[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 13 March 2007, 23:55 GMT
Why Conrad Black is in the dock
By Guto Hari
BBC North America business correspondent

Lord Conrad Black and reporters
Did Lord Black plunder or boost Hollinger International?

Lord Black goes on trial on charges of fraud and racketeering, but is this a story of corporate excess or overzealous governance?

They make you feel very special at La Grenouille.

One person takes your coat. Another guides you to the bar.

The Maitre D' introduces you to your table. Then your "captain" offers you bread which someone else delivers.

By the time I'd paid the bill, I'd been fussed over by a dozen different people.

The bill, of course, reflected that. The set lunch for two, with sparkling water and a glass of wine each cost more than $200.

A bottle of their best Pommerol would have added another $3,000 to the bill.

The lifestyle of Conrad Moffat Black

La Grenouille opened during a snowstorm 45 years ago, and there was snow on the ground when I treated myself to lunch there.

US federal prosecutors Edward Siskel, Julie Ruder, Jeffrey Cramer and Eric Sussman
The US prosecutors want to see Lord Black behind bars

But I wasn't there for any anniversary. I simply wanted a glance at the life previously led by Conrad Moffat Black.

Regulars at La Grenouille refer to it as the Frog Pond, playing on its French name and playing down its exclusive and expensive character.

"The epitome of everlasting elegance" is how one critic describes it. "Top of the line" was the rather obvious observation of another.

And it was here that Conrad Black spent more than $60,000 on a birthday bash for his wife.

80 guests enjoyed Beluga Caviar, lobster and other delicacies in a two-tiered atelier which was once the home of the artist Bernard Lamotte.

None of the staff will talk about it now, but the details are outlined in a 500 page report sent to US regulators by Hollinger International - the media group run by Conrad Black until he stepped down in November 2003.

A century of jail time?

The report also catalogues $2,463 spent on handbags for his wife, $2,083 on exercise equipment, $2,785 on Opera tickets and $24,950 spent on summer drinks.

The insiders at Hollinger whose job it was to safeguard the shareholders made it their job to steal and conceal
Patrick Fitzgerald, US federal attorney

Those sums are dwarfed by the $3m allegedly spent annually on leasing a private jet and the $90,000 cost of refurbishing a Rolls Royce.

Lord Black spent $20,000 of his own money on the bash at La Grenouille, but the rest, according to the report, was picked up by Hollinger International.

These are the colourful details behind eight counts of fraud brought against the former press baron in November 2005. Four more charges, of racketeering, money laundering and obstruction of justice were added later.

If he's found guilty at the end of the trial which starts on Wednesday, this colourful controversial character could be sentenced to a century in jail.

John Boultbee, Peter Atlinson and Mark Kipnis, all former executives of Hollinger, stand accused with him of defrauding the company of $84m.

Innocent 'without qualification'

Conrad Black asserts his innocence "without qualification", but his lawyers have a tough task defending him.

Conrad Black in 1992
Conrad Black helped to stem the decline of the Daily Telegraph

Last September, they tried to remove references to the party from the indictment, along with other details of his lavish lifestyle.

They were concerned that jurors might be prejudiced against him, because "a typical juror does not reside in more than one residence, employ servants or a chauffeur - or host expensive parties".

They also sought to remove references to his membership in the House of Lords for the same reason.

Yet six years ago, Conrad Moffat Black was so eager to become Lord Black of Crossharbour that he renounced his Canadian citizenship to do so.

He took the name from the London subway stop near the headquarters of the Daily Telegraph - once among the flagships of a newspaper empire that was the third largest in the world.

Jealousy and resentment

Many journalists, who worked for him at the time, are now taking great delight in his current predicament.

Lord Black signing a book
Lord Black allegedly used company money to fund research for his Roosevelt biography

He was a tough boss and he spent a lot of money ostentatiously, prompting jealousy and resentment.

To a large extent, it was ever thus.

Conrad Black was born into a wealthy family in Toronto. His father was President of an international brewing conglomerate, and a privileged education gave the young Black a good start in life.

He was clever, with a passion and curiosity about life which led him to study history and law before he began buying newspapers in his mid-twenties.

At its height, Hollinger International owned 400 titles in North America, distinguished papers around the world, and had revenues of more than $2bn.

The company acquired the Daily Telegraph in 1985, and with the well known columnist, Barbara Amiel, by his side, Conrad Black had a ticket to the inner circles of the British establishment.

Cleared by the board

It's the dismantling of that powerful portfolio which led to litigation and the threat of prison.

THE CHARGES
Criminal charges
15 charges of fraud
one of obstruction of justice
one of racketeering

Federal prosecutors allege Lord Black
Fraudulently received non-compete fees from the sale of Hollinger International assets
Deprived the company of his honest services
Repeatedly benefited himself at the expense of the company and its public shareholders through the abuse of company perks

Other executives on trial
John Boultbee - former chief financial officer
Peter Atkinson - former general counsel
Mark Kipnis - former corporate counsel and secretary

Between 1998 and 2002, he and his co-defendants are accused of perpetuating three fraudulent schemes, which allowed them to siphon off funds for themselves as they sold off the Group's newspapers.

One deal, involving Canada's biggest media empire in 2000, was worth $2.3bn.

CanWest wanted a non-compete clause to prevent Hollinger International from re-entering the market and setting up newspapers to compete against the ones they had just sold.

That clause enabled Conrad Black and his colleagues to net $53m. Not a cent of those fees went to Hollinger International.

Lord Black insists everything was cleared by the board.

On bail

US Federal Attorney, Patrick Fitzgerald, claims that Directors were lied to: "The indictment charges that the insiders at Hollinger whose job it was to safeguard the shareholders made it their job to steal and conceal".

He's been helped by David Radler, the former president and chief operating officer of Hollinger International who did plead guilty to a single charge of mail fraud for his part in a scheme to divert more than $32m from Hollinger International. The plea-deal gave him a reduced 29-month jail term in exchange for agreeing to testify on behalf of the US government.

Lord Black of Crossharbour is currently living on a $20,000 monthly allowance imposed by a judge. He paid a $21m bond to be out on bail.

If he loses this case he loses everything - his liberty, livelihood and reputation - even though nobody will take away his title as a Lord.

If he wins La Grenouille can start preparing for another huge celebration.




VIDEO AND AUDIO NEWS
Lord Black's extravagant lifestyle



RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific