AUDASE

The Sunday Times
October 22, 2006
Conrad the Barbarian
Tom Bower reveals the childhood traumas behind the excesses of Conrad Black, the former press baron facing a multi-million fraud trial and prison
Domestic life was remarkably agreeable for the newly married Conrad Black and Barbara Amiel in 1990s London. Both tended to work late into the night and rise at noon. Drinking ginger tea and eating chocolate biscuits made by his chef, the proprietor of The Daily Telegraph spent hours on the telephone while Amiel struggled with her newspaper column, sometimes taking three days to complete 1,300 words in her office on the top floor of their mansion in Cottesmore Gardens, Kensington.
The huge house bought in 1992 brazenly suggested the wealth and influence of a billionaire. Their audience — London’s rich and powerful — took the impersonation seriously. But those who observed them closely were less impressed.
Simon Heffer, a columnist on Black’s Telegraph, observed: “Barbara has turned Conrad from an homme sérieux into a society petal. He’s besotted with her, like a spaniel.”
Hal Jackman, a rich investor and disillusioned old friend, labelled Black “a parvenu drifting away from reality. I can’t understand his priorities. He does too much entertaining and not enough business”.
Black was unrepentant. He had other homes — and other friends — in New York, Toronto and Palm Beach.
The facade lasted for a decade. In 2001, about to be ennobled, Black showed a real billionaire, the Canadian gold magnate Peter Munk, his beautifully refurbished Rolls-Royce Silver Wraith. It had purple leather “like the Queen’s”.
“How can you afford it?” asked Munk. Black smiled.
In reality, the wheels were coming off for the new Lord and Lady Black; and friends were deserting them. Last year, accused of defrauding his companies of hundreds of millions of dollars to support his extravagant lifestyle, and facing a fight to stay out of jail, Black needed money. He called several friends in New York.
“Do you think you can get a group of people together if the need arises,” he asked one billionaire, “and get me some funds secured against my property?” “How much do you want from everyone, Conrad?” asked the businessman.
“About $1m each,” said Black.
There was a pause. “You’re my best friend,” continued Black. “Surely you can lend me $1m?”
“Well, Conrad,” said the man, “what’s my private telephone number?”
“I don’t know,” replied Black. “Why?”
“Well, if I were your best friend, you’d have it.”
The first to refuse any contribution outright was Alfred Taubman, who had himself done jail-time for price-fixing while chairman of Sotheby’s. The rest followed suit. They were disdainful of a man famous for his excesses and the collapse of his empire rather than for his achievements.
Black remained unrepentant. At 1.15am on April 1 this year he sent me an e-mail. I had known him since the mid-1980s, and now I was writing a book about him. Well over 200 people had agreed to be interviewed for it. Their generosity is a principal source of my information.
“Dear Tom,” Black wrote. “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.
“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.”
Convinced of his acquittal, Black pledged himself in the second e-mail of the night to 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. And in yet another e-mail the same night, he keenly anticipated the stardom that he would achieve at his trial, due to start in Chicago in March 2007. It would be “spectacular”.
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 who stands accused as a kleptocrat. The riddle is just how he has found himself in this position.
Privilege and prejudice were Conrad Black’s roots from his birth on August 25, 1944. By the age of five, he was cosseted by cooks, butlers, nannies and chauffeurs. In the winter holidays he escaped Toronto’s freeze in the Bahamas where he gazed with his father, George Black, at the Mellons, du Ponts and other American magnates.
Although George Black did not rank among the super-rich, he was a successful businessman with an astute intellect. He noted his son’s exceptional memory and became preoccupied with creating an extraordinary individual out of him.
Obsessively he ordered Conrad to recall facts, both relevant and irrelevant. After intensive games of chess, his son was encouraged to read encyclopedias and recall what he read. His bedrooms were filled with books about the military, wars and politics. In the midst of the Korean war the boy sat transfixed listening to radio news broadcasts, and watched television reports of the McCarthy hearings in Washington targeted at unearthing communist sympathisers.
During all-night sessions, which started in Conrad’s childhood, George Black regaled his son with stories of his business struggles as president of Canadian Breweries. He had savagely cut costs, dismissed staff and created phenomenal growth. Sales and profits had tripled, and it had become the world’s biggest brewery, embracing Canada, the USA and Britain.
There was a downside to this story, however. Insomniac and increasingly intoxicated, George Black would arrive in his office at midday, boasting that because he delegated authority his presence was not required. In reality, “delegation” had become his excuse to recover from hangovers and the morning’s vodka.
When in 1958 George Black challenged the trade unions to remove their restrictive practices, they responded with an acrimonious strike that hit profits, and he was fired by the owners of the company.
Henceforth at their all-night sessions, he imbued his son with a mission to exact revenge. There would be many bitter lectures over the years on history, power and finance which inculcated in Conrad the importance of supremacy and manipulation.
Stifled by depression, George Black failed to appreciate the burden he was inflicting upon his son. He offered no physical affection, and his wife was similarly cold and remote. In that loveless atmosphere, Conrad compensated for his emotional insecurity by revelling in the lives of historic heroes. Entitlement bred defiance and insolence, fashioning a personality that enjoyed a fight and savoured inflicting defeat.
At the time that his father was fired, the unsporting, overweight boy was 14 and a pupil at Toronto’s Upper Canada College, one of the country’s elite private schools, taken there every day in a chauffeur-driven Cadillac. Months later, he was expelled for stealing exam papers and selling them. His father excused him as a “compulsive insubordinate” eager to prove his credentials as a capitalist.
Black passed through two more schools — leaving each because of misbehaviour — before being coached in a crammer to scrape a pass in his final school exams in 1962. His mediocrity reflected his laziness. He graduated from university with a poor degree three years later and failed his law exams.
His schoolboy notions of genius had been shattered. Now he had other things on his mind.
One of the men his father railed against in their nightly sessions was John “Bud” McDougald, president of the Argus corporation, the conglomerate that owned Canadian Breweries.
McDougald, championed as Canada’s supreme business leader, was in reality a financial cowboy who enjoyed a reckless lifestyle, avoiding taxes and cheating the minority shareholders. He used intimidation and flattery to disguise rampant dishonesty. Argus, a company floated on the Canadian stock exchange, was his private piggy bank.
Argus was controlled by the six principal shareholders of a private company called Ravelston, named after a Scottish estate owned by McDougald’s ancestors. While McDougald owned 23.6% of Ravelston’s shares, George Black still owned 22.4%. As a result, McDougald understood the benefits of flattering George Black’s son.
On Conrad’s 21st birthday, McDougald gave him membership of the Toronto Club, where the city’s elite fixed commercial life as they ate, drank and played.
His loyalties split, the young man practically worshipped McDougald’s mystique and power. Steeped in the minutiae of Argus’s personality conflicts and financial dubieties, he emerged with a sophisticated understanding of the inherent deception of the way in which the company was run.
Patience, planning and perfidy would be required to destroy his father’s tormentors. Meanwhile, he began in a small way as an independent businessman, buying up small weekly newspapers.
A friend introduced David Radler, a 26-year-old business-school graduate. Radler was a rough, ambitious fortune-hunter. His ratty, sharp manner and his spartan lifestyle emphasised his preoccupation with money. They complemented each other’s ambitions. Black wanted influence and wealth, while Radler enjoyed mastering the mechanics of creating that wealth. Black brought the vision of a strategy, while Radler was keen to sweat their assets. At one of their first newspapers, written complaints from staff resulted in two-cent fines for wasting paper.
The partners rarely met. “I know exactly what he’s going to do without going near what he’s doing,” said Radler. Their shared ambition for money — and Black’s for fame — cemented their relationship.
The handicap to Black’s quest for affluence was his psychological turmoil. In March 1970, he awoke to a massive anxiety attack. Sweating profusely, hyperventilating and racked by apprehension about his fate, he was on the verge, some believed, of committing suicide. The accumulation of his loveless childhood, his academic failure and his social insecurity had become an intolerable burden.
He sought help in psychoanalysis. One diagnosis suggested a narcissistic personality disorder — defined as an exaggerated sense of one’s own importance and uniqueness. Others diagnosed Black’s problems as arising from his loveless, dysfunctional home. Intense psychiatry cured him of his immediate self-destructive urge, but several personality traits remained, including a sense of his entitlement and a lack of conscience.
Later, inspired by influential figures in the Catholic Church, Black began a conversation with God. His Maker’s approval was crucial if Black was to face down those who vilified him. And God always gave His approval.
His psychological journey was interrupted by his parents’ deaths. His mother succumbed to liver cancer on June 19, 1976. Ten days later, flopped in his armchair, regularly refilling his glass with neat vodka, George Black sermonised 31-year-old Conrad on wealth and power late into the night.
In the early hours, he slowly climbed the stairs to bed. As he reached the top, Conrad Black heard cracking wood and saw his father fall over the banister onto the ground floor. Carried by Conrad into the library, George Black said that he no longer had the will to live. “Life is hell,” he told his son as they awaited the doctor. “Most people are bastards, and everything is bullshit.”
The doctor said he was unlikely to survive. Despite the prognosis, Conrad returned to his own home and watched a Charlie Chan film. He was interrupted by a telephone call. George Black was dead. Many, occasionally including his son, believed he had committed suicide.
Conrad Black was now an orphan with a purpose: to seize Ravelston, the key to the Argus corporation’s assets. McDougald and the other big shareholders, he noted, had no children. Their wives were uninterested in business. When McDougald died two years later, Black moved carefully.
McDougald’s widow, Maude, and her sister Doris, widow of another major Ravelston shareholder, lived together in Palm Beach, the Florida haven of the super-rich. Neither woman was blessed with intelligence or an understanding of business. McDougald had never bothered to explain to his wife how to cope after his death.
Black arrived to offer his assistance to the sisters, who now owned nearly half of Ravelston. The other major shareholders, he claimed, were crudely manoeuvring against the widows. “We must do something about this.”
He persuaded them to sign a contract empowering his use of their shares in any vote against the other factions. To their consternation, he then used their proxy votes to seize control of the company. Bay Street, Toronto’s financial heart, had never witnessed such a coup.
There was one more hurdle. To achieve complete ownership he needed to buy out the shocked widows’ shares. After a battle involving intimidation, stormy meetings and vicious threats, the deal was settled. For a total of $30m, he now owned a corporation controlling assets worth $4 billion.
“If my father knew what I’ve done,” he confided with pleasure, “he’d roll in his grave.”
Some “old money” families recalled his theft of examination papers. Others dubbed him “Conrad the Barbarian”. Such judgments were buried when The Globe and Mail, Toronto’s leading newspaper, made him Businessman of the Year.
It is no small irony that within a few years The Globe and Mail’s journalists were, Black believed, unfairly scrutinising his business. He complained that the newspaper was planning an article describing him as “a rapacious, right-wing Bay Street baron” who “milked” his businesses, “destroyed public companies” and oppressed minority shareholders “in a series of complex corporate shuffles designed primarily to fill his own coffers”.
In 1982, the American authorities accused him of fraudulent practices. To avoid prosecution he signed a “consent decree” promising to abide by US law. He also narrowly escaped prosecution in Canada for conspiring to defraud Argus’s shareholders.
Three years later, when he restructured his business in a succession of complicated transactions, Black appeared to his critics to have legitimately profited from asset stripping and insider dealing. Many millions of dollars were transferred from his public companies into Ravelston.
This spurred The Globe to publish its investigation. With delight, Black announced that he would sue the newspaper to “painfully punish” his critics by forcing them to prove that his dealings were dishonest. That hurdle, as The Globe’s lawyers soon discovered, would be more than difficult to surmount.
That year, 1985, was significant in other ways too. In January, he attended a party in Toronto to celebrate the third wedding of a prominent Canadian political pundit, the beautiful Barbara Amiel. Secondly, he attended the annual Bilderberg conference, a gathering of the world’s rich, famous and influential personalities.
Black and Radler were on their way to ownership of 80 newspapers across North America, and fantasised about creating an empire. To Black, buying papers meant becoming a broker of influence. He particularly enjoyed the entrée they gave him to the Bilderberg.
That year among his fellow guests was Andrew Knight, the editor of The Economist. Knight was more than a genial, successful editor. As a global networker, he was entrusted with secrets.
“Let’s have another fiery armagnac,” Black suggested to him. Over several drinks after midnight, Black confided his frustration at having failed to buy a major Canadian newspaper. Naturally, he omitted mentioning the distrust of himself in his own country.
“Canada’s a backwater,” he complained.
“If you’re looking for a big newspaper, Conrad,” replied Knight, in what would undoubtedly be the most decisive sentence ever uttered in Black’s career, “The Daily Telegraph might be a possible target.”
Too much armagnac had flowed for Knight to notice Black’s initial reaction.
© Tom Bower 2006
Extracted from Conrad and Lady Black by Tom Bower, to be published by HarperCollins on November 6 at £20. Copies can be purchased at Amazon.com