A Speculation Concerning Corporate Governance

From the reports I have read, the current wave in corporate-governance prosecutions is cracking down on self-dealing. In the future, though, it seems almost inevitable that asset sales will be looked at more closely. This potentiality, if actualized, will mean that assets are going to be sequestered as accounting units.

Thanks to intrapreneurship, and its associated bookkeeping, this sequestration is going to be more straightforward than it looks. Intracompany loans have been used for capital allocation, and a "bid market" for capital is not unknown either. Since there already is a legal framework for wholly-owned subsidiaries, though, the more practicable way would be to go the intracompany equity route.

Corporations can be set up cheaply, and there's no strict prohibition against someone being a board member or officer of more than one corporation. More to the point, there is no obligation that a corporation have a chief executive officer; the head of one of those sub-corporations can be identified with a plain "general manager" title. Since any such subcorporation would be wholly owned by the parent, there would be no need to hold up the pretense of a CEO for it. The same goes for COO, CFO, CIO, CLO, Chief Purchasing Officer, CCO, CAO [not to be confused with Chief Administrative Officer] CNO, CDO, CTO, or any other chiefships that may come along in the future. All that's required is a head, a minimal board of directors, a treasurer and a corporate secretary. In addition, books are relatively easy to keep nowadays, and bookkeeping services can be provided by the parent corporation for a fee.

Of course, if the laws of incorporation are changed to require the appointment of a specified CEO to one, you know what's going to happen. The CEOship of a public company that avails itself of this technique is going to have a full job title something like:

We, ------ by the grace of God, Emperor and Autocrat of all the Russias, of Moscow, Kiev, Vladimir, Novgorod, Tsar of Kazan, Tsar of Astrakhan, Tsar of Poland, Tsar of Siberia, Tsar of Tauric Chersonesos, Tsar of Georgia, Lord of Pskov, and Grand Duke of Smolensk, Lithuania, Volhynia, Podolia, and Finland, Prince of Estonia, Livonia, Courland and Semigalia, Samogitia, Białystok, Karelia, Tver, Yugra, Perm, Vyatka, Bulgaria, and other territories; Lord and Grand Duke of Nizhni Novgorod, Ruler of Chernigov, Ryazan, Polotsk, Rostov, Yaroslavl, Beloozero, Udoria, Obdoria, Kondia, Vitebsk, Mstislavl, and all northern territories; Ruler of Iveria, Kartalinia, and the Kabardinian lands and Armenian territories - hereditary Ruler and Lord of the Circassians and Mountain Princes and others; Lord of Turkestan, Heir of Norway, Duke of Schleswig-Holstein, Stormarn, Dithmarschen, Oldenburg, and so forth, and so forth, and so forth."

Just imagine this translated into a corporate officer's title! [It's from Wikipedia.]

A Mark-To-Market Joke

The plant manager had presented some good news to the CEO this morning. Shareholders had been complaining about the performance of the stock, and the top boss needed something to mollify them. Hence, he was glad to let in the plant manager, normally someone who thought ill of his new regime of transparency, into the corner office on the 14th floor.

The news turned out to be good indeed. "Sir, I've managed to get a firm valuation on the plant." Then, he supplied the figure, which (the CEO was careful to check in his full and detailed list of accounts) was more than twice the value that the firm was obliged to keep on its books.

"Good!" the CEO replied, a little surprised. He saying so got his guard up, though. Transparency obligations being what they were, you couldn't be too careful these days.

"This valuation...is it a fair one?"

"Oh yeah," his plant manager okayed, "It's about as fair as you can get under current watch-dog standards. I checked around; it's a mark-to-market dealie."

Uh-oh. Now, the CEO's guard was really up. "You said 'mark to market'. I have to tell you that this is a delicate area, so the paperwork on it had better be as solid as can be."

"I know. The paperwork's so solid, you could bring it to court and count on it."

"To court?" Hopefulness is hard to conceal even by a CEO. "Is it that solid?"

"Yep, it certainly is. Any court action that's enforceable will have to use the figure I quoted to you as the basis for its action."

The guy was evidently telling the truth. When this honesty sunk in, the CEO looked as beatific as a typical CEO can be. "That's just wonderful!" There wouldn't be any shareholder querulousness with the marking up at all. Not to mention more serious measures being taken by the feds.

"Yep, and even better for it, the shareholders assented to the figure. They'll not only not cause trouble, they'll back it up all the way."

The look on his division manager's face popped the too good to be true warning flag in the top boss' mind. He looked at his subordinate very carefully.

"Are you completely sure about that? There's no way that this adjustment can wind up in...court, is there?"

Now his plant manager was looking even more wry. "Not unless we fail to follow through on the terms."

Terms? What was this referring to, a fairness opinion? Why wasn't I consulted about this?

"Is there some sort of ambiguity here that you haven't told me about?"

"No, none whatsoever, boss o'mine. The valuation results from a contract that a representative of the executive committee on the board signed, and the audit committe okayed with a 'yippee.' The board sold the plant right out from over us."

Media Roundup: Summaries And A Review

Week 5 of the Conrad Black trial is over, and the media reports are slowing down, even though the trial itself has gone into the Dickensian-sweatshop phase of sitting five days a week:

1. From the Chicago Tribune, an abridged Bloomberg report that starts off with an extended quote from Mr. Black himself.

2. Paul Waldie's latest report, webbed by the Globe and Mail, details how CanWest was "outfoxed" in the sale of Hollinger's Canadian properties. It ends with figures implying that the Aspers overpaid.

3. James Adams, also of the Globe, has an advance review of Conrad Black's latest book, the biography Invincible Quest: the Life of Richard Milhous Nixon.

4. The New York Post has its own abridgement of yesterday's Bloomberg report.

5. So does the Chicago Sun-Times, with some additional information from Mary Wisniewski.

6. The Guelph Mercury has a longer review of yesterday's testimony.

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Two entries from media blogs focus upon different aspects of the case. First of all, Peter Brieger of the "Black Board" has a profile on Edward Genson that ends with an organizational goof with respect to the last disc containing the questioning of Beth DeMerchant. Secondly, Mark Steyn notes that the chief defendant was spotted off the port bow during the same part of Csr. Genson's cross-examination mentioned by Mr. Brieger's later post.

Corporate Excitements and...Monty Python

One recurring complaint about the proceedings of the Conrad Black trial is how boring it's become. Ennui settling in has had little to do with the trial in and of itself, though; it's because the details that the prosecution is going through are, to many, really dull.

The business press has long faced this difficulty, so they have spiced up stories about dull business processes with exciting language, especially in the mergers and acquisitions field, although this practice really got its start in the stock reports.

Of all people, Monty Python picked up on this. A large part of the opener to The Meaning Of Life, the saga of the Crimson Permanent Assurance Corporation, is a poke at this practice through taking the purpled prose literally. You'll see this in, amongst other gags, the Crimson buccaneers' use of filing cabinets as cannon; the head of the Real Big Corp. pulling a short sword out of his briefcase; and, the skewering of the computer with the businessman's umbrella in the Very Big Corp.'s boardroom.

Believe it or not, this satire was released at the time that mergers, acqusitions and international takeovers were beginning to take off.

Friday's extended session

Paul Waldie was just interviewed on BNN (2: 25 PM EDT) with the latest on today's testimony, in a special hurry-up-the-trial Friday session. He reported that the final part of the testimony from Beth (Elizabeth) DeMerchant was heard. Prosecutors kept hammering away at their theme: the non-compete payments should have gone to the Hollinger International shareholders, and should not have been called bonuses to the board of directors. Ms. DeMerchant was very agreeable, Mr. Waldie related, but her testimony was "kind of a wash." He ended his interview with this forecast: once Richard Burt appears on the stand, the prosecution will push their case hard. He also reported that the trial will sit next Friday, too.

Romina Maurino has a report out, webbed by 680 News, in which she relates that prosecutor Eric Sussman, in redirect examination, implied that Hollinger Int'l agreed to disclose the individual non-compete payments associated with the sale to CanWest because they wanted financing, not because they had bad advice from Torys, LLP. "The company would have to disclose the payments whenever it needed to raise money, prosecutor Eric Sussman said, and knew that was the case because outside lawyer Beth DeMerchant had explained it to co-defendant Peter Atkinson."

Near its end, the report also discloses that Ms. DeMerchant did hear of Jack Boultbee receiving a non-compete payment, which she divulged under cross-examination. "'My notes indicate CNHI and American Trucker were mentioned," she said. "It's possible the other were too and I couldn't write fast enough.'" [An updated version of this same report says at the end that next week's testimony is expected to start off with Marilyn Stitt, a KPMG accountant and Hollinger Int'l's auditor.]

Mr. Waldie's write-up has been webbed by the Globe and Mail. In it, he reports that Csr. Sussman emphasized that the entire sum of the $80 million non-compete fees from the CanWest deal went to individuals, and that parent company Hollinger Inc. got none, even though it was supposed to receive a $4 million fee. He further reports that "[d]efence lawyers also pointed out that the payments were disclosed to shareholders in other company filings."

The report from Reuters' Andrew Stern begins with a profile of Mr. Burt, who is expected to take the stand Monday. After introducing Mr. Burt, the report summarizes the remainder of Ms. DeMerchant's testimony; it includes a redirect question, asked by Csr. Sussman: "'[s]hould the audit committee be told when executives are inserted into non-compete agreements without the request of the buyer (of the newspapers)?'" She answered "'[y]es.'" Also introduced in her testimony was the fact that the mangagement fees to Ravelston were lowered, at the request of Mr. Asper, "though the overall purchase price was raised and more was allocated to non-compete payments that benefited the executives."

Bloomberg's report, written by both Andrew Harris and Joe Schneider and webbed by the Chicago Tribune, begins with an interview with Conrad Black outside of the courtroom. He said, among other things, that "the sale was an 'outstanding' deal, that he had no reason to hide the noncompete payments attached to it and that he favored making them public.... Black characterized as 'rubbish' prosecution claims that the payments were improper." It also discloses that the lowering of the Ravelston management fee was elicited by Edward Genson's cross-examination; just before mentioning Ms. Stitt and Mr. Burt, it ends with a quote from Eddie Greenspan: "Greenspan said he was "not unhappy" with the progress of the case."

The Associated Press report has been webbed by the Belleville News-Democrat. It includes the reason that Peter Atkinson brought in Cravath, Swaine and Moore: to correct a mistake in the Torys work that Mr. Atkinson spotted.

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A Canadian Press report, webbed by AZCentral.com of Phoenix, compares the Conrad Black trial to the one of Robert Pickton, an accused mass murderer from B.C., in this aspect: both trials are long and complicated, and both received wide coverage when the trials opened. The coveraged faded, though, when each trial got down to the thicket of evidence. (It's a bit of an odd comparison; if anything, it shows either how sanitized the presentation of the evidence in the Pickton trial has been, or it evinces a certain fastidiousness in the Canadian media.)

[There's a newer one out, webbed by 940 News, in which Professor Alan Young explains why the trial of Conrad Black seems to have drawn more media attention than the trial of Robert Pickton has: even though murder is inherently more attention-drawing than even crooked corporate finance is, '[t]he Black trial is full of personalities, larger-than-life personalities'... 'The Pickton trial is about a marginalized community. There is no gripping narrative.'" Mark Jette, a former defense attorney from Vancouver, is quoted in the report as saying that grisly evidence introduced into the Pickton trial will change this relative dearth of media coverage, which Prof. Young concurs with.]

Also, as reported on BNN (2:45 PM EDT,) Congress has just passed a bill requiring a non-binding shareholders' vote on top executive pay levels for public companies. It has yet to reach the Senate. The bill also includes a non-binding vote on golden parachutes; details on it here.


A profile of Henry Kravis has been posted by The Independent, in which Conrad Black is mentioned in two paragraphs that briefly profile his current wife, Marie-Josée. (She was one of the three audit commitee members on the board of directors of Hollinger Int'l during the time when those suspicious transactions and perks were gotten.) Its theme is that the real man is quite different from the hard-charging, aggressive image of him.

Media Roundup: Thursday Admissions, Friday Tutorial

The overnight media reports on the Conrad Black trial not only include write-ups on yesterday's testimony, but also a report on a special session today:

1. The Hamilton Spectator has webbed a brief sumary of Paul Saunders' testimony, written by Romina Maurino.

2. From CANOE CNews, a CP report, which discloses that there will be testimony today from Hollinger Int'l's independent auditor, KPMG acountant Marilyn Stitt, after the rest of Beth DeMerchant's testimony is heard from. [There wasn't; Ms. Stitt was pushed back to Monday.]

3. Peter Brieger's latest write-up, posted in the Ottawa Citizen, focuses on Beth DeMerchant's testimony yesterday, as well as on Ms. DeMerchant herself. He mentions both her admission of mistakes and her salary for the year 2000, for which she provided a rough estimate after checking with her own counsel to see if it was "a fair question" for them to ask. She answered that it was somewhere between 600,000 and 900,000 Canadian dollars. "One U.S. journalist joked that the figure wasn't so large given that it was in Canadian funds." His report ends with similar vagueness in Csr. Saunders' testimony on his own. "Paul Saunders, a partner at the blue chip New York City-based Cravath, Swaine & Moore, when asked for his salary, explained there are 'clients' and there are 'matters,' and billing isn't as clear cut as the lay person thinks."

4. The Belleville News-Democrat has posted the AP summary of Csr. Saunders' testimony.

5. The first overnight report by Paul Waldie of the Globe and Mail recounts the testimony of both witnesses, and includes Ms. DeMerchant's acknowledgement of her mistakes when working on the CanWest deal. He also mentions the salary issue, and ends with a comment made by Michael Schachter after Csr. Saunders strugged to name his own rate: "'I guess if you have to ask, you can't afford it.'"

6. Rick Westhead's latest, webbed by the Toronto Star, centers on Csr. Saunders' testimony.

7. Mary Wisniewski of the Chicago Sun-Times also focuses upon Saunders' testimony in her own report. She mentions that Peter "Atkinson didn't tell Saunders about $15.6 million that he, Black, former CFO Jack Boultbee, and former Sun-Times publisher David Radler had received in individual 'non-compete' payments from the sale of U.S. newspapers in 2000 and 2001.

"'It would have been relevant,' said Saunders, a corporate litigation specialist..."

8. Another report by Mr. Waldie discusses a pre-testimony controversy, to be ruled on by Judge St. Eve later this morning, about how much Ms. Stitt can testify about the "auditing process, including how auditors go about detecting possible fraud." (She may use the word "hypothetical" in her ruling on this defense motion.)


Also, the Conrad Black trial is mentioned in passing by Michael Miner in his "Hot Type" column for the Chicago Reader; its main topic is the closure of the last American newspaper's bureau in Canada by the Washington Post. He uses the interest differential between Canadian and American media as a symbol for American news outlets' relative lack of interest in Canada. (For those not in the know, or not in the care, this topic is an old and reliable one for the Canadian media.)

The trial is also mentioned in the New York Times' "Deal Book" blog, through it relaying a comparison of Cantor Fitzgerald CEO Howard Lutnick to Conrad Black, made by hedge fund manager Robert Chapman. Mr. Chapman also compared Mr. Lutnick to Bernie Ebbers and Dennis Kozlowski.

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Douglas Ball, in yesterday's entry in the Toronto Life trial blog, works in both "Godwin's Law" and cognitive dissonance.

Mark Steyn has indulged in a little cognitive dissonance of his own as he tried to integrate what lawyer said what when and how each lawyers's 'what' meshes with the 'what' of the other whatters. Failing to do so, he turns to the amount of the feeing, which drives him to the verge of going native.

Four Curiosities

These trial-related items, of which two are on the vindication side, are not news reports, nor are they current, but they do show facets of either Conrad Black or the corporate-governance movement:

1. A repost of an early Mark Steyn blog entry that asks a question I've not seen a recent reference to, as of yet: those non-compete agreements were passed to the Federal Trade Commission, which okayed them. This fact may surface after the prosecution rests.

2. The Financial Times has a special Conrad Black in Depth webpage, for its occasional stories on the progress of the trial. Near the bottom is a column by Gideon Radman, entitled "Conrad Black and the Decline of the Anglosphere," and a cordial reply by Conrad Black himself.

3. A January 24th column by Liz Smith, entitled "THE LORD'S RIGHT," is a review of Tom Bower's book, Conrad & Lady Black. Ms. Smith's review ends with the only personal experience she has had socializing with him, and the anecdote itself ends with the paragraph just before the one that holds this final sentence: "It's a knockout recital of white-collar crime, stubborn blindness, and North Americans stupidly exhibiting outrageous droit de seigneur."

4. A critique of corporate-governance law by Alykhan Velshi, who sizes it up as politicized. He has four criticisms to offer: one, the push for "minority shareholder rights" seems to be a lobby effort by institutional investors, who took full litigative advantage until a glass ceiling was imposed upon "strike suits" by Congress; two, the zealotry surrounding it has ("yet again," I add laconically) resulted in criminalizing technical infractions and consigning the rule of proportionality to the flotsam pile; three, it has amplified the government's use of forefeiture to muscle defendants; and four, it has fomented a general landing-on of people who are both successful and flashy, at the hazard of sometimes draining the flashiness out of companies they control to the detriment of their value. A fascinating read, even though it is confined merely to the litigiousness in the movement, and does not encompass the corporate-governance movement as a whole.

Paul Saunders, In His Own Testimony

Paul Waldie of the Globe and Mail has a report on Paul Saunders' testimony, which centred around a phone call he had had with Peter Atkinson. "'I told him the company already was at risk of damages brought by shareholders,' Mr. Saunders testified. 'I said that the corporation may already be in breach of the law.'" (Note: this quote doesn't indicate which law Csr. Saunders was referring to.) Near the end, Mr. Waldie mentions cross-examination, in which Mr. Atkinson's defense lawyer Michael Schachter "pointed out that it was Mr. Atkinson who asked Cravath for guidance once the disclosure issue surfaced. Other defence lawyers have also noted that Mr. Atkinson did not mention the other payments because that was not the topic of the phone call." Csr. Schachter also brought up another possibly relevant point, quoted at the very end of the article.

(It seems that Csr. Schachter is veering towards deploying the same point that Roger Martin mentions in this blog entry, about the most in-demand lawyers having a "can-do" attitude for their clients.)

Romina Maurino has a report on this morning's testimony out, webbed by 680 News, which ties Csr. Saunders' testimony in with that of his colleague, William "Bud" Rogers. With regard to the relevance of proxy and SEC disclosures, Ms. Maurino notes that the "[p]rosecutors have tried to show that the company's failure to disclose the payments implies a pattern of concealment." [An updated report has been webbed by the Toronto Star, which relates that Mr. Atkinson accepted the point made by Csr. Saunders in that phone call. "While Atkinson [had] then asked what could be done to limit damages and how the payments could be disclosed, Saunders told lead prosecutor Eric Sussman, the lawyer didn't speak to anyone at Hollinger about the matter again."]

Mr. Waldie was interviewed on BNN, at about 2:20 PM ET. While being interviewed, he said that Csr. Saunders' role "was not very big" and he wasn't on the stand very long. According to Mr. Waldie, the lawyer's testimony was "very clear and precise." All three members of the Hollinger Int'l audit committee, Richard Burt, Marie-Josée Kravis and James R. Thompson, should be on the stand within "a couple of weeks" - and before David Radler.

Andrew Stern of Reuters has a report that includes testimony from Ms. DeMerchant that was elicited by cross-examination. She testified that the negotiations for the sale to CanWest proceeded up until almost the last minute; that both Mr. Black and Mr. Radler signed non-compete agreements with CanWest and that she expected both Mr. Atkinson and Jack Boultbee to do so; that Mr. Boultbee had saved Hollinger Int'l a "big amount," which defense attorney Gus Newman pegged at $400 million, in tax payments because of how he had structured the deal; and, in testimony given earlier, "that Black had inserted wording into a disclosure of the non-compete payments for Hollinger's board of directors that 'any reasonably knowledgeable shareholder' would recognize the CanWest sale had lifted Hollinger International's stock price." His report ends on a lighter note, mentioning an exchange between she and Ron Safer, Mark Kipnis' defense counsel. The defense also established that she had merely been somewhat ignorant of (presumably, the spirit of) the relevant U.S. disclosure laws, as set up by the Securities and Exchage Commission.

(She may also have been unaware of the fact that Conrad Black had signed a consent decree with the SEC in 1982, which the two lawyers from Cravath, Swaine and Moore would not have been.)

The Illinois Southern has webbed today's Associated Press report, which sums up the testimony of Csr. Saunders.

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If you thought that David Radler had shed himself of his legal troubles with his settlement and plea bargain, think again. Paul Waldie's latest article discloses Mr. Radler's latest legal woe: a motion for a modification to an expected order dismissing him as a defendant from a Sun-Times Media Group lawsuit against Conrad Black, him and (probably) the rest of the defendants; for all I know, it's all and sundry parties. The motion to modify was filed by none other than Ravelston Corp. - which is making sure that the decks are cleared for any lawsuit Ravelston files against him.

Media Roundup: All Over A Memo?

Despite the Conrad Black trial being, in the words of The Walrus magazine editor Ken Alexander, cocooned in a "yawn-inducing miasma of non-compete agreements," the stories posted overnight on it are increasing in number:

1. Rudolph Bush of the Chicago Tribune starts off his latest report with a mention of a memo, written in August of 2000, that was sent to Conrad Black himself. This memo is intended by the prosecution to show that Mr. Black was involved, knowingly, in the allegedly fraudulent non-compete agreements to both Peter Atkinson and Jack Boultbee. Mr. Bush also makes the point that "Atkinson's lawyer has argued the payments were intended as bonuses but were structured as non-competition payments for tax purposes." This defense isn't argued by Conrad Black's lawyers, as the prosecution is not alleging illegality of the Canwest non-compete payment to Mr. Black himself.

2. From the Toronto Star, Romina Maurino's latest report, which sums up the testimony under both direct and cross-examination, so far, by Beth DeMerchant.

3. The Niagara Gazette has a brief bio of Matthew B. Mock, a lawyer representing Mark Kipnis, in Don Glynn's column "A Line Or Two."

4. Legalbrief Forensic has a write-up that's available to subscribers only.

5. Peter Brieger, of the National Post, has a write-up that begins with: "A Toronto lawyer claims she was 'pressed' to say a pair of Hollinger International executives inserted themselves into a business deal so they'd get tax-free bonuses, which are at the centre of criminal charges laid against Conrad Black and a trio of his former colleagues." The pressure was applied to her by the special committee of Hollinger, Inc. in 2003, one headed up by Richard Breeden. [The National Post's version quotes some of her testimony at the end, including this bit: she "acknowledged her work on part of the CanWest file 'violated the most basic rule of tax law -- get[ting] help. I don't know tax law and I shouldn't have ventured into that area.'"]

6. From the Brandon Sun Online, a note that Paul Saunders, former counsel for Henry Kissinger, is expected to testify today, providing a break from Ms. DeMerchant's taped testimony.

7. Ms. DeMerchant's testimony is mentioned in the second-last item, comprising a single paragraph, in today's Boston Globe "Business In Brief" roundup.

8. Rick Westhead of the Toronto Star points to that same (fax) memo mentioned above, one sent August 9, 2000, as a possible smoking gun for the prosecution: "Who hatched the idea for Hollinger International Inc. senior executives Peter Atkinson and Jack Boultbee to receive $2 million payments from the landmark sale [to CanWest]?...A fax sent to Conrad Black by Atkinson...may help answer that vexing question, which is at the heart of criminal charges against Atkinson and Boultbee...."

9. Mary Wisniewski has two pieces webbed in today's Chicago Sun-Times. The first recounts the point, made in cross-examination of William "Bud" Rogers by Michael Schachter, that Csr. Rogers and his firm were not involved in the sale to CanWest until Mr. Atkinson asked him in. The second reports on Ms. DeMerchant testimony yesterday. It mentions that she disclosed that she thought the payments should be non-compete paments, not bonuses, while being examined by prosecutor Eric Sussman, and that she switched over to Csr. Rogers' advice about disclosing the payments "[a]fter reviewing U.S. securities law in April 2001." A sidebar in the latter report mentions that both Csr. Saunders and Ms. DeMerchant will both be heard from today, and that yesterday's testimony was "at times so tedious that U.S. District Judge Amy St. Eve and lawyers joked about needing coffee during an afternoon break."

10. Paul Waldie also has two reports, both webbed by the Globe and Mail. The first starts off by noting that the "[j]urors in the Conrad Black trial will get to see the first big-name witness in the case next week." The "big name" is Richard Burt, a member of the audit committee and a board member of Hollinger Int'l since 1994, when it was known as American Publishing. "According to court filings, Mr. Burt has alleged that one of the defendants, Peter Atkinson, admitted misleading the audit committee. The admission allegedly came in November of 2003, when Hollinger was conducting an internal review of the payments...." Mr. Waldie further reports, in his first piece, that Mr. Atkinson denied making that "admission." The second of today's write-ups focuses on Csr. Saunders, and his expected testimony today: it will be "about his role in raising concerns about non-competition payments that Lord Black and three other former executives of Hollinger International Inc. received in 2000. " At the end of his second report, Mr. Waldie mentions that the next two witnesses, after both Csr. Saunders and Ms. DeMerchant are finished, will be Hollinger auditor Marilyn Stitt and, of course, Richard Burt.

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Mark Steyn's latest entry in his trial blog ends with the opinion, "if I were Conrad, I’d lay off the Nazi cracks." The body of it contains an explanation of why the case is so mind-numbingly tedious: the prosecution is reaching for it. "This trial is like a bizarro version of Six Degrees Of Kevin Bacon: nary a witness seems to get within a hundred and six degrees of Conrad Black..." He also notes that the prosecution seems hung up on a "highly idiosyncratic corporate structure" - in other words, the unusuality of that structure makes Mr. Black's perhaps-normal business activities appear strange.

The technical difficulties mentioned by Mr. Stein were the focus of another entry in the "Black Board."

More broad in scope is the latest "Lexington" column in the Economist. The indictment of Conrad Black is mentioned as one of the elements of the neoconservative movement, as a whole, suffering "a grand exercise in public humiliation."

Wednesday Night Substitute: Anchoring

The Verdict is still concentrating on the Virginia Tech shooting, so there's nothing on the trial in today's episode. So, instead of a write-up on it, I present a brief item on a psychological bias called "anchoring."

Essentially, anchoring bias means people having a tendency to take first impressions for granted, and relating subsequent impressions to the first. It can also mean using a metric as a substitute first impression, and relating all other data to that metric. An example of the latter, if not the former, in everyday life would be judging someone's professionalism on the clothes they're wearing, including how neat they are.

We all have a built-in anchoring bias, because it helps in sizing up the unprecedented (that first impression) and serves as a useful thought-economizer in an orderly world. Interestingly enough, despite the linking of anchoring-ridden thought to prejudice or stereotyping, the law itself is permeated with anchoring through stare decisis, the rule of precedent, which refines it and thus makes the law itself reliable.

This phenomenon even relates to the trial, in one way. Back in 1982, before deciding to throw the law in any which way they could at Conrad Black, the top executives, as well as the board members, at Hanna Mines Inc., or Hanna Inc., relied upon a Goldman, Sachs report on him, which was derived mainly from then-largely-unfavorable press clippings from the Canadian media. (Siklos, Shades of Black, p. 81.) Through this clipping service, Conrad Black's persona was "anchored" in Hanna's top management and board of directors as a mere paper shuffler, with a fondness for overly complex interlocking corporations, who seemed to have an inclination for enriching himself and his minions at the expense of minority shareholders. (Newman, The Establishment Man, p. 250.) This is the way in which Conrad Black was anchored right around the beginning of December 1981, in the minds of the people who ran Hanna. Unfortunately for Mr. Black, his testimony at a 1982 injuction hearing in the Delaware Court of Chancery (recounted in this entry) was consistent with the anchoring of him. His testimony, which Vice-Chancellor Manos described as "strained and unpersuasive" Shades of Black, p. 89,) served as an anchor unto itself, which Mr. Black reinforced twenty-two years later in the same court. In the 2004 injuction case where Hollinger International sought a block of Mr. Black's attempt to change the corporate bylaws of the company, Vice-Chancellor Strine wrote, "On more debatable points I find Black evasive and unreliable." (Ibid, p. 431.)

Had Conrad Black tried to break into the American business Establishment as of 1979, the anchoring used to peg him, given Goldman, Sachs' methodology, would have been a lot more favorable to him.

The above isn't an attempt to deploy the fiddle for the benefit of Mr. Black; it merely is intended to illustrate the fact that anchoring is like the sword that so many live, and sometimes die, by. If there's any lesson to be learned from the above experiences, it would be this one: these days, if you get out of town, then what "the town" used to get you out will follow you to your next theatre of operations.

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Douglas Bell, in the Toronto Life trial blog, quotes from the opener of Vice-Chancellor Strine's decision in this entry, and ends it with "Sound familiar?"

Wednesday Testimony, Taped

Paul Waldie of the Globe and Mail reports that Beth DeMerchant testified that the Hollinger Inc. sale to CanWest was hurried because there were no other bids for the properties being sold, and "Hollinger International Inc." didn't want Izzy Asper to find out about that. She also testified that the non-compete payments were increased from $57 million to $80 million, just before the deal closed. "Much of that money went to Lord Black and his co-accused. Ms. DeMerchant said she did not know why the payments increased. She also said she was not aware until several weeks later that most of the money went to Lord Black and three other executives. "

[In a later BNN interview, Mr. Waldie disclosed that Ms. DeMerchant pointed out a "lot of inconsistencies" between the deal memos she read, the final deal terms, and what the board thought was in the deal. He said that, if this part of the testimony holds up under cross-examination, the prosecution will be a significant step closer to proving their case. He also noted that Paul Saunders, another lawyer from Cravath, Swaine and Moore, is due to testify tomorrow, and that Csr. Saunders was not only Henry Kissinger's lawyer, but also he had done some personal legal work for Conrad Black himself. BNN has webbed this interview, which aired at 1:50 PM ET; it'll be available on broadband until tomorrow morning.]

Romina Maurino has a report out too; it points out that Ms. DeMerchant was the one who had made the call on the non-compete payments not being disclosed, because they were not executive compensation in her judgment. She also explained why she shifted direction to Csr. Rogers' advice: the audit committee had referred to the payments as bonuses in their minutes. "DeMerchant said she called a meeting to discuss the payments after Boultbee said calling them 'bonuses' was wrong, because 'as far as he was concerned, they were not bonuses.'”

Bloomberg's report, written by Andrew Harris and Joe Schneider, is entitled "Ex-Hollinger Lawyer Tells Jurors Her Firm Gave Bad Legal Advice." From it: "DeMerchant said another lawyer in her Toronto firm was wrong when he said the payments didn't need to be disclosed." The Associated Press report is also out, as webbed by the Ilinois Journal-Gazette Times Courier. It's also been webbed by the Daily Southtown.

An updated report from Ms. Maurino, webbed by 680 News, names the name of the other lawyer; it was Csr. Sukonick. It also discloses that she realized that "'the ball had been dropped'" after hearing from Cravath, Swaine and Moore. Near the end, it quotes from a memo from Peter Atkinson to Conrad Black, from which, Ms. DeMerchant testified, she first learned about the individual payments. That quote ends with "'We have put a higher weighting on the restrictive covenants due to our hope that these payments can be free of tax'". A little after that quote, the report mentions that Ms. DeMerchant "also backtracked on a previous statement about Atkinson and Boultbee adding their own names to the non-competes, saying she had been misunderstood when questioned by a special committee investigating the fees." [This last statement was elicited under cross-examination.]

Reuters' report has also been webbed; it's by Andrew Stern. He relates that Jack Boultbee was "shocked" when he had heard that the non-compete payments to Conrad Black, David Radler, Mr. Atkinson and himself were categorized as "bonuses." Furthermore, when he had heard that the non-compete to Ravelston was pegged as an early break-up fee, "DeMerchant testified, Boultbee had said: '"Where on earth did this come from?"'" She also testified that she preferred to explain the inconsistencies as "'errors'" to the board, rather than as "'inadvertent mistakes.'"


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Mark Steyn, in his latest blog entry, actually has some good things to say about William "Bud" Rogers as a prosecution witness.

Over at Toronto Life's trial blog, Roger Martin has some good things to say about Darren Sukonick, with whom Mr. Martin has worked with in the past: "I know Sukonick because he did a securities deal for a company of which I am chairman. The press descriptions of him are pretty much accurate: he is smart, hard-working, intense and ambitious. Having worked with him, I can’t help but feel considerable sympathy for him." The rest of his post deals with the doleful fact that "can-do" service professionals are in greatest demand by companies; consequently, the corporate governance movement depends most upon whistle-blowing at the time when a company's top management is most likely to seek out an accomodator. The term that Dr. Martin uses is "adverse selection."

Lest you think that today is Compliment Day, Rick Westhead of the Toronto Star has passed along two less-than-complimentary quotes, said by Conrad Black to Mr. Westhead himself: "'I’m not talking to you anymore,' Conrad Black said to me during one break in the proceedings at his fraud trial. 'You're too friendly with the prosecution.'... Black reiterated his observation after I invited him for dinner. 'I'm not having dinner with you so long as you are so friendly with (prosecutors). The sight of people being civil with those Nazis is sickening.'"

Media Roundup: He Opened Their Eyes

The overnight media reports on yesterday's testimony in the Conrad Black trial focused almost exclusively on the testimony of William "Bud" Rogers, as he proved to be the only witness capable of discussing the technical details of the non-compete payments at the heart of the trial in such a way that the jurors' interest was held.

1. From the Chicago Tribune, a brief summary of the testimony of Csr. Rogers.

2. The Ottawa Citizen has webbed Peter Brieger's latest report, which notes that Csr. Rogers may have been the most popular witness in the courtroom so far. The defense tried to undercut Csr. Roger's testimony under direct examination in this manner: "Between the battling law firms were Kipnis, a real estate lawyer before he joined Hollinger, and Atkinson, a Canadian lawyer with almost no knowledge of U.S. securities law, the defence argued."

3. The New York Times also has a brief summary of Csr. Rogers' testimony.

4. From 570 News, a note that today's testimony will be from Beth DeMerchant, and it will be from a tape.

5. Paul Waldie of the Globe and Mail begins his first report with the 'possessed cell phone' incident and then covers the testimony of Csr. Rogers. "Mr. Rogers proved to be a sharp witness for the prosecution. He explained complicated business terms better than any other witness so far and many jurors took extensive notes as he spoke." The report also implies that the prosecution's disclosure detour is, presumably, proof that the defendants "lied to shareholders about their actions." Mr. Waldie concludes that Csr. Rogers did all right as a prosecution witness, on his own. (Many of the previous witnesses for the prosecution haven't.)

6. Mr. Waldie's second report of the day centres on Beth DeMerchant, the second lawyer from Torys LLP to testify. (She's now retired.) Her testimony so far, a half-hour's worth of direct from yesterday, has been guarded.

7. Rick Westhead of the Toronto Star reports that the heart of Csr. Rogers' testimony was the lack of disclosures of the non-compete payments to individuals that resulted from the CanWest purchase of Hollinger Int'l assets. This included lack of written disclosure of them to the board: "While the audit committee was told that non-compete payments were included as a part of each sale, Cramer pointed out the document failed to disclose that any company executives would personally receive money."

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Peter Brieger has another write-up, posted on the "Black Board," which relays two verbal gaffes made during cross-examination yesterday by two different defense counsels. He ends by offering congratulations to Csr. Rogers "for his modesty."

The Verdict's Still Concentrating On The Massacre

Because of the public impact of the Virginia Tech massacre, tonight's entire episode of The Verdict was devoted to it, just as last night's was. Instead of a write-up, I present some interesting opinions from various blogs:

1. Larry E. Ribstein, at "Ideoblog" has a discussion of the same article commented on earlier by Toronto Life blogger Douglas Bell: "Free Agents" by James Surowiecki. It discusses the line between simple, if sometimes deplorable, costs of using agency and criminal fraud. He concludes that the best line to draw between criminal fraud and those costs is the tried-and-true standard of mens rea. (Mr. Surowiecki's article has also been webbed by the Free Market News.)

2. "Yank In London" relays the news that Conrad Black's appeal to keep Ravelston's compensation private had been denied by an Ontario court, with this parting shot added: "Too bad Blackie!"

3. "21st Century Vision" has posted an article by Jackie Ashley of the Guardian, in which she pegs Mr. Black as being under the sway of "displacement." She put "Scooter" Libby in the same category too.

4. Finally, Steve Skurka's The Crime Sheet has a thoughtful report on the trial's progress, which includes speculation about whether or not the prosecution will undertake witness culling. Csr. Skurka is presently watching the trial in the courtroom.

Tuesday Disclosures

The Edmonton Sun has a report on today's testimony so far, starting off with a fact unearthed during cross-examination of William Rogers by Peter Atkinson's lawyer, Michael Schachter: Csr. Rogers was asked in by Mr Atkinson, to deliver a second opinion on the disclosure advice given earlier by Torys LLP. (This report has also been webbed by 1130 News.)

[An updated version of the same report, also written by Romina Maurino, has more details on the day's events; it includes a humourous anecdote about Ron Safer's trouble with a recalcitrant easel. It also mentions that non-compete agreements are being challenged in court as of now, although she doesn't mention whether or not these challenges are civil lawsuits.

[The latest updated version of that same report relays the first thirty minutes of Beth DeMerchant's testimony. Ms. DeMerchant testified that both Mr. Atkinson and Jack Boultbee were '"sophisticated clients' and 'savvy people' who quickly understood corporate deals." In particular, Mr. Atkinson struck her as a quick learner of complex points; she assessed Mr. Boultbee as a master negotiator. The report also includes the fact that she agreed to testify as part of a settlement agreement between Torys and Hollinger Int'l, so the direct examination may be a little less chummy than the others were, with the possible exception of Darren Sukonick's.]

Paul Waldie's report starts off with an anecdote about defense counsel Patrick Tuite' errant cell phone. On a later BNN interview, aired at approx. 1:55 PM ET, he mentioned that Csr. Rogers is "key" to the prosecution's case, because he objected to the non-disclosure of the individual non-compete agreements. He's also an important cross-examination witness for the defense, because Torys was Hollinger Int'l counsel, not the firm that Csr. Rogers is with. This part of the trial may seem like a byway, because none of the defendants are charged with any securities violations.

Bloomberg's Joe Schneider and Andrew Harris include, in their own report, that Mr. Atkinson had written Csr. Rogers a thank-you letter for "'agreeing to advise on 10Q and related items,'... in an e-mail May 11, 2001, four days before the company's quarterly financial statement, or 10Q, had to be submitted to the U.S. regulators."

Reuters' report, written by Andrew Stern, centres on what seems an off-the-cuff speech by Eric Sussman, spoken while the jury had been sent out of the courtroom, which sounds like a warm-up for his closing argument. (The context of the "exchange" with Peter Atkinson's lawyers, though not explicitly identified as such, seems to have been prompted by a motion to dismiss the charges against Mr. Atkinson, or something akin to it.)

WQAD.com of Moline, Illinois has an abridged summary-report from the Associated Press. A more detailed AP report has been webbed by the Belleville News-Democrat; it links the first part of Ms. DeMerchant's testimony to the prosecution's attempt to show that both Mr. Atkinson and Mr. Kipnis weren't exactly taken advantage of during the time when the suspicious transactions were put together. (This linking seems to be part of an overall prosecutors' theory that the four defendants plus David Radler were the dupers, that the directors testifying for the prosecution were the only dupees, and that Mr. Kipnis and Mr. Boultbee were both too smart, knowledgable and quick-thinking to be fooled by Mr. Radler.)

United Press is also on the story now; a short summary of this day's events, which reports that a "war of words" got two counsels in Judge St. Eve's chambers, has been webbed by Monsters and Critics. It didn't indicate that this chambers conference was the "exchange" referred to in the Reuter's report linked to above.

(If it were, then Csr. Sussman was practicing a kind of closing address on the Reuters reporter.)

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Another defense counsel, Michael Schachter, gets a tip of the hat from Peter Brieger at the "Black Board" for a zinger he came up with during his cross-examination of Darren Sukonick.

Media Roundup: Clash of the Advisors

The reports on the Conrad Black trial, which have been posted overnight, all zeroed in on the clash between one lawyer's advice and another's:

1. From the Hamilton Spectator, in the "Business Briefs" section, a recap of yesterday's testimony in the second-last item. Mentions that William "Bud" Rogers testified that he never really dealt with either Conrad Black or David Radler.

2. Canadian Business has webbed a forecast that cross-examination of Csr. Rogers will commence today, and another Cravath, Swaine and Moore lawyer, Paul Saunders, will testify later this week.

3. From Peter Brieger and webbed by the Ottawa Citizen, an article that focuses upon the objections that Csr. Rogers had made to Darren Sukonick's disclosure advice. It also notes that the Hollinger Int'l executives he talked to had docilely went along with his opinion, but Beth DeMerchant, Csr. Sukonick's then-boss, defended the interpretation of her then-underling. The Regina Leader-Post has a slightly modified version of this report, which omits Csr. De Merchant and adds that Csr. Rogers had reacted to a memo written by Csr. Sukonick on Apr. 19, 2001. The latter report, posted more recently, also contains a quote from Csr. Rogers' objection letter, sent to Peter Atkinson and Jack Boultbee. That quotation ends with: "'Mr. Sukonick did not copy us on the e-mail... We were not at all aware cash payments were made to individual executives and Ravelston.'"

4. The same theme has been taken up by the Globe and Mail's Paul Waldie. His report notes that Csr. Rogers felt misunderstood when he learned that "Mr. Sukonick had also suggested that Mr. Rogers agreed with Torys conclusion." He objected to Torys' line of reasoning on the basis of his more cautious, perhaps less cavalier, interpretation of U.S. securities legislation. Mr. Waldie also notes that "one of the lawyers who worked with Mr. Rogers said he found the payments 'weird' and added that they looked like a 'trick' to get money to executives."

5. This morning's report from Rick Westhead of the Toronto Star opens with a recount of the objections defense lawyers made about Jeffrey Cramer's questioning. It also mentions that Csr. Rogers testified that both Mr. Atkinson and Mr. Boultbee had led him to believe that CanWest had insisted that the individual non-competes be signed as part of the deal. "That was not the case, the jury has heard."

6. Janet Whitman of the New York Post is back on the trial beat, with a write-up on Conrad Black's opening remarks from made yesterday morning.

7. The Chicago Sun-Times' Mary Wisniewski continues her own coverage of the trial, which ends with a note that the "bickering" between defense and prosecution counselors is verging on the personal.

8. In another article, Mr. Waldie of the Globe points out that the Park Avenue apartment that Mr. Black bought from Hollinger International, which is mentioned in Count 10 of the indictment, is now being introduced into evidence by the prosecution.

The Verdict Discusses A Topic More Fundamental

For a reason that you've probably guessed already, The Verdict focused upon a single topic tonight, one far removed from the Conrad Black trial.


A recent entry in Toronto Life's trial blog, by Douglas Bell, tries to bring a sense of perspective to the recent woes of the prosecution, and the gleeful coverage of Mark Steyn, Peter Worthington, et. al., by noting that the witnesses who have not been all that credible were called merely to lay a foundation for David Radler's own testimony. Ironically, Mr. Bell's entry was posted on the same day that a poll (there since the trial began) that asks "Based on today's evidence, I think Conrad Black is: Guilty/NotGuilty," showed, for the first time I've seen there, a solid majority for "Not Guilty." Normally for this blog's poll, "Guilty" secures a daily majority. (The poll can be found on the blog's index page.)

(Mr. Steyn's latest post is gleeful indeed, mostly at the expense of "Vitally Important Paperwork." Agree with him or not, it's interestingly populist.)

Monday At The Trial

570 News has webbed a story by Romina Maurino, with opening quotes from Conrad Black: "Conrad Black says his confidence that the U.S. government has no case against him remains unshaken and he does not understand 'what any of us are doing here,... I've always said they had no case and nothing has changed,' Black told The Canadian Press on Monday as he headed into a Chicago court with his daughter Alana Black for the beginning of his trial's fifth week." The rest of the report adds details, and background. [Editor and Publisher has an excerpt of it here.]

Paul Waldie, of the Globe and Mail, has reported that the cross-examination of Darryl Sukonick is getting exciting, thanks to some questions asked by Peter Atkinson's lawyer, Michael Schachter. Csr. Sukonick stuck to his earlier testimony through them. Mr. Waldie's report ends with: "Under a final round of questioning, prosecutor Julie Ruder indicated that [other defendant Jack] Boultbee had not read a non-compete agreement in another Hollinger deal that included him and that he did not even know who the agreement was with."

On a BNN interview, aired at about 1:55 PM ET, Mr. Waldie added that the Sukonick videotape ended this morning. He added that a lot of the testimony on the videotape is losing the jurors' attention, but some are writing copious notes, and concluded that he was "reasonably impressed" with the attention paid by them to the tape, all things considered."

Reuters has a report of its own, written by Andrew Stern, which has one of the questions that Csr. Schachter asked of Csr. Sukonick regarding his refusal to leave Canada to testify, after the jurisdiction issue was made clear: "'You did not want to be the next honest lawyer to be charged with a crime for doing something absolutely legal, did you?'." Near the top of page 2, it relays the corresponding redirect question: "prosecutor Judy Ruder asked Sukonick if he would have risked his law license to provide phony documentation for the payments... 'No, of course not,' he replied. "I would never do anything like that.'"

Bloomberg's report, written by Andrew Harris and Joe Schneider, is webbed too. It mentions that the non-compete agreements at the heart of the trial were designed to be enforceable contracts, and not 'wash agreements' that were merely bonuses in disguise. It adds an item about Csr. Sukonick himself: "Sukonick said that at his own request, he is not currently dealing directly with any of the firm's clients."

The updated version of the same report has details on the testimony of the next witness, William "Bud'' Rogers, a lawyer with Cravath, Swaine and Moore. On direct examination, Csr. Rogers testified that he was convinced that Csr. Sukonick has given bad advice to Hollinger International: "'I was shocked to hear'" what Sukonick had advised, he said. The report also mentions that Csr. Rogers was involoved in a refinancing that Hollinger Int'l was pursuing, a point that is bound to come up during cross-examination.

Ms. Maurino's report has been updated too. It re-caps Csr. Sukonick's testimony, with an evaluation that he wasn't that effective as a prosecution witness. It also mentions that the jury became more attentive when Csr. Rogers took the stand, and that he appeared "friendly and confident" when prosecutor Jeffrey Cramer began questioning him. "Rogers became involved with [Hollinger] International when Atkinson hired him to deal with the sale of American Trucker, a free periodical available at U.S. truck and rest stops, to Primedia Inc."

The Belleville Times-Democrat has webbed the Associated Press wrap-up of today's testimony, which covers all of it. The testimony of Csr. Rogers is reported in some detail: he testified that disclosure of the non-compete payments was obligatory, and that failing to do so would put the company at risk of a being liable for a civil judgment in its shareholders' favour. "'Those payments were required to be disclosed,' he added, saying he told Kipnis that 'this (disclosing the non-competes) is not a close call.'"

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A trivia item: Argus Corp, the holding company that Conrad Black took over in 1978, still has preferred shares trading on the Toronto Stock Exchange. Yahoo! Finance Canada has pages on all three of them: the Argus Corp. Ltd. Class "A" $2.50 preferred, the Argus Class "A" $2.60 preferred, and the Class "B" preferred.

On those listings, all of the three have "N/A" in the dividend-and-yield box...not good for preferred shares, whose value primarily comes from the their dividends.

Media Roundup: Furrowed Brains

As week five of the Conrad Black trial is about to begin, three stories on where the trial's turning have been webbed overnight, as well as a critical look at one of the agencies currently after Mr. Black and a few others, the Ontario Securities Commission:

1. From the Hamilton Spectator's "Business Briefs," an observation that the prosecutors may be close to throwing the trial through boring the jury.

2. 1130 News has webbed a 170-or-so word forecast giving signposts showing who to expect on the stand this week: the end of Darryl Sukonick's cross-examination, William (Bud) Rogers, Paul Saunders, and pre-recorded testimony from Beth De Merchant. The last was videotaped in lieu of her packing her bags and testifying in Chicago, as was the case with Csr. Sukonick.

3. The OSC, an agency that is also pursuing action against Mr. Black, at the civil level, is the subject of a critical look at its workings, as webbed by Investment News.

4. The Chicago Tribune's "Top 5" business stories to watch this week has the trial in spot 4; it notes that the man to watch for is Csr. Saunders, Henry Kissinger's former lawyer.


Also: an article in the New Yorker discusses whether or not the "war on white-collar crime" should be regarded with the skepticism, if not the cynicism, of the war-weary.

The Verdict: Re-Visit Of Bora Bora

Tonight's episode of The Verdict was, as customary for Sundays, a re-cap issue. This week, the segment on the Bora Bora trip was highlighted: you'll find a write-up on it here.

As is also customary, this episode of The Verdict should be available in broadband as of 11:30 PM or so, until it is replaced by the next one.

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Here's a trivia item with regard to the 1986 Dominion Stores pension scandal, brought up by Sid Ryan in his March 24th column. As noted near the bottom of this entry, Mr. Black had gotten in serious trouble, with respect to the civil law, for treating the Dominion Stores employees' pension fund as a "pay as you go" system by withdrawing a surplus from it. This withdrawal was part of legal, and not that abnormal, business practice at the time in Ontario (but not shortly thereafter.) Six years beforehand, according to this quote from Peter C. Newman's The Establishment Man, p. 163:

When [Financial Times reporter Deborah McGregor] asked about a rumour that [then-]Argus-owned Dominion stores was about to sell off its Quebec stores and funnel the proceeds into cash-starved Massey [as it was back in 1980], Black shot back, "That's absolute horseshit. It's hysterical to suggest that we would steal money from Dominion and hurl it at Massey."

Words that came back to haunt? It's hard to say. At the time he issued that quote, Mr. Black was lobbying for a government bailout of Massey-Ferguson, with Argus also kicking in some cash provided that the bailout was effected by the federal government.

Media Roundup: Just A Paper Sum

There's only two stories on the Conrad Black trial from overnight and today:

1. Peter Worthington's latest column, which starts off by discussing the frequent use of plea bargains. Mr. Worthington then recounts that Mr. Black "has adamantly and angrily rejected a seven-year plea bargain sentence, and preferred to risk 101 years in jail if found guilty by a Chicago jury." He concludes that the only way Conrad Black will get jail is if he has been found to lie.

2. Another regular writer on the trial, Romina Maurino, starts off with the wall-of-boredom theme, which may lead to Conrad Black walking in a technical snooze-off. Introduction of travels to another land only seem to humanize Mr. Black to the jury. He's already "musing before one session last week that prosecutors have yet to show they have a case." Ms. Maurino's write-up ends with a plausible fallback strategy for the prosecution: hoping that the enormity of the case will put the jurors in the state of mind for deciding that Conrad Black must be culpable of something.


Also, Mark Steyn's latest blog post tells of a prosecutor who tries, but misunderstands what a genuine crime is. Peter Brieger's earlier suggestion that the Blacks would have had a relatively better time in Wasaga Beach adds a harmony to the aftermath of the Bora Bora frenzy, and Toronto Life's Alan Gold speculates on the real reason why the two Torys lawyers who were absolutely taped in Toronto preferred their testimony to be edited through videotape.

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J. Richard Finlay has posted a rebuttal to an earlier Toronto Life blog posting by Roger Martin in his own blog, "Finlay ON Governance." In it, Mr. Finlay argues that Mr. Martin's claim, that current corporate-governance advocates should have their own conduct examined, comes close to advocating criminalization of soon-to-be-normal business practice.