Prison has not eased Conrad Black’s contempt for the federal government’s prosecution of him, and the former media mogul will have 13 more months to seethe behind bars.
Black, the onetime jet-setting chief executive of a vast newspaper empire, appeared in a Chicago courtroom Friday to see if he would return to prison. He had exhausted his legal appeals, including a trip to the U.S. Supreme Court, in fighting his 2007 conviction for defrauding shareholders of Chicago-based Hollinger International Inc., former owner of the Chicago Sun-Times.
The appeals process, which resulted in his release from a Florida prison last year, left him guilty of fraud and obstruction of justice among the 15 charges brought against him. Standing before the judge, Black, 66, remained unapologetic, blaming corporate governance zealots and overreaching prosecutors for his and Hollinger’s downfall. He was defiant even as he sought mercy from the judge.
He hoped that the 29 months he had served of his original six-and-a-half-year prison sentence would be enough punishment, considering what little remained of the prosecutor’s case, his age and health ailments, including a cancerous lesion recently removed from his face.
"I am a seeker of justice," Black told U.S. District Judge Amy St. Eve, adding, "I do ask for the avoidance of injustice which lies entirely within your gift."
St. Eve, who presided over his 2007 trial, sent him back to prison for roughly a year to finish a reduced sentence of 42 months. St. Eve, a former prosecutor, said the new sentence will send a message to corporate America that executives should think twice before violating their duty to shareholders. Black’s lack of contrition also left an impression on the judge.
"I’m still scratching my head as to why you engaged in this conduct," St. Eve said. "I told you that the last time."
Black stood stoically as he received the news. But his wife, Barbara Amiel Black, 70, who was seated on a front-row pew, fainted when the judge announced the sentence. Security officers rushed to her as the judge continued talking to her husband. She later stood and walked out of court with the assistance of a medical crew.
It was a dramatic conclusion to a legal spectacle that started in 2003, when the Canadian-born Black was forced to resign as Hollinger International’s CEO amid allegations he and other executives had pocketed millions of dollars in unauthorized payments.
The scandal grew as an independent investigation by former Securities and Exchange Commission chairman Richard Breeden described Hollinger as a "corporate kleptocracy" with little oversight from a passive board that included former Illinois Gov. James Thompson. Civil suits piled up and stock in Hollinger, which in addition to the Sun-Times owned the London Telegraph and dozens of other newspapers, quickly tanked.
In September 2005, Black’s close associate, David Radler, former Sun-Times publisher, pleaded guilty to fraud and agreed to cooperate with the U.S. attorney’s office in Chicago.
A few months later, federal prosecutors filed charges against Black and three executives, alleging a wide-ranging scheme that cheated shareholders of tens of millions of dollars through bogus noncompete agreements and the misuse of corporate perks. The obstruction of justice charge against Black was later added, when he removed 13 boxes of documents from his Toronto office after he was warned not to do so.
Black fiercely contested the charges, calling the evidence "flimsy" and referring to the team of federal prosecutors as "Nazis." Prosecutors dismissed two of the charges before trial. A jury convicted Black of obstruction and three counts of fraud but found him not guilty on nine charges, deciding he was responsible for $6.1 million in losses and not the $32 million prosecutors alleged.
"This case was sold as another Enron or Tyco, and Black was cartooned as an outsized, greedy schemer," said Hugh Totten, a Chicago lawyer who observed the trial. "It frankly limped across the finish line and instead of a big corporate scalp on the wall, there’s a few hairs."
At his first sentencing in 2007, Black did not apologize and vowed to show his innocence.
He appealed the verdict to the Supreme Court, arguing that it was not certain whether the jury had found him guilty of the fraudulent misappropriation of money or failing to disclose the bogus fees to shareholders, which would be in violation of the honest-services section of federal fraud laws.
In a landmark decision last year, the court sharply limited the honest-services law and told the U.S. Court of Appeals for the 7th Circuit in Chicago to take another look at Black’s case. He was freed on bail in July pending appeal.
In October, the appellate court vacated two of his fraud convictions. It upheld Black’s convictions on obstruction and one fraud count in which he and other executives took $600,000. Federal prosecutors declined to retry Black, but they wanted the judge to reimpose his 78-month sentence.
St. Eve cut his sentence nearly in half, citing his exemplary conduct in prison tutoring other inmates.
At Friday’s hearing, Black criticized prosecutors for the "disintegration" of their case, calling it a "massive overreaching." He blamed Breeden for including a "great many fantastical allegations" in his report that he said ultimately tainted public opinion against him and resulted in the loss of massive shareholder value. He said he had nothing to do with the collapse of Hollinger.
He continued his rant by saying he regretted trusting Radler. "I have always tried to take success like a gentleman and disappointment like a man," he told St. Eve.
The closest he came to accepting responsibility for his actions was when he said, "I accept that a reasonable person could conclude that I am guilty." He quickly added that he also believed the same reasonable person could conclude he had been "adequately punished."
After sentencing, Assistant U.S. Attorney Julie Porter said: "The defendant has never accepted responsibility for his own conduct, his own actions and the consequences they had for this company, which were very extreme."
Black said he and his family have suffered deeply in the eight years since he left Hollinger. He closed his 20-minute speech by reciting most of the poem "If" by Rudyard Kipling, which opens: "If you can keep your head when all about you/Are losing theirs and blaming it on you."
Former Gov. Rod Blagojevich quoted from the same poem after he was named in a federal complaint.