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Conrad Black - Lord Nonesuch of Toronto Tarred, Feathered, Run Out of New York on a Rail
Lord I'm Better than You R. Conrad Black is a product and beneficiary of Toronto's Bay Street financial culture. Americans won't tolerate the shenigans on which Black was nurtured.

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RECENT DEVELOPMENTS
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Friday, October 22, 2004.. Conrad Black: There's a sucker born every minute - dissolute Duke's euphoria short-lived     Friday, October 15, 2004.. Is Lord Nonesuch a racketeer?     Friday, September 24, 2004.. Lord Black's Bora Bora vacation - the Eye Opener erred !!!     Monday, September 06, 2004.. Lord Black of Cross Harbour - From Plutocrat to Aristocrat to Kleptocrat     Thursday, February 05, 2004.. Foxes in Investor's Henhouse - Bay Street's Solution - A Bigger Hen House     Thursday, February 05, 2004.. White-hatted Posse hauls Virtual Aristocrat before Wet Noodle Ontario Securities Commission     Monday, February 09, 2004.. Lord StumbleBum Shunned     Thursday, January 29, 2004.. Welshing and Stumble Bumming     Thursday, January 15, 2004.. Selling The Crown Jewels     Monday, December 22, 2003.. Conrad Black Takes the 5th    

The Calgary Eye Opener
Friday, October 22, 2004

Conrad Black: There's a sucker born every minute - dissolute Duke's euphoria short-lived

We predicted last week that his Excellency Lord Conrad Black was blowing into the wind when he declared a great victory in the court battles launched upon him by the directors of his old company Hollinger International. Sure enough, after we "went to press" Hollinger told the media it would start a new lawsuit based on investigations it had carried out and summed up in its Special Committee Report. Hollinger says Black "breached" his duties to it and "unjustly enriched himself" at Hollinger's expense. And that wasn't all.

In Toronto, Canada's gun-shy courts (the ones who hockey veteran Carl Brewer had to drag, kicking and screaming, to throw Alan Eggleston in jail) finally went into action against Black's Canadian holding company and ordered a Court Inspector to fine-tooth-comb Black's main holding company.

His Lordship spent several years writing a book about U.S. President Franklin Delano Roosevelt - last winter he released all 1,280 pages of Franklin Delano Roosevelt: Champion of Freedom. To help research the book, Black paid US$7.2 million to a New York broker for Roosevelt papers once owned by Roosevelt's secretary Grace Tully. Guess who paid for the papers - Hollinger, of course. Last May, Hollinger seized most of the Tully papers at Black's New York apartment. Some of them are still missing. Hollinger has tried to sell them. The most Hollinger has been able to fetch for them is US$2.4 million. On Wednesday, Hollinger told the media that the U.S. government my claim ownership of the papers - that the seller may not have even owned the papers. Now Hollinger may get nothing for the papers. There's a sucker born every minute but Lord Black has a reputation as an astute businessman.


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The Calgary Eye Opener
Friday, October 15, 2004

Is Lord Nonesuch a racketeer?

Last Saturday Conrad Black ballyhooed a great victory in the United States District Court for the Northern District of Illinois. Last January Hollinger International, the American company Black looted, sued Black under the U.S. anti-racketeering Act. On Friday Judge Blanche Manning (Click here to read Judge Manning's judgment) dismissed the suit out of hand. "This is a very significant day," trumpeted Nathan Eimer, Black's Toronto lawyer. "[It proves there has] never been any racketeering here."

It depends what you mean by "racketeering". Black and his cronies had stripped exorbitant fees from investors; they had sold to themselves, for next to nothing, valuable assets that belonged to investors; Black had taken a US$500,000 pleasure trip to the South Pacific and stuck investors with the tab - to those investors, Black was a crook - a racketeer. But Judge Manning found that Black couldn't be sued under the U.S. Racketeer and Influenced and Corrupt Organizations Act (the "RICO Act"). The U.S. Congress designed RICO to deal with the likes of Al Capone. RICO triples the damages a crook has to pay in an ordinary lawsuit. U.S. promoters and stockbrokers lobbied Congress to exempt them from RICO if the promoters and stockbrokers could be sued for securities fraud in an ordinary non-RICO lawsuit. Judge Manning found that, because Black could be sued for securities fraud in an ordinary non-RICO lawsuit, he was exempted from RICO. The U.S. courts said the same thing when investors tried to sue Enron under RICO. Black has won no victory at all - the Court only confirmed that Black could be sued for securities fraud. Black and his lawyers were whistling in the wind, all sound and fury, signifying nothing.


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The Calgary Eye Opener
Friday, September 24, 2004

Lord Black's Bora Bora vacation - the Eye Opener erred !!!

On Saturday the Calgary Herald reported that Conrad Black, Lord Black of Cross Harbour etc., etc., had spent US$530,000 of investors' money on a 10-day vacation to the South Pacific island of Bora Bora. Our story of September 6, Lord Black of Cross Harbour - From Plutocrat to Aristocrat to Kleptocrat, reported that the pompous duke had spent only $250,000 on the July 2001 vacation. We therefore checked the Report of Investigation by the Special Committee of the Board of Directors of Hollinger International Inc., the impudent bunch of scallywags who had had the temerity to question his Lordships expenditures. We have discovered that Black spent $530,000 for airfare alone. Investors paid that. What about expenses on the ground? We do not know. We suspect that Black and his wife Barbara did not stay at a Super 8 Motel. We suspect that Black may not have been able to resist one or two gourmet meals in Bora Bora - it's a French colony. And we do not know whether or not Black paid for his room and board out of his own pocket. We suspect not.

In any event, My Lord, please accept our apologies for getting the story wrong.

And what are the poor folks doing?


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The Calgary Eye Opener
Monday, September 06, 2004

Lord Black of Cross Harbour - From Plutocrat to Aristocrat to Kleptocrat

Lord Nonesuch of Cross Harbour, aka Conrad Black, started his business career as run-of-the-mill Toronto plutocrat (for details of Black's career, click here) . Black amassed ill-gotten gains, used them to buy himself a fancy English title, "Lord Black of Cross Harbour" - that would make him an aristocrat. But 10 years ago, Black started raising money in New York using his old Toronto modus operendi. After 10 years American investors found him out and, on Tuesday, issued a report calling Black' a "kleptocrat". The Oxford English Dictionary defines a "kleptocracy" as "an order of thieves". Black should have stayed in Toronto. Toronto's Bay Street loves kleptocrats - the Ontario Securities Commission mollycoddles them - the Supreme Court of Canada makes everything legal.

This week a U.S. based committee of Black's former cash cow, Hollinger International, let loose a report on Lord Black's financial shenanigans and filed it with the U.S. Securities and Exchange Commission (the "SEC"). The committee (click here to read the report), under the direction of former SEC head Richard Breeden accused Black of fee-gouging US$400 million from his companies, spending 95.2% of Hollinger International's profits on himself and his partner, David Radler. Besides detailing Black's fee-gouging in the 500 page report, the committee got into the dirty details of Lord Black's kleptocratic lifestyle, including:

  • Black threw a $46,000 birthday party for wife Barbara Amiel. Investors paid for the party.
  • Investors paid US$2 million to buy an apartment for Black, another US$1million to maintain the apartment.
  • From 1997 to 2003, investors paid US$1.4 million to servants at Black's residences.
  • Investors paid US$2,463 for a handbag for Black's wife.
  • Investors paid US$2.3 million per year for Black's private jet.
  • In 2001, investors paid US$250,000 for a vacation Black and his wife took to Tahiti and Bora Bora
The SEC will likely lay civil charges against Black. The Hollinger International committee has launched a US$1.25 billion class action lawsuit against Black and his confederates. Other investors have asked a Canadian court to kick Black out of his Canadian company, Hollinger Inc. Some observers want Black thrown in jail, have called upon the tax man to step in and tax Black for the millions of dollars of personal benefits he has received from his companies.

Now that his investors are no longer paying the shot, the kleptocratic aristocrat has had to mortgage his Toronto house for $32,000,000. The house is only worth $20,000,000. There's something wrong there. The mortgage company is paying out more than the house is worth. Who's invested in the mortgage company? Who runs the mortgage company?

And what of Hollinger International's former board of directors? As Black looted away to his heart's content, his high falutin' directors, former U.S. Secretary of State/ National Security Council Chair Henry Kissinger, senior U.S. Department of Defense advisor Richard Perle, retired Canadian general and author Richard Rohmer, former Illinois governor Jim Thompson, partied it up with Black, turned a blind eye (Perle participated in the looting - Black paid him US$3 million in shady bonuses). Those directors have scurried off the sinking ship. But are they in trouble? In Canada, of course, the courts would let them off Scot-free. Not U.S. courts - many of the directors are scrambling to reach settlements with investors.


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The Calgary Eye Opener
Thursday, February 05, 2004

Foxes in Investor's Henhouse - Bay Street's Solution - A Bigger Hen House

Dalton McGuinty, Premier of Ontario, breezed into Calgary last week. Bay Street is losing customers. Conrad Black's shenanigans have spot-lighted the wet noodle treatment Bay Street crooks get from Toronto's Ontario Securities Commission and the Supreme Court of Canada (fining carpetbag Ottawa inside trader Michael Cowpland only $500,000, less than Cowpland's profits on his insider transaction - seven years of getting nowhere with fraudulent Bre-X Mineral's John Felderhof - dismissing, out of hand, complaints about Black's rapes and pillages - the notorious Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 decision which exempts corporate directors and accountants from liability). The foxes, investors justifiably suspect, reside in the hen house. McGuinty's and Bay Street's solution is not to clean up their acts. Their solution is to build a bigger hen house, a national security regulator located in Toronto to export Bay Street's Blackian culture to all of Canada. In the Eye Opener's view, not only any national regulator, but any national securities exchange should be located as far away from Toronto and its high binding culture as humanly possible. How about Winnipeg?
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The Calgary Eye Opener
Thursday, February 05, 2004

White-hatted Posse hauls Virtual Aristocrat before Wet Noodle Ontario Securities Commission

A week ago, a posse of white-hatted U.S. investors caught up with Lord (Nonesuch) Black. Broke and on the run, Conrad Black had tried to hand the assets of the Hollinger newspaper empire out the back door, at a bargain basement price, to two mysterious English twins. In return, the twins agreed to slip Black and his business buddies US$66 million under the table. U.S. straight-shooter Tweedy Brown quickly spotted the open door and called out a posse of irate investors. But the scam is being carried out through Black's Toronto company, Hollinger Inc. All the investors can do is try to shame some spine into Toronto's wet noodle Ontario Securities Commission. Canadian law is full of loopholes, is permissive and friendly to con artists. This week both top-notch Montreal investment manager Stephen Jarislowski and the former publisher of one of Black's B.C. newspapers reported they'd blown the whistle on Black to the Commission many months ago - the Commission ignored them both. But whatever credibility Toronto's Bay Street has is through the Securities Commission. To continue to permit Black to carry on his raping and pillaging might result in a flood of investors leaving Bay Street. The battle continues.
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The Calgary Eye Opener
Monday, February 09, 2004

Lord StumbleBum Shunned

Tuesday of last week, CanWest Global, Canada's biggest media conglomerate, removed his Lordship Conrad Black from their board of directors. The Canadian Imperial Bank of Commerce removed him last month.
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The Calgary Eye Opener
Thursday, January 29, 2004

Welshing and Stumble Bumming

In December, an investor audit committee caught his Lordship with his fingers in the cookie jar to the extent of US$7.2M. "I'll pay it back immediately," huffed the disconcerted Duke and, with a flourish, signed and delivered to the investors a promissory note for $7.2M payable on January 29. "Thank God that's paid," said He, with obvious relief. On January 16, Black met with the investors. Black claims to be a student of Napoleon. Only a stumblebum general would signal his moves in advance to his enemies. But that is exactly what Black did - he haughtily told the investors he would welsh on the note and that he was going to sue them. Napoleon could have told him what would happen next - the U.S. investors struck first - sued he and his buddy David Radler for US$200 million - forced Black into a retreat bordering on a rout.
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The Calgary Eye Opener
Thursday, January 15, 2004

Selling The Crown Jewels

Conrad Black has put his Florida mansion up for sale for US$46M.
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The Calgary Eye Opener
Monday, December 22, 2003

Conrad Black Takes the 5th

Hauled before the U.S. Securities and Exchange Commission, his Excellency pled the 5th amendment, refused to testify so as not to incriminate himself.
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ORIGINAL STORY

The Calgary Eye Opener
Monday, December 15, 2003
Conrad Black - Lord Nonesuch of Toronto Tarred, Feathered, Run Out of New York on a Rail
Conrad Black

Any other town would have dismissed him as a pompous snob, a jackass, a two-bit con man. Toronto feted him as the very impersonation of itself.

Conrad Black grew up a member of the Toronto family compact, a buddy of nonentities Fred Eaton (the fourth generation heir who went on to bankrupt Eaton’s stores) and Dougie Bassett (he once told the Pope he refused to believe Mary was a virgin). In Mark Twain’s Huckleberry Finn, Black fixated on the exploits of two lowlife con men, one who pretended to be the King of France (the “King”), the other who pretended to be the Duke of Bilgewater (the “Duke”). Only the most hopeless of rubes got sucked in. Twain meant to illustrate that European style monarchies, class systems, colonies and monarchial style governments were fraudulent and laughable. Said Huck Finn, “all kings is mostly rapscallions … when a duke is drunk, there ain’t no near-sighted man could tell him from a king.” But Conrad was fascinated by the Duke and, throughout his life, has imitated him.

Real kings and dukes lived and breathed in the old Toronto of Conrad’s youth, the hometown of Harold Ballard and most of North American’s crooked mining promoters. At his father’s knee, Black learned of the antics of his father’s piggy-eyed pals, E.P. (the King) Taylor and Bud (the Duke) McDougald. They sold non-voting shares to unsuspecting widows and orphans. They "tailgated" (bought company shares and flipped them at an inflated price to another company officially owned by the widows and orphans but controlled by the King and the Duke). They appointed imbecile friends to their companys' boards of directors. They mismanaged companies and charged obscene management fees. In the words of Duke McDougald, “the secret of financial success is to take a conflict of interest and exploit it”. Young Conrad learned that Toronto did not run King Taylor and Duke McDougald out of town - it feted them. King Taylor pranced around Toronto wearing mourning clothes and being presented to the Queen of England (and Canada). Duke McDougald acted as gatekeeper at Toronto’s snootiest club (no women or Jews allowed to join). Both aped their betters – they loved and tried to copy English aristocrats.

Conrad began imitating the Duke very early. While a pupil at Toronto’s snobbiest private school, Upper Canada College, he broke into the school office, copied exam papers and sold them to other pupils, was expelled. At Carlton University, Conrad soon repeated one of the Twain pair’s pranks, the staging of a phony play, “The Royal Nonesuch!!!” in which Black bilked the audience into paying for a performance which never took place.

Using the voting/non-voting share con, King Taylor and Duke MacDougald had created a house of cards under which, with very little investment, Taylor and MacDougald’s holding company, Ravelston Corp, controlled widow and orphan owned Massey Ferguson and Dominion Stores. But King Taylor and Duke McDougald both died in 1978. With poetic justice, Conrad and his playboy brother, Monte, secured control of Ravelston by sweet talking MacDougald’s widow out of McDougald’s shares. The Black brothers than raped, pillaged and destroyed Massey Ferguson and Dominion. Still using the voting/nonvoting share gambit, Conrad moved into the newspaper business and built up, mainly through a Toronto based public company, a huge house of cards publishing empire, Hollinger International. Conrad settled into the timeworn Toronto tricks he’d learned at his father’s knee:

  • He paid himself and his confederates 38 million U.S. dollars in management salaries - seven times the going rate…
  • He sold some of Hollinger’s newspaper businesses but channeled, by way of so called “non-compete” agreements, directly to himself, a good part of the price Hollinger should have received for the businesses…
  • He overstated Hollinger’s profits…
  • A snob, he loved to rub shoulders with the famous – to do so he forced Hollinger’s shareholders to pay Henry Kissinger, Margaret Thatcher, Richard Nixon Henry Kissinger, Margaret Thatcher huge fees to sit on Hollinger’s boards of directors…
  • He bullied Hollinger’s accountant auditors into approving Hollinger’s financial statements and he appointed, to company audit committees, simpleton Toronto buddies Douggie Bassett and Fred Eaton …
  • He forced Hollinger to pay $5 million for research materials for a U.S. President President Franklin Delano Roosevelt biography which Black wrote… his Lordship intended to keep any revenues from the book for himself
  • He bled off Hollinger assets into a company owned by Black and David Radler, his longtime partner...
  • Using one of Hollinger’s British newspapers, the Telegraph, he forced the British monarchy to appoint Black an English lord (prohibited under Canadian law – Black forsook his Canadian citizenship).

Old Toronto loved him throughout. Black created some headlines in the United States – the only gauge inferiority-complexed Toronto uses to judge merit. And he was a snob who aped his betters – the Canadian Government appointed Black colonel of the Governor General’s Foot Guards and to the Order of Canada. When the Queen received Black in a comic opera ceremony in Toronto, Black fitted himself out like the very model of a 19th Century British Major General, complete with satin, silk and sword - a scene out of a Banana Republic or a Marx Brothers comedy. The citizens of any mature town would have laughed Black (and the Queen) out of town.

All was going swimmingly. But Black had made one mistake. He took to financing his ventures through New York investors. He did not understand American business. Warren Buffet style American business is based upon trust, upon democracy and upon compensation the old-fashioned way – actually earning it. The Toronto financial community and Black believed in exactly the opposite –remove value wherever found for as little as possible – shareholders are suckers to be taken to the cleaners.

In the great democracy to the South, aggressive lawyers enforce the principles of American business through class action lawsuits which bankrupt crooked or incompetent directors and accountants. Ambitious regulators at the U.S. Securities and Exchange Commission (the “SEC”) put the rapscallions in jail. Black, on the other hand, was fatally accustomed to the Canadian legal model in which Canadian business bosses and their accountants are not accountable to anyone - effectively, the Supreme Court of Canada has prohibited class action lawsuits against directors and accountants in Canada (Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165). Canada’s government regulators are a joke (the Bre-X case has never resulted in any penalties – after 10 years Calgary’s Larry Ryckman is still at large).

Black mismanaged Hollinger into more and more desperate financial straits. This November, New York investors had had enough. Threats of class actions, forced Black’s handpicked directors to force Black to resign as Chairman and CEO of Hollinger. The SEC was at his throat. Lord Nonesuch had met his match. And Fred Eaton and Dougie Bassett and all Black’s Toronto friends deserted Black like rats leaving a sinking ship.

The Calgary Eye Opener


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