack intellectual integrity. His opinion does not appear to have changed over the years. He once said: "My experience with journalists authorizes me to record that a very large number of them are ignorant, lazy, opinionated, intellectually dishonest and inadequately supervised." He does not believe that the press gives a balanced picture of things and once remarked, "To read the press of Canada today, it would be hard to avoid the conclusion that we are a society composed almost entirely of battered wives, molested children, humiliated ethnic groups, exploited workers and other groups despised for their sexual preferences or cultural attributes, all festering in a spoiling environment."

Publisher as opinion czar

At The Jerusalem Post, they say that Black's views certainly found their way into the paper. Black's business partner David Radler was responsible for the Post. Black visited Israel a few times, but even without his coming here, the Hollinger spirit was definitely felt at the paper.

Right after ownership of the Post was transferred to Hollinger in 1989, 30 reporters left the paper. Yehuda Levy, the owners' representative at the time, hastened to say that it was a lot more pleasant to put out the paper without them. The journalists aren't important here, says one woman reporter who recently left the paper. "There aren't a lot of reporters at the paper and not much need for reporting," she says. "The emphasis at the paper is on editorials and opinion. It's not a real newspaper, but an opinion paper. It's a lot cheaper to pay a few hundred shekels to an op-ed writer than it is to produce an article."

Advertising sales are more important than anything else, says a former editor of the paper, who adds that all the energy is put into the financial side of the paper and not the journalistic side.

Bret Stephens, who took over as editor in March 2002, says: "I brought in several reporters and also several op-ed writers. I give priority to commentary and analysis. Our job isn't to report on the municipal elections in Ashdod. Most of our readers are not in Israel and they're interested in security and in politics. They don't care about [MK] Naomi Blumenthal. We're a newspaper for the Diaspora. Our focuses are different. I don't need a reporter in Be'er Sheva."

Hollinger also bought The Jerusalem Post for ideological reasons. In 1987, Aryeh Mekel, Israel's current deputy ambassador to the UN, an adviser to then prime minister Yitzhak Shamir, met with Radler. "He told me they admire Shamir and want to help him," Mekel recalls. "I told him that I had an idea for them. 'The Jerusalem Post is very critical of Shamir,' I said. 'Why don't you buy the newspaper?' I thought it was very amusing. Two years later, they bought the newspaper."

Hollinger paid $20 million; the other bids were in the $8-million range. Rumor had it that they were purchasing the newspaper on behalf of the CIA. "The people who cook up these stories are in the wrong business," said Black. "They ought to be screenwriters."

Right after the newspaper was bought by Hollinger, it took a sharp rightward turn. It's a newspaper of the Jewish people and not of the other side, Levy explained then. "Our editorials definitely have a strong nationalist nature," he said.

"Let's not play games," Black told The Jerusalem Post in 1990. "It was universally perceived to be a very left-wing paper before. Well, the far left isn't the only game in town." The new game had rules of its own: Writers were forbidden to use the terms "Palestinians" and "West Bank"; a reporter who criticized Ehud Olmert when he was mayor of Jerusalem was fired; Benjamin Netanyahu's political adviser also worked as a political analyst at the paper; and David Bar-Ilan, who died earlier this month, was the paper's editor from 1992 until 1996, when Netanyahu's media adviser was appointed to the post.

Ari Rath, who was one of the newspaper's editors-in-chief at the time of the sale to Hollinger and left several months later, met Radler in 1992 at the wedding of Lord Weidenfeld. "I went over to him and told him that I didn't have any connection with the paper anymore, but I thought that it was unwise and not good that the newspaper was ignoring half the views in the political spectrum. He said he hadn't seen the paper enough and that he would speak with the editor."

The peak came on September 11 of this year [2003] when The Jerusalem Post published an editorial calling for Palestinian Authority Chairman Yasser Arafat to be killed. Entitled "Enough," it read: "The world will not help us; we must help ourselves. We must kill as many of the Hamas and Islamic Jihad leaders as possible, as quickly possible, while minimizing collateral damage, but not letting that damage stop us. And we must kill Yasser Arafat, because the world leaves us no alternative." The editorial sparked an uproar.

Amiel also put in her say. Four days later, she published a piece in The Daily Telegraph in which she wrote:

"I am increasingly of the terrifying view that this conflict in the Middle East is not amenable to a peaceful solution and can only be solved by the total victory of one side. This means the Arabs annihilating the Israelis or the Israelis being forced to use every means, not excluding nuclear power, to defend themselves. If you are a nation of under six million people surrounded by 70 million enemies who don't accept your existence, the only option is to fight to the death."

In early November, Black told the London Times: "What I don't like is moral equivalence between entities that don't want peace and demand the elimination of their opponent and Israel, which does want peace, even if up until comparatively recently, the basis and vision for peace wasn't a practical one. This attempt to represent my wife and myself as foaming-at-the-mouth Zionists is just an outrage. Believe me, any proprietor of The Jerusalem Post does not need very long to realize just how difficult the Israelis are."

"My views are close to that of Dan Meridor," says editor Stephens. "I'm not extremely right-wing. Radler gives me total freedom."

In any case, Black's newspapers have a right-wing bent. In 1998, he founded the National Post in Canada to present an alternative to Chretien's liberal leanings. Whyte, who was the newspaper's editor, said in a phone conversation from Montreal that Black chose him to be the editor because he knew what his views were. "As long as the editor respects his worldview, he leaves you alone."

The Daily Telegraph reflects the Conservative Party line. "One of the party's worries now is what will happen if the paper is sold to someone who isn't as conservative as Black," says a British Jewish businessman who is involved in the matter.

In order to be sure that his newspapers do not deviate from the official line, Black and his representatives keep an eye on the editors. "Their publisher in Israel immediately started to intervene in editorial board affairs," says Erwin Frenkel who, together with Rath, was The Jerusalem Post's editor at the time of the sale. "We were afraid of this and we brought it up at the very first meeting. They said that they don't interfere, but it was apparent immediately. They commented on editorials, and said they wanted different things."

One journalist at the Post says that the owners' representative recently compelled the editorial board to write a big story about a Jewish millionaire, whom Hollinger wished to please. "The publisher can do whatever he wants," Black explained in an interview with The Jerusalem Post.

'I have been a bitch all my life'

Barbara Amiel's future is still assured, in any case, says Prof. Eric Moonman, president of the British Zionist Federation, who knows the couple. In a phone conversation from London, he adds: "Even if her husband loses control of The Daily Telegraph, she'll find work at other newspapers. She is an important and very influential journalist."

Black and Amiel married in 1992 after his divorce from his first wife, Shirley Walters (who later changed her first name to Joanna). Walters and Black met when she was his secretary. In 1977, before she was officially divorced, she gave birth to their eldest son (they have another son and daughter). They kept the child a secret from their close friends until they married a year later. They divorced in 1992. Joanna then married a man who had left the Catholic priesthood, and moved to Canada.

When Black fell in love with Amiel, she suggested that he see a psychiatrist. After seeing her in an appearance on a television program, the psychiatrist said he could understand why Black was so taken with her. "She's amazing," the psychiatrist told him and sent him home. Amiel is not one to disagree. In her 1980 autobiography, "Confessions," she wrote: "I happen to be a woman, which is 'in' in itself, and also tall and considered shapely and attractive and that makes me very merchandisable."

Amiel is Black's senior by three years. She was born in London. Her father, an attorney, came from a long line of Sephardic rabbis, and committed suicide after divorcing her mother. When her mother remarried a non-Jewish man, Amiel cut off all ties with her. She left home at age 14, worked as a model and converted to Anglicanism, but returned to the Jewish fold several months later.

Her political views have also undergone a change. When she was at university in Toronto, she was a leftist and even took part in the International Communist Youth festival in Helsinki. Like Black, she also suffered from severe anxieties as a child. She had a fear of empty rooms. Left alone indoors, "I could find myself stranded, sitting in my own urine, sitting for hours too frightened to cry, and too frightened to move," she wrote in her book. As a student, she was addicted to codeine, which only exacerbated her anxieties. She thought she saw faces staring at her from the window and learned to stifle her screams of fear with a bag full of rags.

Black is her fourth husband. Her first husband was Gary Smith, an attorney from Toronto whose family ran casinos for the mafia. They were married for seven months. "He expected me to spend my days on shopping trips," she said after her divorce. Her second husband was a writer and producer of Hungarian background, George Jonas. They were married for six years, until 1979, and remained in close touch even after their divorce. Her third husband was David Graham, a Canadian millionaire involved in the media field. They were married only briefly. He was more in love with her than she was with him, his friends told The Toronto Star in 1996.

Life experience has taught Amiel not to be won over by flattery. She once said, "It would be practical to marry men who are making more money than we are, preferably at least twice as much. We want to know that when we stop working in order to have a family, our standard of income will remain the same. The man will be strong enough to provide for and protect us."

Amiel does not have children, nor does she need a man to support her. She was, among other things, editor of The Toronto Sun and a reporter for The London Times. After marrying Black, she moved to The Daily Telegraph. Her articles usually deal with international politics. She is very right-wing and a favorite of Jewish organizations in Britain. Amiel is one of the journalists who writes fairly about Israel, says Alan Aziz, executive director of the British Zionist Federation.

The last months haven't been easy for her, either. Times are tough, she remarked to Danny Gillerman, Israel's UN representative, just days before Black resigned from Hollinger. But she seems prepared.

In a November 1993 piece in The Sunday Times, she wrote: "My husband is very rich, but I am not. I don't regard my husband's money as my own. Having married very wealthy men before my current husband, I can guarantee that I parted from them leaving both their fortunes and my opinions intact. I have been a bitch all my life and did not need the authority of money to be one. My detractors were calling me a fascist bitch long before I had a penny. I am a North London Jew who has read a bit of history. That means I know this: In a century that has seen the collapse of the Austro-Hungarian, British and Soviet Empires, reversal of fortune is this rich bitch's reality. One might as well keep walking and have the family's Vuitton suitcases packed."

 

... on this wesbite about Conrad Black and his newspaper empire

 
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