The final product is often complicated to read, unentertaining and inconclusive. No major City slicker has ever been brought down merely by newspaper articles. Like the Fraud Squad, financial journalists usually need a crash before they can detect and report upon the real defects. Often, only with hindsight does the crime seem obvious. Even though in Maxwell’s case his propensity to commit a fraud had been obvious since 1954, it was almost impossible for any journalist to produce the evidence contemporaneously.
Moreover, many of those who reported Maxwell’s affairs during the 1980s were only vaguely aware of the details of the Pergamon saga in 1969, when his publishing empire had disintegrated amid suspicions of dishonesty which appeared to have terminated his business life. After three damning DTI reports, no one expected Maxwell’s resurrection. However, the DTI inspectors, having found the evidence of fraud and voiced a memorable phrase about his unfitness to manage a public company, had not directly accused him of criminality. It was the inspectors’ cowardly reluctance to publish their real convictions and the police failure to prosecute which permitted Maxwell during the 1980s, when explaining his life, to distort the record of the Pergamon saga.
Accordingly, by 1987, Buckingham Palace, the City, Westminster and Whitehall had forgotten or forgiven the past. In the year in which Maxwell’s final frauds began, most journalists reflected the prevailing sentiment and were willing to afford him the benefit of the doubt.
To have broken through Maxwell’s barrier required not only a brave inside source who was willing to steal documents but also someone who would risk the Chairman’s inevitable writ. But, unlike in America, whistleblowers are castigated in Britain, where secrecy is a virtue. To break those barriers also required expertise and a lot of money, increasingly unavailable to newspapers and to television. So almost until his end Maxwell enjoyed a relatively favourable press, although journalists were not to blame for the canker’s survival.
The real fault for Maxwell’s undiscovered fraud belongs to the policemen employed in the Serious Fraud Office, to the civil servants, especially in IMRO and the DTI, who are empowered to supervise Britain’s trusts and corporations, and to the accountants at Coopers and Lybrand who were his companies’ auditors. As with most of Britain’s financial scandals, those arrogant, idle and ignorant bureaucrats, having failed in their duties, were not embarrassed nor dismissed, because they were protected by self-imposed anonymity. It was their good fortune that many blamed Britain’s libel laws for the failure to expose Maxwell’s fraud. But that was and remains too easy. Maxwell prospered because hundreds of otherwise intelligent people wilfully suspended any moral judgment and succumbed to their avarice and self-interest. To suggest that much will be learned from Maxwell’s story is to ignore past experience, but his story is an extraordinary fable, not least because only now can one read the final verdict.
Robert Maxwell had hit rock bottom when I first met him in spring 1973. Damned by government inspectors as a liar and fraudster, he had lost his seat as a Labour MP, had been ejected from Pergamon Press, his lucrative scientific publishing business, and had been cast into the wilderness as a pariah by the City and Wall Street. Few public figures had been so humiliatingly mocked as Captain Bob, otherwise known as the Bouncing Czech. ‘I wonder if I can help you?’ I said to Maxwell as we sat in his makeshift office in Headington Hill Hall, his vast Oxford home acquired for a peppercorn rent from the local council. ‘What do you have in mind?’ growled the man famed for his girth, intimidation and brazenness.
As a twenty-seven-year-old BBC TV producer, I had been tasked to film a fifty-minute documentary about the rise and fall of Britain’s most infamous tycoon, politician and multi-millionaire. ‘Well,’ I replied to the wartime refugee who had been awarded the Military Cross by Field Marshal Montgomery for charging a machine-gun post in Germany in 1945. ‘I wanted to make a film about your remarkable life and achievements. It might help your resurrection.’ As the fifty-year-old pondered the offer, I threw in that my father was also a Czech refugee. That connection sealed our fate. ‘Done,’ he said, and committed himself for the next six weeks to share his life with me and Max Hastings, the reporter.
As we trawled through Maxwell’s astonishing life – the peasant boy who escaped the Holocaust, established his fortune as a black-marketeer and thief while serving as a British army officer in post-war Berlin and, while working for both British and Russian intelligence, became a rich publisher and politician – we encountered an obstacle. ‘Mr Maxwell,’ I said, ‘in the interests of fairness and objectivity, I need to find someone who will say something positive about you. I’ve found lots of your critics but no supporters. Can you suggest someone?’
‘I understand,’ he replied without surprise. ‘Let me think.’
Eventually, Maxwell proposed his former parliamentary agent. ‘I don’t know why you expect me to say anything good about Bob,’ the hapless agent responded.
Universally loathed as a crook, Maxwell unsurprisingly hated the finished film, which portrayed him as the megalomaniac Citizen Kane. His attempt to stop it being broadcast by bribing a BBC employee to steal the soundtrack from the Lime Grove editing suite during the night before transmission failed because fortunately a duplicate soundtrack was stored elsewhere.
Maxwell’s many enemies loved the film and, not surprisingly, our relationship was abruptly terminated. Maxwell appeared destined to be forgotten. Except that fifteen years later, in 1988, his resurrection was complete.
Like Lazarus, the Bouncing Czech had risen from the ashes. Maxwell had not only recovered Pergamon Press, but had created a global media empire which rivalled Rupert Murdoch’s. Once again enjoying fame and fortune, he was regularly photographed with all the world’s leaders – including Margaret Thatcher, Ronald Reagan and Mikhail Gorbachev – brokering deals, dispensing advice and establishing himself as an unchallenged billionaire. True to his habits over the previous forty-three years, the arch deceiver was once again looking with contempt at the deceived. That was the moment to write his biography. The first to be published.
At the time, I could not imagine the profound influence Maxwell would have on my life. Until then, despite his frequent use of libel writs and compliant judges to suppress the truth about himself, the pattern of his lies, frauds and lifestyle had been touched upon in newspapers, especially by the Sunday Times. But no one had established his true venality, and Maxwell intended to preserve that protective secrecy. The publication of Maxwell the Outsider in 1988 was marked by eleven libel writs issued by Maxwell’s lawyers to prevent the book’s sale. After it briefly hit number one, Britain’s booksellers withdrew the book rather than face Maxwell in court. Yet by then, many had read my prediction that his media empire would crash three years later.
On 5 November 1991, while sailing in the Mediterranean, Maxwell had a heart attack and fell dead into the sea. Within days, his empire was crumbling. Dishonestly and secretly, he had plundered the Daily Mirror’s pension fund to support his failing businesses and many of the world’s most famous banks were exposed as his co-conspirators. In total, about £2 billion was missing. Amid widespread anger, not least from thousands of innocent ex-employees whose pensions had been looted by Maxwell, the biography was republished with a major addition about his frauds.
Internationally, Maxwell became the archetype of a criminal tycoon. Britain demanded the prosecution of Kevin and Ian Maxwell, his two sons, who had been intimately involved in the management of his empire, especially the unauthorized use of the pension fund shares to raise loans. This book tells the astonishing story of Maxwell’s furtive activities during the last year of his life and the brothers’ trial.
The brothers’ acquittal in early 1996 sparked outrage. Although Kevin had admitted during his trial that he had lied to bankers and others, he would suffer no
