Black Watch: Today's Top Stories
Posted on April 27, 2007 by Douglas Bell
The prosecution’s version of that other legendary Chicago combination, Tinker to Evers to Chance (Burt to Kravis to Thompson), continues with the arrival today of Marie-Josée Kravis, who shared audit committee duties with Burt and Thompson. It’s clear that the prosecution is presenting the board members as a sort of praetorian guard, ensuring David Radler’s safe passage through a ferocious cross-examination. The prosecution’s mantra, no doubt, will be: “Yes, he’s a snitch. Yes, he’s a weasel. But look whose evidence he’s corroborating.” So far, so good. The silvery-maned Burt effectively parried Ed Genson’s efforts at tarnishing his sterling reputation. The Post’s Peter Brieger, whose reporting of courtroom dialogue is far and away the best among the daily press corps (what’s left of them), wrote:
In a series of heated exchanges, Eddie Genson asked the witness about why he hadn’t noticed references to controversial non-compete payments in company documents, which Burt signed in the late ’90s…
“You didn’t read it?” the Chicago lawyer asked of the documents.
“As I said several times, I missed it,” Burt shot back. “It was incumbent on management to bring those [payments] to the audit committee—not put it in a footnote in financial statements 12 or 18 months later.”
“Is the fact that [Hollinger management] were told by lawyers that they didn’t have to, does that make a difference?” Genson continued, referring to mistaken disclosure advice the firm was given by its Toronto law firm, Torys LLP.
“I don’t know what they were told,” the witness said.
“You were being paid $5,000 a meeting and you didn’t read [the financial statements], did you sir?” Genson asked.
Assistant U.S. Attorney Jeffery Cramer leapt to his feet in objection.
My guess is that the key passage for the jury is: “It was incumbent on management to bring those [payments] to the audit committee—not put it in a footnote in financial statements 12 or 18 months later.” Radler no doubt will confirm that the dissembling was all part of a conspiracy to take money meant for the shareholders and slide it into the pockets of Black et al. Whether or not the jury believes him will, I suspect, have more to do with the perceived credibility of the audit committee than with Radler himself.
N.B. On-line magazine Slate yesterday published a summary piece by its legal reporter Scott Jacobs, which, besides that written by The Guardian’s Andrew Clark, is the toughest piece of sensible analysis on Black to date.
Black's Former Board Begins To Turn on Him [Slate]
Hollinger director 'missed' payment info, court hears [National Post]
Black's lawyer fails to score [Toronto Star]
Ex-board member admits missing error [Chicago Sun-Times]
Defense fires back at witness [Chicago Tribune]
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Nala April 28, 2007 at 10:20 a.m.
Does anyone else find it "interesting" that both Mr. Burt and Mrs. Kravis "missed" the exact same paragraphs in the documents that they, in fact, signed..... and that these particular paragraphs were also listed in the Table of Contents???
Ali Mohan alimohan@canada.com April 30, 2007 at 10:48 a.m.
Individuals tend to act in predicible patterns. "If it worked in the past, I can get away with it again."
Clearly, his Lordship lulled Burt, Thompson and Kravis into complacemcy through a sense of collegial bonhomie. "After all, we share neo-con views and are the bulwark against the unwashed. Luncheon is being served, so we may discuss more interesting topics than mire accounts."
I note that the same strategy was used on the widows McDougald and Phillips in 1978. The widows signed over control of Argus without reading the fine print and to their great regret. They too trusted Conrad when he suggested there was no need to bother their pretty little heads with details. So, in both cases, the dynamic was established: To question Conrad is to question your class and betray all we value and fight for. All very clever.
"Of course we trust Conrad, he is one ours!"
Ali Mohan alimohan@canada.com April 30, 2007 at noon
Dear Mr. Bell,
As we examining matters from the Burt, Thompson & Kravis perspective, I certainly would find it very helpful to know how committed our fine trio were personally. That is, how much did each invest in Hollinger International and at what price levels? when? and were these public market purchases or stock options?
While this information is a matter of public record, I do not have the time to chase it. You would be performing a great service letting us know how much skin this illustrious trio had in the game. Did they invest signifantly or was this a luncheon debating club?
As always, respectfully submitted, your most obidient servant, etc
Paul April 30, 2007 at 3:17 p.m.
As it happened, the widows MacDougall and Philips were walked through the agreements clause by clause by Bud's own lawyer Lou Guolla and a number of Bud's other hand picked associates. As for the members of Hollinger's Audit Committee, they have to sing off the same song sheet because they have a lot to lose. It seems obvious to me that they have been threatened by Fitzgerald and/or the SEC, turning them into weasels, much like Radler. I highly doubt that even Conrad Black could have duped these guys, but the Feds could certainly scare them.
Ron Campbell May 4, 2007 at 10:29 p.m.
Paul, The Establishment Man, pg.130
The widows did precisely what almost anybody else would have done in the circumstances: they signed where the lawyer pointed... "Like absolute idiots... we signed and signed and signed, without reading at all. The definite impression I had was that Lou (Guolla) was going to fix something to do with Argus that Bud had arranged to have done before he died"...-Mrs. McDougald commenting on the meeting with Guolla and Bill Ritchie.
Hardly sounds like a clause by clause review.
But it does foreshadow the behaviour and performance of the audit committee and board at Hollinger International.