It seems that rarely a week goes by without another revelation about the financial shenanigans of Conrad Black, the former Canadian press mogul whose dishonorable business career has captured the undivided attention of the Securities and Exchange Commission and the angry shareholders of Hollinger International, the publicly traded newspaper conglomerate that Lord Black ran until resigning as C.E.O. last summer. But whereas the initial picture was of a narcissistic windbag with few qualms about doing business in an unscrupulous manner, the public portrait of Lord Black is progressing from “sleazy” to potential crook.
As The Wall Street Journal documented on its front page last week, Lord Black’s stewardship of Hollinger was remarkable for the number of schemes he cooked up that enriched himself and colleagues at the expense of Hollinger shareholders. Many of these deals involved the array of small newspapers which Hollinger owned. As The Journal reports:
· In 1998, the debt-ridden Hollinger wanted to sell 18 community newspapers; a group led by Hollinger executives wanted to form a new company to buy them but didn’t have enough cash. Lord Black and his chief operating officer, David Radler, decided to take equity stakes in the new company, Horizon Publishing. Lord Black was thus on both sides of the deal. Hollinger further loaned Horizon $8 million to complete the transaction, thereby increasing Hollinger’s debt when it was telling shareholders that it was selling the papers to reduce its debt.
· In 2000, Hollinger sold three newspapers to Bradford Publishing Co. for $38 million. Lord Black and Mr. Radler apparently had their routine down by now: They bought equity in Bradford, and Hollinger gave Bradford a $6 million de facto loan.
· In 2001, Hollinger sold the Mammoth Times , a California paper it had bought in 1999 for $1.75 million, for $1 to Horizon, owned and controlled by Lord Black and Mr. Radler. Why did Hollinger’s board agree to sell the paper for $1? They were told that the paper was losing money and there were no other interested buyers. But the Mammoth Times had actually been profitable, and earned $119,700 in the month after the deal closed. Another buyer had been so interested in purchasing the paper that he’d signed a letter of intent to buy it for $1.25 million. But these details were kept from the Hollinger board, and Lord Black was able to effectively sell himself his own paper and collect the paper’s profits after the sale. The Journal notes that at least two other deals in which Hollinger sold papers to Horizon for $1 are under investigation.
Lord Black never seemed too concerned about the well-being of the company’s shareholders. After all, he spent $8 million of company money to acquire the Franklin Roosevelt papers-research materials for his unreadable, blustering, 1,280-page biography of Roosevelt-and he spread Hollinger cash around to pals like Henry Kissinger, William F. Buckley Jr., George Will and Richard Perle.
Indeed, it seems as if Lord Black woke up every morning thinking of some new way to rip off Hollinger shareholders. Not only did he and Mr. Radler personally collect $43 million over three years in “non-compete” payments when Hollinger sold assets, but The Journal reports that in at least one case involving a non-compete payment of $1.2 million, he was effectively agreeing not to compete with himself.
While it will take months for the S.E.C. and an internal Hollinger committee to dig to the depths of Lord Black’s activities, there’s actually not much to debate: If the allegations are correct, he basically stole $200 million from a public company. Does that make him a crook?
Some of Lord Black’s friends would probably say no. William F. Buckley, who collected about $200,000 from Hollinger for attending advisory-board meetings, wrote in a recent letter to The Observer that Mr. Black is “extraordinarily learned, profoundly instructed, modest in demeanor, eloquent in speech and in kindnesses.” And in a column he wrote for The National Review in 2002, Mr. Buckley wrote that Lord Black was among his “five closest friends in the world.” We’d like to know who his other four closest friends are, so we can keep our hands in our pockets when we meet them.
Charlie Rangel: Class and Integrity
Presidential pretender Al Sharpton, who is traveling around the country in style courtesy of his misguided financial supporters, is angry with Harlem Congressman Charles Rangel. The Congressman, you see, has refused to go along with Mr. Sharpton’s sham campaign; instead, he’s supporting Wesley Clark. Mr. Sharpton clearly believes that as an African-American, Mr. Rangel owes him his vote. That sort of racially charged knee-jerk thinking is about what one would expect from Mr. Sharpton.
As befitting a corrupt political boss, Mr. Sharpton has vowed to get even: The righteous reverend is telling people that he’ll support a primary challenge to Congressman Rangel from State Assemblyman Adam Clayton Powell IV.
Mr. Powell is the son of the late Congressman Adam Clayton Powell Jr., whose antics in Congress in the 1960′s foreshadowed Mr. Sharpton’s lavish vanity campaign this year. Mr. Rangel sent Powell into involuntary retirement in 1970. A decade ago, Mr. Powell IV tried to avenge his father by challenging Mr. Rangel, but the Congressman easily defeated him.
Now there are hints that Mr. Powell IV, an undistinguished former Council member, may want to have a go at Mr. Rangel again and is eager for Mr. Sharpton’s support. In fact, he is supporting Mr. Sharpton’s Presidential campaign. So here are a few questions for the would-be Congressman: Do you really believe that Al Sharpton is the best-qualified candidate for President of the United States? Have you asked your favorite son about his close association with anti-Semites like Louis Farrakhan and his ilk?
It’s pretty clear that Adam Clayton Powell IV and Al Sharpton deserve each other. The people of Harlem deserve better than these two self-appointed activists. What Mr. Sharpton has proven this year, however, is that activism certainly beats working for a living.
It’s frightening to consider that Al Sharpton has a measure of credibility in New York’s Democratic Party. Perhaps they should look to the class and integrity of Charlie Rangel.
Hope for the Homeless
Over 8,000 families are staying in New York’s long-term shelter system, a staggering figure which reflects poorly on the city and doesn’t bode well for the future of the thousands of children who are being raised with no idea of what it means to have a home. The Bloomberg administration’s new Housing Stability Initiative, which will spend $12 million to help alleviate the roots of homelessness, is a smart move in the right direction.
The city has chosen six neighborhoods where families living on the brink of homelessness tend to reside. Community groups will identify those families most in jeopardy, such as those living doubled-up with relatives, and offer them help in paying rent and avoiding eviction. Family counseling and other social services will also be offered.
Common sense indicates that the best way to deal with homeless families is to keep them from becoming homeless-even a few nights in a shelter can traumatize and stigmatize a family. Mayor Michael Bloomberg and his commissioner of homeless services, Linda Gibbs, deserve praise for thinking creatively to help solve a problem that affects all New Yorkers.