FINALLY THE PROSECUTORS WOULD have to try to put on a case. The Audit Committee would be next. These would be the respectable, unassailable truth-sayers, giving the Radler line from under the impeccable carapace of their careers and reputations. It was hardly a secret that all the defence counsel were going to attack Radler violently. The prosecution hope was that their bullets would bounce off the Audit Committee, lending credence in advance to the carefully crafted testimony of the chief cooperating witness. This, too, is not how it worked out, as we knew that the allegedly secret payments had been reviewed by the audit committee many times.
Richard Burt, whom I had known for many years, and with whom I had often been socially friendly, came first. He was elegantly dressed but seemed to have aged by twenty years since I had seen him last. His face was haggard and his complexion rough. He had been undersecretary of state for Europe and Canada, ambassador to Germany, and chief arms control negotiator. Since he left government, where his service was well-regarded, he had not shouldered such responsibility, and worked for a time for a Saudi group, in which capacity he pestered me unmercifully to buy very questionable assets. That was his notion of the fiduciary duties of a director, a concept in which he now wrapped himself as if in a winding sheet. He had brought Breeden in as Special Committee counsel, and I assumed that he made a sweetheart deal for the Audit Committee as he did so. Of course, Breeden castigated the Audit Committee in his report.
Burt announced that his present occupation was that he was a member of Henry A. Kissinger and Associates. Henry had told me many times that Burt was mediocre, with little aptitude for geopolitics. Henry told me four years later that Burt had never been an associate of his, only of someone with whom he had shared office expenses and other overheads. Rick Burt was just name-dropping, and Henry Kissinger was astounded to learn that Burt had claimed to be an associate of his. Burt would join the other Audit Committee members in the incriminating line they had subscribed to in exchange for non-prosecution by the SEC, and Kissinger would give Burt a needed job, though I doubt if it paid enough to cover his alimony.
It must be said that Rick Burt put on a pretty good show. He was not present at the Audit Committee meeting that had satisfied the auditors that they had approved the contentious payments, and beyond that, the many attestations he had signed or given in teleconferences of approval of the contested payments were just oversights. “I don’t remember” recurred quite frequently, but with the quiet confidence of a former ambassador.
Because Burt had alleged to the Special Committee that Peter Atkinson had broken down and in his testimony to the Audit Committee had admitted a fraudulent scheme of doling out non-competition payments to ourselves, Benito Romano had asked to go first for the defence. He did so, although there was no such allegation in Burt’s evidence at trial. Benito brought out the vital fact that all the Audit Committee members had signed a statement for the SEC and had achieved a promise of non-prosecution. He was careful not to claim an exact quid pro quo, but this was his chief contribution to the trial. When I had urged my own counsel to do this, Genson had insisted that this deal with the Audit Committee could not be introduced at all, or the Strine-Breeden-like document written up by the prosecutors for the SEC and pushed in front of and signed by the Audit Committee members would come into evidence. In fact, the non-prosecution agreement was revealed, but the joint statement was not. This was one advantage of having several groups of defence counsel. At least one of them was usually right. This information grievously damaged the Audit Committee’s credibility, even before a third of their evidence came in.
Most of the cross-examination of Burt was ineffectual apart from that. Gus Newman came next and was too jocular with Burt and too deferential to him as a former ambassador. On the second day, April 26, Newman started to make serious inroads on Burt, but then asked him about the February 2002 Audit Committee meeting. When Burt pointed out that he had not been at the meeting as was recorded in its minutes, Newman, inexplicably for such an experienced barrister, became evidently flustered and said, “Heads will roll in my brain trust.”
He should have said that he was aware of that but presumably Burt had received a description of what had occurred at the meeting; anything but appear completely nonplussed as he did. He then wasted the court’s time with a long irrelevancy about a non-compete deal Burt had approved at the Weirton Steel Company (a single, obsolete mill), of which he had once been the chairman. Newman’s cross-examination fizzled.
Newman’s sudden erosion, coupled with all the concerns we had about Greenspan’s serviceability, and Genson’s evident infirmities, though rather flamboyantly borne, highlighted the trouble with the disparate energy levels of the prosecution and defence tables. The four prosecutors were young, obnoxious, and prone to tactical blunders rooted in Sussman’s endless schemes and Cramer’s belligerency and the innate weakness of their case, but they had the energy of comparative youth, a fervent belief in their case, and the self-confidence that the usual success of the government’s steamrolling techniques gave them. If one devious tactic didn’t work, they knew another one could be improvised, always with impunity opposite the judge.
At one point Greenspan had laid out two large boards (called “demonstratives”) in front of the jury. He had secured the assistance of Chris O’Connor in setting them up on tripods, but unfortunately they barricaded Chris into the far corner of the courtroom, where he had to remain for ninety minutes until there was a break and he could decently extricate himself. The jury found this rather amusing.
Genson rose to the occasion and tore into Burt, and recovered the situation quite well for the defence, asking him about each individual occasion when he had seen the non-competition payments referred to (Chris O’Connor had discovered the number of 10K drafts* that contained these references that had been circulated, so that each member of the Audit Committee had seen the paragraphs on the payments eleven times). Genson also brought up a due diligence teleconference† that Burt had attended by telephone, in December 2002, in which the same payments were declared by Thompson to have been approved. Burt waffled and didn’t recall. He didn’t lose his composure, though he lost his verbal swagger, and Genson exposed his memory, if not his veracity, to be deficient many times. Nothing was made of Burt’s brain tumour and operation, as that would arouse sympathy and give cover for his amazingly selective amnesia, though I believed the tumour had contributed to his peculiar mental state. He seemed as unbothered when inaccuracies were revealed as he was when he uttered them.
I encountered Rick Burt as he was leaving and I was entering the washroom. When the door was opened and we came face to face at a range of barely two feet, I groaned, he sighed, and we passed by. That, I hope and assume, is the last contact there will ever be between us, the unforeseeable end of a friendship of twenty-five years.
As a witness, he credited me with “an intimidating vocabulary” and other attributes of intelligence but threw in completely with the abominable falsehood that I was part of a scheme to defraud the shareholders and directors in favour of my associates and me. On his character, Kissinger had been right.
All was now in readiness for the appearance of my old and formerly somewhat close friend Marie-Josée Kravis. Greenspan had Pat Tuite start, because he wanted him to establish the basic facts. The suspense about whether Greenspan was up to the task of being chief cross-examiner was about to be addressed.
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M-J, TOO, SEEMED AGED SINCE I had last seen her, three years before. She appeared to be embalmed, so white and taut was her face, though that might have been the result of having a bad allergy and flu that day. She was well dressed and walked and spoke confidently. Her rather high hair appeared to be set with magic glue, and her wax-works face was not well served by dollops of red lipstick like Anne Hathaway’s in The Devil Wears Prada. It had been a grand progression from convent girl in Duplessis’s old French Canada to liberated career woman admirably ahead of her time in Quebec in openly leading a relaxed personal life, to cohabitant with one of Trudeau’s ministers, to wife of the all-purpose-energetic conductor of the Montreal Symphony Orchestra, to the highest socio-economic stratum of New York. I had known her socially through most of this time and she had managed each stage with admirable sang-froid and panache.
When she raised her hand for the oath ending “So help you God” intoned by the judge, it reminded me of the picture she had once shown me of her at her First Communion. What unexpected and contrary currents had carried us along, and where might they take us yet?
The direct examination led her, in the manner that was now familiar, through a very labyrinthine course around awkward facts and events and obligatory admissions, but, like a good mystery hunt, to the objective: the witness knew nothing about the money we had supposedly taken for ourselves.
Pat Tuite started and was worrisomely deferential. I asked him at the break what he was doing and he said, “The jury likes her.” (The usual pallid excuse for defence counsel not doing their jobs properly.) I said that it was his task to disabuse the jurors of that. Tuite’s soft methods did entrap her several times in the dense 10Ks, where she claimed to have read things adjacent to the related-party section that detailed the matters she claimed not to have read. In his gentle way, Pat had made inroads and attracted the curiosity of the jury, which was not an effortless intellectual accomplishment.
They closed out Friday, April 27. She would be back on Monday, to face Greenspan. This was the time for him to show his mettle. Monday, April 30, opened with a more determined M-J striding to the witness box. I assumed that her husband’s public relations apparatus had got her the quite good puff-piece in the New York Times on the weekend, and where she had been demure on Friday, she came back in black and with spikier shoes, a slightly dominatrix look. Her face was less stiff and the overall effect was good. She rebutted Tuite quite effectively and his strategy of undermining her popularity in folksy increments made no progress on this second day. She won the first round. If we were going to derail the prosecution strategy of using the Audit Committee as respectable beaters for Radler’s tales, it had to be now.
Greenspan stepped to the questioning podium and, as was his custom, gave no greeting or introduction, in the falsely folksy American manner, paid no deference to her status as an economist or as president of the Museum of Modern Art, and started into a trenchant series of questions. She fought scrappily, challenged, and sometimes tried to speak over him, but he bore down on the real questions. She claimed not to remember being on one teleconference where she was recorded as present and where the contested payments were confirmed as having been approved. Then she answered that she could not speak of what she did not remember. Greenspan pounced on this with the agility of a cougar and went through a long series of confirmations of the payments that she had signed or attended, where the Audit Committee approved, and claimed now to have read but did not now remember. “We can’t count on your memory for anything.” If she had read the 10Ks, how had she missed, etc?
He went through version after version of the approval of these payments. He even wrung from her that she had read the first 104 pages of the 2002 10K very carefully, by establishing that she had read a selected paragraph that stopped on that page. This happened to be the very paragraph before the exposition of the disputed payments. This was not credible. Even less credible was the fact that, as she emphatically restated that she had read everything up to that point, she somehow missed the original reference to the same payments, in an identical paragraph, forty pages before.
What particularly incensed me about her performance was that she fell in enthusiastically with the government’s position on the perquisites of the Hollinger executives with enthusiasm and determination. These were not areas that involved the SEC, and a refusal to comply with these trumped-up charges would not have inconvenienced her husband’s business. (I assumed the SEC had threatened KKR, as well as the defendants as individuals.) She had caused the Audit Committee to adopt the position that Radler and I should always travel on the company planes for security reasons, as she was aware of the security threats we had had, from extremist Irish and Muslims. We received threats almost every week. Now she was conscripted, with no knowledge of the facts, and after the matter had been demolished by Greenspan cross-examining Creasey, to object to my flight to Bora Bora. When Greenspan asked to confirm that there had not been a policy permitting or prohibiting personal use of the airplane, she replied: “That’s not correct. There was the law.” He said, “I’m sorry. There was what?” “The law.” “The law is policy?” “I would hope so.” He pointed out that she had moved the requirement that senior management use the company’s plane for security reasons, and her attempt to masquerade as a sheriff petered out in a debate about when the IRA had blasted our old office buildings in London. It was a very irritating rodomontade.
Even more outrageous was her pompous disparagement of the December 4, 2000, dinner that was billed as a birthday dinner for Barbara, as illegitimate for any corporate participation in the cost. I had consulted her about what arias should be sung by the person from the Metropolitan Opera that I engaged. She knew perfectly well that it had begun as a corporate dinner, and was approved in the minutes of the previous directors’ meeting as such, and she was aware from attending the last phase of it that it was certainly a corporate occasion. The commercial role played by Barbara’s conversation with Donald Trump, whom she sat next to and had never met before (an unusual placement for a supposed birthday party), was also referred to subsequently, and Kravis knew about it.
In becoming so sanctimonious about routine corporate expenses, and in trying to incriminate an old friend whom she should have known to be innocent and, indeed, morally incapable of crimes, and who had done her many favours in days when she was less exalted, she was betraying the professed ethos of the big business, big philanthropy culture where she had coquettishly bluffed, conferenced, and made her way to the summit. Her perseverance was commendable, and I had been happy for her, despite her recently acquired and unbecoming du haut en bas self-importance. At her new socio-economic echelon, inculpating former close colleagues and social friends was unseemly.
The jurors, unworldly in these matters though they were, were not inexperienced and recognized moonshine when they heard it, and saw at least that her testimony was not believable. So did the press, and they pierced the lingering prosecution bias of much of the media to arraign my formerly good and glamorous friend for incompetence and lack of credibility. She was guilty of both; worse, and bitterly surprising, she was contemptible.
Romano again brought out the non-prosecution deal with the SEC, which tore the rug out from under whatever was left of the credibility of the former Audit Committee. Kravis walked upright and ostensibly shameless from the courtroom. She had walked brazenly away from many embarrassments before, but she did not have the dominating air she had affected on her second day. She had the slightly wan air of the naughty convent girl who has endured Mother Superior’s wrath, the rosary, even the hairbrush.
The New York Times revealed that she had returned to New York in time to be the hostess at one of the MOMA evenings, which I was thankful I was no longer asked to contribute $25,000 to attend. Being spared the rigours of the New York society charity circuit was one of the few dividends of my present thralldom. Press reaction to her performance under Greenspan’s questioning was uniformly disrespectful.
A final thought on the Kravises: a few weeks later, Marie-Josée expressed the hope to a mutual friend that I be acquitted. That may be how it works in the heady echelon where she now lives and reigns, but it won’t do. Albrecht has his Laurentian Rhine-Maiden, and Marie-Josée has the magic (cushion-diamond) ring and the gold, but she was speaking for the record under oath, before a federal judge, a jury, and the press of the Western world, on matters of high principle and public policy interest.
She chose the path of the low and mindless Park Avenue gossip. I had thought better of her as an aventurière who had hit the jackpot and had raised herself up.
I had admired her and rejoiced for her success, and success it was: she is a good wife and chatelaine and carried off her relaunch in New York with tremendous aplomb before the most skeptical audience in the world, including many “friends” to whom Barbara and I strenuously championed her and who now coo about her French savoir faire.
I had watched as Marie-Josée left the Bilderberg conference I invited her to near Athens, in 1993, when she got into a taxi with Henry Kravis, whose acquaintance she had recently made. She was wearing a short pink mini-suit, to start, I surmised, a new life. Most of what followed was foreseeable and, for me, who liked her, heart-warming. She was moving off a rough road onto a great boulevard.
Unfortunately, her success had affected her sense of decency. If she would go before the press of the world and under oath to incriminate me in matters that had nothing to do with her or the SEC, nothing was beneath her. I didn’t expect the truth from many witnesses, and would have been astonished to hear it in these circumstances. I did expect a closer approximation of it from her.
She would have lost nothing and gained much if she had stuck to the “story” she told the SEC but not looked down her nose at an air trip that it was now public knowledge I had overpaid the company for, and a dinner that she knew to be a largely corporate event, which she had helped plan.
The wanton climber is morally clothed with some rules of the road. Once arrived at her destination, in that one sense, Marie-Josée was naked; there was no haute couture or expensive lingerie to disguise her performance. The spectacle of her testimony was ugly.
NOW THAT THE TRIAL HAD REACHED the Audit Committee, the stakes were greater, the theatre was higher quality, and the possibilities were intriguing.
The press leapt at the appearance of Eddie Greenspan in the role that he had been touted to fill. He was an instant hero, and left Eddie Genson feeling quite disconsolate. Fortunes shifted quickly, and where there had been some thought of importing Terry Gillespie to cross-examine Radler, Greenspan was now the leader of the defence counsel. I had a reprieve from my fears about the competence of my counsel, even if my daughter and wife did not. If Greenspan could thrash the nimble M-J Kravis to a pulp, as he had, I knew he would not have much problem with the ponderous Thompson, who was in the muck of the Audit Committee’s lapses more than Burt and Kravis.
He had been the well-paid committee chairman, and anyone who had seen his rather inept performance as a member of the 9/11 committee would know what a mismatch there would be between Thompson’s amnesia and Greenspan’s questions.
Sussman gave Thompson a very breezy, flippant, direct examination and then tendered him to the defence. Greenspan tore him limb from limb. He dragged him like an un-housetrained dog to the sight of his many incontinences and asked him how he could claim to be unaware of the payments. Thompson acknowledged, as every director of a public company knows, that the first item to be read in any 10K or financial statement is the related-party section. When asked if he had read the eleven versions of the 10Ks he had signed and the offering memorandum and the proxy circular that he had signed and approved that contained approvals of the contested payments, he said, “I skimmed” them.
Greenspan instantly saw the potential for that. “Skimmed?” This started a long series of questions brilliantly played by Greenspan. He established that Thompson made $80,000 a year for two days work for Hollinger International and that he spent as much of the company’s money travelling with his wife to one of our corporate dinners in London as the company paid for its part of the December 4, 2000, dinner I was charged with embezzling. Thompson blundered headlong into one baited trap after another for about four hours. It was a thoroughly enjoyable performance. Greenspan concluded with a mortally damaging question: “I suggest to you that you and the other Audit Committee members knew all about these payments, that you approved them all, and that when criticism arose, you all conveniently forgot. No more questions.” Greenspan left his podium while Thompson spluttered his unconvincing demurral.
Everyone in the courtroom knew that they had all given inaccurate and misleading testimony and only the protection of distinctly uncomfortable U.S. attorney Patrick Fitzgerald, who favoured us with one of his visits to the courtroom, prevented them from suffering for it.
Safer took a line at some distance to the position of the other defendants, as Kipnis had been a salaried officer and had received no non-compete payments, but he did a great deal more harm to Thompson’s credibility than to the co-defendants when he wrung from Thompson the fact that his committee had approved more than $216 million of payments over seven years to the senior management (not an unreasonable figure given the number of people involved and the performance of the company), without once asking for a single page of documentation. Safer ripped into Thompson with great histrionic emotion and scored very heavily for his client, an evidently decent man who was following Radler’s orders and had not profited at all from the contested payments. Safer presented a very large demonstrative exhibit (a panel about twelve feet long and four feet high), detailing the many Audit Committee approvals of the disputed payments.
Where he had arrived as the former U.S. attorney and four-term governor, much deferred to, Thompson left as a joke, discredited and unconvincing. For weeks after, weather girls on Chicago television and traffic reporters in helicopters spoke of “skimming clouds” or “skimming over” an expressway. The truth-sayers who were to pave the way for Radler, and respectabilize and render credible his orchestrated story, had failed completely. They had been torn to pieces, and were revealed as, in Mark Steyn’s words, “Olympic-scale synchronized skimmers.” They accustomed the jury to the relentless exposé of the frailty that comprised the prosecution’s case. I suggested to counsel that they say that these witnesses are indistinguishable from bank robbers and street thugs. As usual, my advice was too bold for the lawyers. There were three of them (on the Audit Committee); they had eleven draft 10Ks, which each had two prominent references to the contested payments, plus proxy circulars and the due diligence teleconference and visits from KPMG. There were more than seventy-five sightings of these approved payments by Audit Committee members. The government case was a shambles, and knives were noisily being sharpened for their long-awaited star witness.
There were temperamental problems with both Greenspan and Genson, as well as physical ones. They frequently slumbered in the afternoons, facing the jury, not a very dynamic or purposeful image to project to those who would decide if I would spend the rest, or any, of my life in prison. Greenspan would awaken occasionally, like a crocodile whose nostrils have been tickled by a ripple on the water, and advise me to sit differently, that my posture was too erect for the jury, and then doze off again. (Mark Steyn called them “the dream team.”) It was very disconcerting.
Any new development tended to panic them. On several occasions they rushed into our little luncheon room and announced we had to demand a mistrial. I asked why, since there was no chance of obtaining one; wasn’t there a tactical response? Usually there was. When it was suggested that my “Musings” – which I had written periodically for the Ravelston partners and which tended to be intricate, and florid at times, but were always respectful of the shareholders and certainly never came anywhere near anything unethical – could be brought into evidence, Greenspan immediately said that in that case I would have to testify. This was nonsense. I didn’t think he had read any of the Musings anyway, and I said we would have no problem explaining them.
The issue of my testifying was something Greenspan and I had always thought was an ace up our sleeve. The prosecution had so oversold the idea that I was a snob and a brigand that I would be like an owl to crows. I knew the facts and had already memorized a great deal of the material. We put it about that I was desperate to testify and that Greenspan was horrified at the prospect.
Neither was the case. I could have seen off the prosecutors, but we were not sure how jury-friendly it would have seemed. Under U.S. rules, if I had testified, the prosecutors could have questioned me on many subjects they were not otherwise allowed to touch. Under U.S. rules of procedure, the prosecution can designate a wide range of subjects it reserves the right to raise if a defendant consents to testify on his own behalf. I could have fielded any admissible question, but my testifying would have prolonged the trial, made it much more complicated, and put us more on the defensive. It would have vastly raised my status as an accused above the other defendants, among whom I was trying to obscure myself, as much as they were trying to pretend this had nothing to do with them. We were doing very well pummelling government witnesses.
The government was promising to play the audio tapes of the 2002 and 2003 shareholders meetings, and I was confident that I would come through them well. In the end, we felt we got most of the benefit of my testifying through those audio tapes, with none of the downside that could have arisen from the Picador antics of Sussman and Cramer. I would have enjoyed slapping them around, but I might not have won friends on the jury doing so.
I had written hundreds of pages of explanations covering every allegedly inconvenient statement I had ever said or written, covered by condensed summaries. I rarely had the impression that either of my principal lawyers read much of it, other than when something was directly related to a cross-examination of theirs, though the junior counsel certainly did. Chief counsel were expected to be cool, unflappable, and physically and intellectually vigorous. Mine were not always encouraging in these respects.
On Monday, May 7, Sussman brought on a snoozer from KPMG, whose testimony was not relevant to anything, and then my former New York secretary Jan Ackerhielm, who was innocuous but irritatingly allied to the enemy. A pleasant, loquacious woman, she had been the secretary to Democratic Party chairman Larry O’Brien.
Then, at long last, David Radler emerged. He was hunched, very tanned, and trying to put a positive face on the shameful tale he had to tell, after ratcheting up his version of events to clear the hurdle set by the prosecutors. He seemed fairly cheerful, and at times witty, and less odious than defence counsel had prepared the jurors to expect. He had a bright-orange tie. No family members accompanied him. After all that we had been through together, and after such a build-up of anticipation, his appearance, though dramatic, was an anti-climax; it was hard to believe, even as it unfolded, in his first days as a witness, that any such preposterous scene was really happening.
The Rat bit on the second day. It had been a scheme to defraud the shareholders. He had picked it up a notch since his grand jury testimony, when he had claimed a silent conspiracy. Then he had simply not reported these payments to the Audit Committee and no one spoke of it. They augmented his grand jury statement by saying that there had been two or possibly three telephone calls, the last possibly involving Boultbee as well as, or instead of, me. This was where and how he received his orders to cheat the company out of $30 million in now claimed, undeserved, unapproved non-competition payments to individuals and to Hollinger Inc.
It need hardly be stated that no such conversations ever took place. The snitch, the whistleblower, one of the exalted figures in contemporary American commerce, is a familiar and generally despised figure, in schools and families, now revered only by the prosecutors and emasculators of the U.S. executive class. But Radler was operating on a different plane. He told a story that would bring me down and thus hold Breeden harmless from the consequences of his misconduct. Like dog trainers, Sussman and his interrogators kept raising the bar and told Radler he would have to incriminate me convincingly if he wanted a deal, to alleviate the punishment of his own crimes. Thus appeared in Radler’s sworn testimony the “two or three” telephone calls.
To inculpate me and equally totally innocent colleagues as collateral damage, to satisfy Breeden’s and Fitzgerald’s rabid lust for the big fish, and Breeden’s fear of my Canadian libel suits, and to secure an almost painless reprieve from his own crimes and the enjoyment of his newspaper acquisitions, Radler told his version and swore under oath to its authenticity. To Radler, it was a shabby but comprehensible business proposition. But it was despicable for the chief law enforcement officials of one of the country’s greatest cities, and the U.S. Department of Justice itself, to be full, knowing accomplices.
On the afternoon of May 8, as court was adjourned, I wrote a summary of the many errors and falsehoods in Radler’s testimony. He had implied, echoing the Audit Committee, that there was no geographic division in our company and that we were both immersed in all the operations of the company. This was a complete fiction; the East-West division had existed since he moved to British Columbia in 1972. (Israel, which he ran, and Australia, which Dan Colson and I ran, were exceptions to the rule.) He tried to involve me in American Trucker and now claimed that his fax to all of us that the buyers in Paxton and Forum wanted non-competition agreements from us was a joke. Radler had the effrontery to wave at my son Jonathan (to whom, I must say, he had always been very kind), who joined us for the week, in the corridor, and who resisted the temptation to give a digitally coarse, or any, response.
Radler claimed that we could not show these Paxton and Forum payments to the Audit Committee. In fact, as they represented a small percentage on a book profit of $562 million on the community newspaper sales, and a real profit of about $1 billion (because accumulated profits from the assets had retired their acquisition cost), there would have been no difficulty with them, if they had been requested, which previous testimony at the trial confirmed, through the buyers’ wish for non-competition from “affiliates” of the vendor company. Otherwise, the Audit Committee would not have reconfirmed the contested payments at least fifteen times.
As has been mentioned, when Radler had told me of his sales of the community newspapers, which I had proposed, I told him that his success would have to be rewarded. I spoke to Boultbee about giving Radler a $1-million note from Ravelston, to be cashed when this would be practical. He had called back a few days later and said that there was no need for that, as recent buyers had requested and the Audit Committee had approved additional non-competition payments. And the executive committee (with only Richard Perle voting, as Radler and I were interested parties) approved the Forum and Paxton payments and was ratified by the whole board after what the adopted minutes of the meeting called accurately “extensive discussion.”
After Israel Asper had requested non-competition payments from me, Radler had become intoxicated with them, especially their tax-free character in Canada, and devised them where he could, but failed to get an orthodox approval for some of them. The rest of us accepted his word that they had been specifically approved and requested, as the CanWest ones were, in a deal I had made and supervised, and we kept seeking routine confirmation from the Audit Committee of what we believed they had done. They gave that confirmation many times, and were confirmed in that by the auditors. This was the most fantastic fable of a silent conspiracy I have heard of; Gus Newman was correct when he said in his opening remarks that Soldier Field or one of the other Chicago stadiums would be necessary to hold all the conspirators, including dozens of lawyers and auditors.
Sussman had a weak conclusion with Radler on the morning of May 9, and it was Greenspan’s turn. This was the moment we had all been awaiting for sixteen months; it was Crispin’s Day.
Greenspan had an odd start. He demanded, for more than ten minutes in a tone of biblical wrath, to know if “God” had been mentioned in the oath Radler took in Kelowna claiming falsely to be an equal shareholder to me in Horizon. Radler replied with excessive deference in contrast to Greenspan’s pugnacity.
Greenspan: You were sworn before a Canadian court to tell the truth, so help you God in a trial that was conducted on January 25th, 2002, in the case of Winkler versus Lower Mainland Publishing Ltd. Correct?
Radler: That’s correct, yes.
Greenspan: You swore at the trial to tell the truth, correct?
Radler: Yes, I did.
Greenspan: And you swore to God to tell the truth, right?
Radler: I swore to tell the truth. I don’t remember the actual, the actual –
Greenspan: You swore on a Bible, you swore with a Bible in your hand. Correct?
Radler: I don’t recollect the Bible but I will accept that it’s possible.
Greenspan: Canadian courts are no different than American courts, right? On that, at least on that point, when you swear to tell the truth.
This unfortunately was another procedural difference of which Greenspan was unaware. U.S. courts don’t require a Bible.
Radler: I swore to tell the truth.
Greenspan: And you swore to God that you would tell the truth “so help you God” correct?
Radler: You can … do you have the transcript of what I did swear?
Greenspan: Yes, I have the transcript, which summarized that you were duly sworn. And duly sworn I am going to suggest to you, you well know that you took the Bible in your hand to tell the truth, so help you God.
Radler: I was only in court once – twice in my life, sir.
Greenspan: I don’t know …
Radler: So I do not …
Greenspan: Are you having difficulty with my question?
Radler: I just want to see the basis on which you said it. You said I swore with my hand on a Bible. Show me the basis.
Greenspan: Well, I’m going to suggest – did you swear with a Bible in your hand here?
Radler: No I didn’t.
Greenspan: You didn’t swear with anything in your hand?
Radler: That’s correct.
Greenspan: OK. I see. So the testimony you are giving is not sworn testimony?
Radler: It is sworn testimony, yes.
Greenspan: It is sworn testimony. How?
Radler: I swore to tell the truth.
Greenspan: With no Bible?
Radler: With no Bible.
Greenspan: And you swore to tell the truth in British Columbia with no Bible?
So it went.
On and on and on. Greenspan was revealing that he had not paid attention when Radler had been duly sworn in front of him just two days earlier. His repetitive and unproductive questioning was minimizing the valid point that Radler had not told the truth in that earlier court case. Greenspan’s next move was to become infuriated with Radler when he fumbled with pages shown to him. At one point, more or less predictably, Barbara passed me a note suggesting that I interrupt proceedings and tell the court that there was a medical emergency that required Greenspan to withdraw. This would have been the most catastrophic course imaginable, and I ignored it, but it did betray the flaring nervosity in our camp, which I shared.
Greenspan had serious points he wanted to make, but his delivery and courtroom manner seemed out of synch with his material. He began with fury and had nowhere to build when he got to the heart of the matter. Radler quickly saw that Greenspan was having difficulty and began to enjoy himself. Over at the defence tables, the mood was grim. Safer held his head in his hands and only looked up to mouth the words: “They hate him, hate him,” referring to the jury’s feelings about Greenspan. The impossible was happening in front of us. Greenspan was turning Radler into a sympathetic witness.
Greenspan gradually strengthened, and was counselled by other lawyers at the break and came back fairly well. He scored heavily, again and again eliciting that Radler had lied. He pounded through many instances of his lying, and followed the sixteen meetings with the Special Committee and the U.S. attorney, tracing the evolution of Radler’s story until he eventually claimed that he had been instructed by me to conduct a criminal conspiracy against the shareholders. Endless admissions of lies as he scaled the heights of accusation necessary to secure his undisturbed control of the Horizon newspapers and the penitential golfing holiday in British Columbia wore down Radler’s jauntiness. There was no jokey or respectable way of admitting to such a dismal sequence of lies and thefts. Radler himself had none of the contrition of the wrongdoer confessing to a conspiracy he was part of in order to atone for his crimes and oblige others to do the same.
He made a mechanical admission that he had lied and what he did was wrong, but said that Boultbee and I had told him to do it and that Atkinson was in it up to his eyeballs too. He did perform the commendable service of trying to excuse Mark Kipnis. He said that Kipnis had not been given a $150,000 bonus because of his role in the controversial payments, but because he had been terribly overworked, especially in the CanWest matter, and had saved the company $750,000 in legal fees. This, apart from stating his name, acknowledging that he was a liar, and defending the payments from American Publishing, were practically Radler’s only truthful utterances in his many days of testimony.
I occasionally reflected, as the Radler showdown wore through the May days, what a strange relationship we had had. We had both believed in the newspaper business and determined to expand as quickly as possible, having seen the profits that could be made from the Sherbrooke Record, which had been completely derelict when we had bought it in 1969.
He married and moved to Prince Rupert, British Columbia, when we bought the newspaper there, and then to Vancouver. And in 1974, I moved to Toronto. We spoke on the telephone about once or twice a week, depending on business factors, and each of us took responsibility for expanding his “division.” When the opportunity to take over Argus Corporation came up in 1978, I became more preoccupied with other things and he broadened into other, not very successful ventures, such as a group of B.C. motels that were chiefly maintained in business by the government of Canada, which housed welfare cases in them, and a jewellery store in San Diego that never made money.
David Radler told me that he had always filed his tax return with an obvious error in it, so that the tax inspector would think he had caught any liberties in the return when he discovered that. Similarly, it was part of his personality that he seemed to think that in admitting he couldn’t send a fax or an email, he was making up for the millions and millions we lost on the Jerusalem Post, the eighteen-month delay in starting up the new printing plant in Chicago, and his other blunders.
Once the Internet arrived, David Radler pretended it wasn’t happening. He claimed total vindication when the dot-com bubble burst, and he was opposed to spending anything on promotion of the Sun-Times, or any Internet aspect to it. He was a poor publisher in Chicago, intimidated by a large unionized property, a large strange city, and the pre-eminence of the Tribune. He was never interested in editorial matters, other than laudations of Israel, and his answer to everything was to cut costs. He caused terrible ill will to arise against us in the Chicago properties, largely because of his propensity for mad, counter-productive economies such as shutting down the escalators.
Despite management errors, we did get the Sun-Times off ancient letterpress machinery that produced a visually terrible product. And we did buy many of the surrounding community newspapers to give the Sun-Times a solid framework of supportive local titles. Because Radler was so capricious, overbearing, and insensible of elemental personnel relations, there was no esprit in the company at all in Chicago.
After I went to London in 1989, I saw Radler only at occasional board meetings in Toronto or New York. The prosecution had tried to make the case that we were intimates and that our families holidayed together. Greenspan quickly elicited the fact that the one time we had holidayed as couples (with my first wife, but a few months before we were married) was in 1978 and that it was, as Greenspan put it, “so memorable, it has not been repeated in 29 years since.” In fact, though his wife was pleasant and had a good sense of humour, the only basis on which I ever enjoyed him after we left Sherbrooke was hearing his recitations of amusing business experiences over the telephone.
It was naturally a very strange experience listening to his false incrimination of me but also seeing his squinty, evasive eyes. As he was brought through the court by the government handlers, or from the elevators to the holding room, he appeared an outcast, even to himself. Hunched, furtive, with darting, fearful eyes, he looked like a man bound for the gallows, worn down as much by a knowledge of his own wretchedness as by the impending punishment.
Now despised, perhaps even despising himself, a derisory shadow of the former strutting, orders-barking executive, as exhausted of wisecracks as of integrity, unattended by any family or friend or even a lawyer of his own (apart from one day), David Radler was too distasteful to be pitiful, too diminished to remind anyone of his days of consequence, too banal to arouse any interest at all.
I had always known there were compatibility problems with him, but I had never until now realized the scale of them. When I saw him leave the courtroom for the last time, as if in a trance: twitchy, timorous, and bowed from the battering meted out to him, abetted by the prosecutors’ obvious indifference to him personally, unlike other government witnesses, whom they cosseted with feigned respect, I hoped and expected that I would not see him again. His was a strange and affecting tale. He had been an upwardly mobile Duddy Kravitz, but was gradually transformed by the thinning air and rising pressures of the spheres he rose to, not toward self-confidence and serenity, but rather misshapen by envy and insecurity that drove him to treachery and cowardice. The fearful deserve sympathy. But in this case, it must be deeply mitigated by David Radler’s dishonesty. Yet it is very sad.
There would be some drama yet, before the curtain came down on him in these proceedings. The next day, May 10, was the anniversary of Winston Churchill’s installation as prime minister and his utterance of the words Eddie Greenspan had carried in his pocket: “My whole life has been a preparation for this hour and this trial.” On this day, inexplicably, Greenspan simply collapsed, and was terribly ineffective. He was ponderous, repetitive, disorganized, and excruciating. It was mortally embarrassing. More and more frequent and urgent messages came up from Barbara, Alana, and Jonathan, two rows behind me. Fortunately, it was only a half-day, and court would adjourn until Monday, May 14.
Greenspan continued to expose Radler as a liar, but with no novelty and in a terribly slow and laborious way that almost incited sympathy for the witness. Finally, when he put, for what must have been the fiftieth time, the question “And that was a lie?” Safer, of all people, objected: “Asked and answered.” “Sustained,” said the judge at once. It was a crushing insult to a lawyer of Greenspan’s stature, for a defence co-counsel to humiliate him before the whole court and the media. He looked quizzical, and had no apparent notion of what a slow-motion taxation he was putting on the court and everyone in it.
IT WAS A FUNCTION OF HIS DIABETES and medicine and eating habits, which his daughter Juliana and document lawyer Jane Kelly were supposed to oversee. If everything wasn’t in balance, Eddie would run down like a clock, and become slower and more tedious. It was a cruel fate for such a good lawyer, but it was an unkind destiny for the client, too, especially at such a crucial moment in this trial and in my life. I could hardly believe that I was now to deal with another unbidden crisis. As Gus Newman said to me, my counsel had to tear Radler down and, as he put it, “expose him as a scum-bag.”
There was a new crisis in our camp, as we considered what to do with Greenspan. May 10 had been a disaster. Court would resume on Monday, May 14. Earl Cherniak, a distinguished Toronto barrister who was acting for me on many of the civil matters I was involved in in Canada, and his associate, Lisa Munro, came to Chicago to test me as a witness, in case I decided to testify. For three days I had Earl doing a pretty fair simulation of Sussman, though much more intelligent and, when he worked at it, almost as obnoxious. All thought we were winning our case, and had established much more than a reasonable doubt on every count. Any fair reading of the transcript and examination of the exhibits confirms that we did.
Earl’s preparations were useful. While Greenspan was in the room, I couldn’t resist giving outrageous answers, but after he left, I toned down my responses and got through the questions fairly painlessly. When the time came, though I was well-prepared, all the defendants and their counsel thought such an appearance unnecessary by any of us.
One of the problems Greenspan had, which had not been anticipated for so legendarily quick-witted a person, was that though all of his questions to each witness were written out for him as in a script, between Sussman’s interruptions and Radler’s diversions, he tended to lose his way. Radler had developed the technique of claiming to be unable to answer questions without seeing the document referred to, and Greenspan fell into the habit of showing it to him. I asked why this indulgence was given to Radler; why not oblige him to answer? Greenspan thought that it was better to allow him to read what he had written or said in order to force him to reconcile it with contrary statements or facts rather than merely saying that he didn’t recall. He was probably right, but it made for a very grinding cross-examination. Sussman and Cramer were likely pleased with this tactic, which cushioned the impact on the jury of the credibility problems of the witness.
When Greenspan did not get the answer he was anticipating, it tended to throw him off, and he moved on to the next question on his list, even if it was made a non-sequitur by the unexpected answer. It created the impression of a disjointed, somewhat feckless, cross-examination. He had done a good deal of damage to Radler initially but had been so repetitive and ineffectual on the tenth that none of us was confident that the jury, as several of its members descended toward the arms of Morpheus, grasped the implications for the prosecution’s case of the enormity of Radler’s falsehoods.
Over the weekend, the tactic emerged from lawyers meetings, as I was being tortured by Earl with his super-Sussman simulation, of dealing rapidly with five separate themes with Radler on Monday. George Jonas, by telephone, and Earl and I went over things carefully with Eddie Greenspan. I attended the strategy conference, which was an unusual event and not particularly welcomed by the lawyers, who tended to regard the client as an annoying object, as opposed to an animate subject, who caused their effort to be exerted and their invoices to be generated and paid. I had a heart-to-heart talk with Eddie, and checked Eddie’s sleep and diet matters with Jane Kelly. It seemed like what we were planning was a sensible change of pace that the enemy would not anticipate. When I called on the evening of May 13 to give him a final word of encouragement, he was so tired, he was almost incomprehensible but assured me he was about to retire for the night.
MONDAY, MAY 14, WAS A SMASHING success. Greenspan was alert and crisp, and Radler and his masters had no idea how to deal with what we threw at them. Greenspan had caught Radler saying on his first day of cross-examination that he had read the Special Committee reports, and on his second day that he had not. He could not explain the contrary transcript extracts when they were placed in front of him. Eddie walked him through the Horizon swindle, where he had pledged to be a passive, minority shareholder, and controlled the company; where he had pledged that our shareholdings were equal and lied under oath in court in Canada about it. There was a series of other inconsistencies that were quickly raised and that Radler could not answer. He floundered and waffled and clearly disgusted the jury. The prosecutors, who delighted in mimicry and juvenile facial gestures to the jury, looked very wan and drained and studied the tabletop like chastened schoolchildren rather than the faces of the female jurors.
The climax was when Radler claimed not to have had any idea that being transferred to Canada would reduce his sentence to six months. Greenspan was well prepared for that and recited extracts from the relevant texts, described the facilities he would go to, with theatre and golf and horse-riding therapy. Greenspan eventually revealed that Radler had retained one of the foremost parole counsel in Canada three years before, and demanded to know what lawyer had advised him to give the false answer he did in court in Kelowna on the Horizon issue. It was a rout, Radler was smeared over the floor and walls, and it was the Greenspan of olden time. Regrettably, the court refused to allow us to call him back as a witness to plumb the depths of the Canadian perjury and treaty transfer issues.
The Canadian media at the court, which had touted Greenspan to their skeptical British and American colleagues as the trial began, and had seemed to be justified after his demolition of Kravis and Thompson, had been scandalized by the disaster of May 10. The Toronto Star wrote that Greenspan was washed up and had always been overrated and that I should put him on the first plane home to Canada. After May 14, however, everyone conceded that he was the leading figure of the courtroom. The CTV National News opened with five minutes on his demolition of Radler. On May 10, the Toronto Star reporter (Jennifer Wells) had predicted life imprisonment for me. On May 14, CTV’s correspondent (Steve Skurka) predicted victory for the defence.
Gus Newman followed Greenspan and was at his best. All the defence counsel had the same interest in the destruction of Radler, and there was no difference in this respect between the interests of any of us. Ron Safer wound up the cross-examinations on May 17 with one of the trial’s spectacular moments and histrionically tore the Rat to pieces yet again. He dwelt upon the relations between Radler and Thompson, pulverizing two already dying birds with the same stone. He referred to Radler’s letter to Thompson and Paris in November 2003, in which he stated that Thompson’s committee had approved the contested non-competition payments. This gave the lie to all Radler’s assertions that there had been a scheme to steal money. “You wouldn’t write a letter to Governor Thompson stating that he had done something you knew he had not done, would you?” Radler wobbled badly again.
When Safer got to the December 2002 teleconference, when the counsel for the lenders asked about Audit Committee approval of the non-competition payments, he asked Radler: “Were you panicked?” Radler thought not. (If the payments were furtive and unapproved, the questions to Thompson and Kravis would have blown up Radler’s “scheme.”) “Weren’t you afraid that your entire scheme was about to be exposed?” Radler again wobbled very implausibly. The judge frequently told Radler to answer counsels’ questions.
Safer had great forensic talents and always had a voice and countenance that burned with emotional sincerity. He moved all around the front of the room and always had his own exhibits and evidentiary documents in perfect order and at his fingertips. None of the prosecutors, or even the judge, won an exchange of repartee with him, as he always was quick but earnest, and had the knack of scoring his points without ever seeming condescending or belligerent. Over all, he was the most impressive barrister in the court. But my counsel did the most damage to the witnesses we had to destroy, and no other team had the will to destroy them.
Mark Steyn’s splendid summary of Radler’s testimony, in his blog of May 17, was:
Mr. Radler told the truth to the U.S. Attorney’s office when he said he lied to the SEC about telling the truth to the Special Committee about whether he’d lied to the Audit Committee about telling the truth about the non-competes.
As to whether he lied to the court in Chicago by claiming to have told the truth to the court in British Columbia about whether he’d lied to Conrad Black by not telling him the truth about Todd Vogt, he was in fact telling the truth when he said the lie he told had been approved by his lawyer, whom he had no reason to believe was lying.
On the matter of whether he lied to the court this week about claiming to have told the truth last week about not having reviewed the transcripts of earlier lies from 2003 to 2005, he was telling the truth when he said he would need to review the transcripts of last week’s lies before he could ascertain whether he was telling the truth about the transcripts of his previous lies.
On the question “Are you lying now, yes or no,” Mr. Radler said yes, he would be lying if he were to claim to be telling the truth, but no, he told the truth when he said he was a liar. Also, both of the above, as he was not familiar with counsel’s use of the word “or” but had been advised it was a breach of attorney-client privilege, and neither of the above, as he would need to review transcripts of what he had said 30 seconds earlier as he had no recollection of whether he was telling the truth or lying at the time he began speaking this sentence.; which is a longer sentence than he’ll be serving at that British Columbia country club.
It was to this farce, draped in infamy, that my associate of thirty-eight years had descended, and to which he had reduced our companies. As if in a trance, Radler was led away from the court by his handlers to await gentle imprisonment, a publicly admitted liar, thief, perjurer, squealer, and cheat. Everyone who witnessed it shared the resulting distaste, apart from the prosecutors, who got a good deal less from the witness than they had been sold by Radler’s counsel, when he procured his client’s golfing holiday and prosperity ever after with his doubtfully acquired assets.
If it had been possible for Sussman to offer Atkinson and Kipnis acquittals, I suspect they would have been prepared to impute something unworthy, though not illegal, to me, but not, I think, total inventions. Fortunately, the rules did not allow Sussman and his co-sorcerers to make such an offer. The best they showed Kipnis, late in the trial, was three years in prison. So, finally, by the bungling of the prosecutors, which was all that tempered their zeal, and by the integrity of the other accused, we cobbled together a logically unanswerable case of innocence.
Whether it would be so decided depended on the susceptibilities of a jury that was yet, in that distinctive elbows-and-shoulders, swaggering, blue-collar Chicago manner, apparently oblivious of its limitations. The jurors were flattered by the endless attentions of the judge, peppy and bright, but for all the world, she too was apparently unaware of the decadence of the system that generated this degradation of due process in which she served with such pert agility.