you testified about, except for CanWest, American Trucker, CNHI [Community Newspaper Holdings Inc.] I and II, Forum and Paxton, Horizon and APC. The letter states that it was your understanding and belief that International’s audit committee and board of directors approved each of these transactions that was the subject of the inquiry and the letter says that, doesn’t it?
A: Yes.
Q: With regard to non-competition payments, I refer you to the section about non-compete payments to the individuals. You address all $15.6 million?
A: Yes.
Q: And you state that you understood and believed that those payments were fair and reasonable, that full disclosure was made to the audit committee and the board of directors, and that the audit committee and the board of directors approved those payments?
A: That’s right.
For Greenspan, the case was very simple. Black never approached a single purchaser in the sale of the American community newspapers. He never negotiated a deal or had a single conversation with any of the buyers about the sale of the papers. David Radler was a liar and the members of the audit committee were all liars. A fraudulent scheme was singularly devised and put into operation by Radler. Radler performed the operatic parts of tenor, baritone, and soprano on his own and only used Mark Kipnis as his alto dupe.
By the time final argument arrived, a confused jury had three competing theories from the defence:
1 There was no crime committed by anyone and all of the $60-million proceeds of the non-competition agreements received by the senior executives and the parent company, Hollinger Inc., were legitimately obtained.
2 Conrad Black and the other senior executives were duped by David Radler, who kept them in the dark about an illicit scheme that he orchestrated to insert them into a variety of non-competition agreements.
3 What happened at Hollinger International wasn’t a theft by Conrad Black but rather a theft from Conrad Black. There was a crime but Black was the victim.
The problem with the first theory was the perplexing question of the reasons behind David Radler’s guilty plea. The jury was expressly instructed not to take the plea into account during their deliberations, but it must have confounded them. The jury was never informed that Radler faced up to twenty years under the sentencing guidelines if he risked going to trial and lost everything. The figure was calculated by a leading American sentencing expert, Jeffrey Steinbeck, retained by the defence. It takes a fluid legal mind and an abacus to decipher the sentencing guidelines, and Steinbeck was familiar with the various downward and upward adjustments. He prepared a memo that was available for the attorneys to use during Radler’s cross-examination. Radler eventually worked out a deal for twenty-nine months. Would the dramatic difference in punishment entice an innocent man to forego a trial? You bet it would. According to Murray Richman, a veteran defence attorney from the Bronx, “Even innocent people often aren’t willing to risk fifteen or twenty years or more in jail by going to trial. Not when they can get it down to one to four if they plead.”[9]
Only in America would someone seek immunity when there is no legitimate basis for being charged. In the event you might attribute this proposition to the wild imagination of a Canadian lawyer feasting on Havana cigars, let me point out that it actually happened in the Black trial. Paul Healy, Black’s former subordinate, received immunity from the prosecutors. Why? Ed Genson, who cross-examined Healy, couldn’t explain it but happily pounced on the unexpected gift to undermine Healy’s motives.
Angela Way, Mark Kipnis’s assistant and a peripheral witness at the trial, was scared to death of the prosecutors. She had been interviewed by them several times before she testified. She wouldn’t even look at her former boss on the witness stand during her examination.
The members of the audit committee were accused by the defence of remembering only what they chose to remember and disregarding the rest. Why would they do that? Ron Safer answered this puzzling question in his closing: “Because of embarrassment, because of liability. You know they were threatened by the SEC. They were investigated by the SEC. They got together and they put together a story. Ambassador Burt told you he was beginning to have a fear of being embarrassed as the controversy grew. Mrs. Kravis [another audit committee member] said the SEC enforcement proceedings were embarrassing.”
There was a broad consensus among observers of the trial that the worst witness was Black’s former executive assistant, Joan Maida. The decision to call Maida was foisted on the Black legal team by the client and his wife. By this point in the trial, Barbara Amiel was at the end of her rope with the poor collective judgment exercised by her husband’s lawyers. It didn’t matter that Genson’s law partner, Terry Gillespie, along with Jane Kelly,[10] had interviewed Maida in Toronto and warned of the danger to the case of calling her as a defence witness. Black absolutely insisted that she be called.
Conrad Black’s most critical lack of insight was demonstrated by his unrelenting strident public comments during the trial. At one point he approached me, stating, “I understand that you think that loose lips sink ships.” He didn’t need my answer to see the folly of his ways. He had repeatedly ignored the admonitions of several of his own lawyers to quell his outbursts.
The judge demonstrated incredible patience with Black’s conduct during the trial. She really wanted Black’s legal fate to be decided on the evidence and not on extraneous reasons. Her respect and compassion was most evident when the jury returned with its verdict. She understood instantly that the prosecution had succeeded with only morsels of its case. Eddie Greenspan, over time, shifted his harsh view of Judge Amy St. Eve. He ultimately believed that she was a fair judge and that any failings he had accused her of were really failings of the system that she was part of. “We’ve all thought she was a good person,” he concluded.
My Kind of Town
“You win the case in the opening, Eddie.”
Eddie Greenspan listened intently as Ed Genson implored him to open to the jury with some flourish, and he instantly made a decision about the case.
“Then you’re doing the opening statement,” he informed his Chicago-based co-counsel.
Greenspan’s experience with opening statements in Canada was dramatically different. Beyond saying hello to the jury and reminding them of the standard of proof in the case, there was little utility to an opening. Not a single thing that you say actually lingers in the jurors’ minds. I must admit that I generally shared Greenspan’s cynical view. The idea that a jury might recall what a lawyer had told them months ago seemed far-fetched.
Both Greenspan and I forgot one essential factor in the Black trial: the jurors were permitted to take copious notes. One of them knew shorthand, which likely meant that the jurors had the equivalent of a transcript of the opening statements of all of the attorneys.
The prosecution proceeded first, and the very first thing that Jeffrey Cramer told the jurors was this: “You’re sitting in a room with four men who stole $60 million. Four men that betrayed the trust of thousands of public shareholders. Four men who decided amongst themselves that their six- and seven-figure salaries were simply not enough.”
In plain speak, the prosecutor was describing the case as a grand-scale theft by a group of four rich and greedy men. Genson understood the prosecutor’s tactics. “He wanted to dumb down the case for the jury,” he told me.
Was Cramer’s tactic effective? Consider that he focused his sights on only three allegedly fraudulent transactions in his opening statement: Forum, Paxton, and
