FRAUD - Non-Competes

Thought the alleged perquisite abuses garner more publicity, the non-competes form the largest and most potentially damaging elements of the US Attorney?s case. So persuasive is Genson?s simple yet erudite defense on this point that one must truly ponder the underlying motives of the Government for bringing these scurrilous charges (theses on this point to be offered later).

Essentially, Black defends very impressive payments on two fronts. First, in the case of Can West the buyer clearly and presciently demanded the non-competes as a condition of the massive $3.2B sale of Hollinger?s papers in Canada. This condition is confirmed by handwritten notes from Izzy Asper, the now-deceased chairmen of CanWest, and his editor son. Certainly, Can West did not fear western Canadian competition from the offices of Hollinger Intl in Chicago, but rather the well-earned Canadian newspaper prowess of Black and Hollinger Inc in Toronto. Moreover, Black should in fact be congratulated, not indicted, for selling these papers damn near top-tick for a huge price, filling Hollinger Intl?s coffers at a critical corporate juncture.

FRAUD - Perks

1. The apartment is so easily explained that, once again, we US taxpayers should be seriously doubting the sincerity of the US Attorney in bringing this canard of an accusation. The details would bore Ben Stein, but suffice to say that, with full Board approval, Hollinger bought the Blacks a NY apartment which Black then, at his own expense, upgraded to the standards befitting someone who can pull off a robe like the one at the right of this blog. Hollinger was in fact obliged to fund these upgrades, and when Black then swapped apartments with Hollinger, he simply ?carried? those costs into the swap?s value. Was it in Hollinger?s best interest to spend $3M on an apartment and another $3M in upgrades? Probably not - but the Board approved, later reversing itself, and poor judgment is not illegal.

2. The New York birthday party for Barbara Amiel Black, held at the conclusion of the Hollinger Board meeting in New York clearly became a business affair. For that matter, Conrad?s whole existence was a business affair - Hollinger was Conrad and vice versa. The networking and prestige of throwing a party with such A-list celebrities of business and media - Kissinger, Jennings, Bloomberg, Barbara Walters (maybe even Jose Feliciano?) - could only augment the value of Hollinger. In fact, Black was generous to foot 1/3 the bill.

3. The private jet to Bora Bora is more problematic and Genson himself admitted some confusion on this point. For certain, the trip did not cost anywhere near the $600,000 the Feds allege. And Hollinger did not end up paying anyway, as the full cost was tacked onto Black?s income and he paid the concomitant taxes. We must wait to hear more explanations on this issue, though so far the evidence points to a serious mistake in judgment, but hardly anything rising to criminality.