Review of The Establishment Man (1982)

Peter C. Newman’s book, The Establishment Man, is only somewhat of a period piece. It has more detail on how Conrad Black ticks than the others I’ve read, and is still an authoritative addition to the bibliography of any recent one. Even if it carries the implication that Conrad Black had met his destiny by taking over Hollinger, with a friends'-consensus forecast that he would pursue the Canadian Prime Ministership, its depth still carries to the present.

One anecdote that stuck in my mind was the story of how Conrad’s father, George Black, had gotten himself marked down as a deserter. After donning a Royal Canadian Air Force uniform for the Canadian war effort, he was told by Walter Macdonald that he was more valuable to it as his assistant, a civilian position. He went with Mr. Macdonald instead of to basic training. After six months’ work later, he found out that he had been listed as having deserted. (p. 22)

The picture portrayed of Conrad Black in this biography is the second son, of a businessman known as a mental whiz for prodigious feats of arithmetical calculation, who was trained to be a whiz himself, only with words and facts. His elder brother, Monte, was pushed into financial-statement interpretation. Young Conrad was something of a rebel, but found himself through buying a small Quebec newspaper, the Knowlton (later, the Eastern Townships) Advertiser, which his partner, Peter White, had gotten for a dollar. He made it profitable; this turnaround was a trial run for his more known takeover and turnaround of the Sherbrooke Record, his first Sterling paper. It was Peter White who had introduced him to F. David Radler, his partner until recently.

Sterling Newspapers had grown like a rocket, under his and Mr. Radler’s management. Like his dad with Canadian Breweries, Conrad Black proved to be able to grow a business, with a less than sixty-hour work week for the head honcho. Mr. Newman mentions that famous pro-LBJ editorial, as well as the interview with Nguyen Van Thieu, which was picked up by the New York Times and some European press services. Also recounted are the controversies Conrad Black found himself in as a political figure and writer, including the one surrounding his Duplessis book, Render Unto Caesar : The Life And Legacy Of Maurice Duplessis (titled, simply, Duplessis when first issued in 1977.)

The centerpiece of the book, though, is devoted to Conrad Black’s takeover of Argus Corporation, after its previous head, Bud McDougald, had died. Argus was a dividend stock, and its top management characteristically showed an indifference to the price of its shares: if the price dropped, then all that signified was it becoming a better bargain because the current yield rose. The prime responsibility of Argus' top management was to keep the dividend safe. (An American may find it odd that the head of such a company would be such a colourful Torontonian, as Mr. Macdougald was, but a Briton would understand.) This policy, though, did lead to one of Argus’ holdings, Massey-Ferguson, descending into serious trouble in the 1970s, because it had been treated as Argus’ cash cow for too long. Newman’s recounting of the takeover itself is sufficiently detailed to include not only descriptions of all the players involved, but also some revealing side anecdotes. One of them featured then-Black ally Nelson Davis, after he was called a “double-crossing rat” by Mr. McDougald’s widow when speaking to his wife, threatening a $100 million defamation suit, which he never followed through upon (p. 134.) The book does reveal a “duels with writs” custom in the Toronto business Establishment back then. Conrad Black, of course, was one of them.

The rest of the book is devoted to Mr. Black’s moves while heading up Argus, including details of his notorious asset shuffles. It also discusses the legal troubles he encountered while making a run at the American company, Hanna Inc., which climaxed with the revelation of that notorious Norcen director’s resolution. It said that Norcen "ultimately" aimed to take Hanna over, which, according to the judgement, belied its SEC filing made two months later. The latter had said that Norcen's increase of its holdings in Hanna to 8.8 % was made "for investment purposes." Newman notes that Black laughed off the “racketeering” language in the Hanna-instigated legal action against him (an injunction blocking Norcen from buying more Hanna shares) when it was over, one that seemed unusual for the stridency of the language from Hanna in it; Hanna won its case. Mr. Black later signed an SEC consent decree, but there’s a hint that he regarded it as a kind of payoff, and that he still believed that he had gotten in trouble for doing nothing more than seizing an opportunity when the opportune moment fortuitously had arrived. (Other people have, of course, interpreted the word "ultimate" differently.) Despite one of Argus' asset shuffles raising the stock price after its announcement, Mr. Newman mentions a contemporaneous suspicion that Mr. Black’s conduct showed that he considered the smaller shareholders of the companies he controlled to be merely along for the ride. He also mentions the early-1982 criminal investigation of Black and Argus in the chapter that recounts the Hanna takeover attempt.

The Establishment Man will be an absorbing book for anyone who wants to see what business and social milieu Conrad Black rose out of. Unlike the more recent biographies of Mr. Black, Mr. Newman credits him with keeping a firm, if not often visible, hand on the companies he ran. No wonder the same man declared, shortly after the trial began, that he thought Conrad Black was guilty.