Vice-Chancellor Leo G. Strine's opinion regarding takeovers were featured in a recent Globe and Mail article, by Jacquie McNish, dealing with the impending takeover of BCE Inc. Vice-Chancellor Strine is of the opinion, officially, that a company's board of directors need to take charge of any sale of the company itself. A separate article contains quotes from V-C Strine's decisions, including one from the Feb. 26, 2004 decision for the Hollinger International v. Black case. (You can try looking for it in this list of decisions, by selecting "2004" from the drop-down menu on the top left of the case list and finding the decision by its date.)
Legally, the decision is set in stone. Even though the revelation of KPMG documents that disclosed the individual non-compete agreements and the largely ruinous cross-examination of both Marie-Josée Kravis and former Gov. Thompson are now known, that decision against Conrad Black still stands. Vice-Chancellor Strine covered his bases thoroughly enough for his decision not to be impugned, even in the Monday-morning-quarterback circuit. In fact, there's a hint on p. 65 of the PDF file of the decision (p. 61 of the decision itself) that V-C Strine was unsure whether or not the documentation for the individual non-compete agreements, which neither the Special Committee nor Mr. Black's legal team could find at the time of the associated trial, did in fact exist.
What's interesting about the decision, to a non-lawyer, is found in the factual background to the case. Evidently, by that time, Conrad Black had felt that he had been snubbed, as both a "mere CEO" and as a "mere shareholder, no better than the rest." His actions are consistent both with those belittlings and the conviction that the board of directors had breached the Strategic Process agreement first.
It's almost certain that the 'breach' that set him off is described in p. 35 of the PDF file of the decision (p. 31 of the decision itself): "Among other things, the [Hollinger] Inc. audit committee recommended that Black, Radler, and Boultbee immediately resign from their management positions at Inc., and that Atkinson, Boultbee, and Radler resign from Inc.‘s board of directors." Those resignations were not required as part of the "Restructuring Proposal," an integral part of the "Strategic Process," agreed to by Mr. Black and the board of Hollinger International. That Proposal required resignations from Peter Atkinson, David Radler, Jack Boultbee, and Mark Kipnis from their Hollinger Int'l executive postions, but not for them to resign from anywhere else.
This later revolt being the trigger that set Mr. Black off is consistent with his insistence, ever since 1982, that there was some sort of conspiracy afoot to defame him when Norcen was investigated by the police for producing a "forgery" that was actually an offer to buy back 4.99% of its stock. (This part of Conrad Black's life is detailed in Shades of Black by Richard Siklos, pp. 90-98.) Even though I myself an a Torontonian, and have lots of respect for the Toronto police force, I find it hard to justify why a good-faith written offer by a company to buy back its own shares would constitute any kind of fraudulent document, let alone a "forgery." If an out-of-towner, especially one from Wall Street, questioned me about that, I would probably show a little embarrassment.
It could certainly be concluded that Mr. Black positing a conspiracy afoot back then was unreasonable, but the quite bizarre nature of the forgery charge, which was predicated upon the assumption that Norcen would follow through on its offer, euchres out any credible psychoanalyzing of the man at that time. It is a matter of record, though, that Mr. Black does think in terms of conspiracies when things go wrong for him in series. So, this proneness is, at least plausibly, sufficient to explain why the Hollinger Inc. directors' revolt would have been pegged by him as a long-distance aggressive attack from his foes at Hollinger Int'l, which would have prompted him to treat his consent to respect and go along with the "Strategic Process" as voided by the opposite party. Of course, he couldn't say it in court, as there was no evidence of any conspiracy beyond a surmise from he himself, so he tried to use what he could claim was court-worthy: the allegation that he was "fraudulently induced" to agree to the Strategic Process. That argument, of course, was shot down by V-C Strine. (p. 75-87 of PDF, pp. 71-83 of the decision itself.)
Beyond the "going animal" element, it's clear, in retrospect, that Conrad Black thought he could do a better job as sole vendor-agent of the Telegraph than the board could, and that as a negotiator, he habitually uses secrecy to advantage. Thanks to earlier testimony in the current trial which disclosed that Mr. Black got the better of the Aspers, alone, the supposed underhandedness in he going it alone looks less vindictive than it did back in '04, even if the low price agreed to between he and the Barclay brothers does appear to like it contained an element of vindictiveness. (If none, then Lazard's range estimate for Hollinger Intl'l value was too high.)
As far as Mr. Black's credibility in the Delaware Chacery Court is concerned, though, the third paragraph of Page 27 of the PDF (p. 21 of the decision) says it all: "Simultaneously, Black did what he had previously and adamantly refused to do: HE REACHED OUT TO THE BARCLAYS." Put in full context, Conrad Black breached a contract. How seriously Vice-Chancellor Strine took this is indicated by the fact that he used all caps, which is unusual for him.
I note in closing that in order for Conrad Black's positing of conspiracies to be plausible, they would have to be conspiracies of snitches, of the kind who think it's okay to run to the law to settle a score.
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Richard J. Finlay, in "Finlay ON Governance," has some informed comments about the Globe article by Jacquie McNish linked to at the top of this entry. Chief among them is his note that V-C Strine's point of view has been standard Chancery Court Policy for about twenty years at the minimum.
Saturday, May 5, 2007
Media Roundup: Fair Range
Only one story on the Conrad Black trial was webbed overnight, and it's by Mary Vallis. She describes the defense's motion to have David Radler's testimony circumscribed, in order to eliminate all "speculation and surmise" from it. Since the trial is coming down to his word against the defendants', the motion argued, "it would be unfair to allow Radler to offer speculation and surmise on so central, and possibly determinative, an issue in the case."
(This motion is going to be a tricky one to follow; only a lawyer with relevant learning/experience will be able to make sense of the decision process for it. Non-lawyers like me have to wait for the outcome. According to Part II of the evidentiary proffer in this case, conspiracy-related charges do allow testimony, from witnesses who have turned state's evidence, that would normally be struck out of the record as hearsay in a more straightforward criminal trial. The precedents cited in it are almost all recent, suggesting strongly that the prosecution has this extra latitude only in RICO cases, of which this trial is one: see count 15. As a result, the defense can't really object to hearsay testimony from Mr. Radler per se, so a motion to limit has to use words like "speculation" and "surmise" to add bounds on the testimony of a witness, like Mr. Radler, who's brought in to "roll." If you're interested, the evidentiary proffer can be found on this page; if you don't mind downloading a 2-meg PDF file straight from this blog, it can be gotten through this direct link.)
There's one report that's been webbed later. The Tines Online has Tom Bower's take on Mr. Radler's upcoming testimony. His article contains, near the bottom of it, one of the expected items that Mr. Radler will disclose under direct examination: Hollinger Int'l's lawyer was ordered to put Hollinger Inc., Conrad Black and David Radler himself into the non-compete agreements, which would explain how the other payees got in there.
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Sensationalistic this may be, but I couldn't resist passing it along: Paris Hiltion's going to Club Fed for 45 days, pending the inevitable appeal. Probation violation, as she and we now know, is a far more straightforward part of criminal law. She tried pulling herself out of it through claiming: "when an officer who stopped her in January made her sign a document stating her licence was suspended, she thought he was mistaken and did not actually look at the document." No, she wasn't bold enough to use the word 'skim'...that she wasn't.
But her maw was bold enough to put this statement into media circulation: "'What do you think? This is pathetic and disgusting, a waste of taxpayer money with all this nonsense. This is a joke.'" No word about any bootleg video version of her opinion being circulated.
(And you wonder why the horsier set tend to pack their daughters away into Swiss boarding schools whose SOP is somewhere between Camp Nightfreeze and a military barracks? Of course, had the Hiltons decided on this option, their daughter Paris wouldn't have been in the right mindframe to provide a "good example" to Lindsay Lohan.)
[Mark Steyn has drawn a comparison between Ms. Hilton's legal troubles and the testimony of the audit committee, in which he states that "The Hilton defence was straight from the Hollinger Audit Committee playbook: she’d signed the document without paying attention, and had no idea that’s what it said." But she, not being a "celebdirector," has had no luck with it so far...]
Also on the not-quite-related list, a story about a pending takeover of Reuters by Thomson Corp., included for this reason: if you thought that there was something askew in the 10-vote shares of Hollinger Int'l held by Hollinger Inc., this CBC report on the Thomson takeover reveals that one particular share, the Founder Share, of Reuters can veto any takeover bid. Its monicker is the "golden share," and it's administered by a board of 15 trustees.
Finally, adding to the scandal beat, one of the anecdotes in a tell-all article webbed in This Is London, by "by ex-rent boy lover" Jeff Chevalier, features he meeting Conrad Black at a party. That story's about three-quarters of the way down. [It's been summarized in the Ottawa Citizen, with this quote, from Mr. Chevalier about Conrad Black, highlighted near the end: "'Conrad spoke of his innocence like a broken record ... They were all laughing and making snide comments about him behind his back.'" About a third of the way down, the summary relates Mr. Chevalier's Conrad Black anecdote in full.]
(This motion is going to be a tricky one to follow; only a lawyer with relevant learning/experience will be able to make sense of the decision process for it. Non-lawyers like me have to wait for the outcome. According to Part II of the evidentiary proffer in this case, conspiracy-related charges do allow testimony, from witnesses who have turned state's evidence, that would normally be struck out of the record as hearsay in a more straightforward criminal trial. The precedents cited in it are almost all recent, suggesting strongly that the prosecution has this extra latitude only in RICO cases, of which this trial is one: see count 15. As a result, the defense can't really object to hearsay testimony from Mr. Radler per se, so a motion to limit has to use words like "speculation" and "surmise" to add bounds on the testimony of a witness, like Mr. Radler, who's brought in to "roll." If you're interested, the evidentiary proffer can be found on this page; if you don't mind downloading a 2-meg PDF file straight from this blog, it can be gotten through this direct link.)
There's one report that's been webbed later. The Tines Online has Tom Bower's take on Mr. Radler's upcoming testimony. His article contains, near the bottom of it, one of the expected items that Mr. Radler will disclose under direct examination: Hollinger Int'l's lawyer was ordered to put Hollinger Inc., Conrad Black and David Radler himself into the non-compete agreements, which would explain how the other payees got in there.
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Sensationalistic this may be, but I couldn't resist passing it along: Paris Hiltion's going to Club Fed for 45 days, pending the inevitable appeal. Probation violation, as she and we now know, is a far more straightforward part of criminal law. She tried pulling herself out of it through claiming: "when an officer who stopped her in January made her sign a document stating her licence was suspended, she thought he was mistaken and did not actually look at the document." No, she wasn't bold enough to use the word 'skim'...that she wasn't.
But her maw was bold enough to put this statement into media circulation: "'What do you think? This is pathetic and disgusting, a waste of taxpayer money with all this nonsense. This is a joke.'" No word about any bootleg video version of her opinion being circulated.
(And you wonder why the horsier set tend to pack their daughters away into Swiss boarding schools whose SOP is somewhere between Camp Nightfreeze and a military barracks? Of course, had the Hiltons decided on this option, their daughter Paris wouldn't have been in the right mindframe to provide a "good example" to Lindsay Lohan.)
[Mark Steyn has drawn a comparison between Ms. Hilton's legal troubles and the testimony of the audit committee, in which he states that "The Hilton defence was straight from the Hollinger Audit Committee playbook: she’d signed the document without paying attention, and had no idea that’s what it said." But she, not being a "celebdirector," has had no luck with it so far...]
Also on the not-quite-related list, a story about a pending takeover of Reuters by Thomson Corp., included for this reason: if you thought that there was something askew in the 10-vote shares of Hollinger Int'l held by Hollinger Inc., this CBC report on the Thomson takeover reveals that one particular share, the Founder Share, of Reuters can veto any takeover bid. Its monicker is the "golden share," and it's administered by a board of 15 trustees.
Finally, adding to the scandal beat, one of the anecdotes in a tell-all article webbed in This Is London, by "by ex-rent boy lover" Jeff Chevalier, features he meeting Conrad Black at a party. That story's about three-quarters of the way down. [It's been summarized in the Ottawa Citizen, with this quote, from Mr. Chevalier about Conrad Black, highlighted near the end: "'Conrad spoke of his innocence like a broken record ... They were all laughing and making snide comments about him behind his back.'" About a third of the way down, the summary relates Mr. Chevalier's Conrad Black anecdote in full.]
Media Roundup: Intermezzo
As Week 7 of the Conrad Black trial ends, the media reports are beginning to dwindle:
1. From the Ontario edition of Business Edge, an opinion piece from a former employee of Conrad Black, through the Calgary Herald, which argues that Mr. Black, at the very least, acts like a guilty man. It's one of the few explicitly pro-comeuppance pieces published in the last few weeks.
2. Janet Whitman of the New York Post notes that there was one document that Richard Thompson did not skim - a Wells Notice, announcing a planned civil action against him by the Securities and Exchange Commission. "Thompson said he read the November 2005 notice - essentially a warning from securities regulators that they were considering a civil suit against him for signing off on the alleged fraud- 'word for word.'" Also included is the jurors' reaction to this admission.
3. From the Calgary Sun, an abridged version of the AP report, by Mike Robinson, on the cross-examination of Mr. Thompson. The New York Times also has a slightly different version of it.
4. Paul Waldie's latest, webbed by the Globe and Mail, describes a defense motion to have any statement made by David Radler on the stand consistent with his Aug. 18, 2005 testimony to a grand jury ruled inadmissible as evidence, on the grounds that "those statements are Mr. Radler's personal conclusions and do not offer any proof that the other men knew about the conspiracy." It also has excerpts from those statements Mr. Radler made back then.
5. From Rick Westhead of the Toronto Star, a report that begins by noting how long the trial will take, with advance warning that the defense is planning for a lengthy list of witnesses too. After recounting a question made in redirect and Mr. Thompson's answer to it, and noting that Mr. Thompson paid for his wife's airfare, the report ends with a mention of - a first in the trial - recross examination, by Eddie Greenspan. The recross was prompted by Eric Sussman's attempt, in redirect examination, to justify the 1997 trip to London and a Hollinger Int'l company dinner held there as a legitimate business expense. (It's almost a sure guess that the defense will copy, as much as is practicable, Csr. Sussman's series of questions once they have a chance to justify the Bora Bora trip and Barbara Black's 60th birthday party as legitimate too. As to whether Csr. Sussman will retool the defense's questioning strategy for the prosecution's cross-examination at that point, it's harder to say.)
6. An abridged report by Mary Vallis has been webbed by the Regina Leader-Post. It focuses upon Ron Safer's cross-examination of Mr. Thompson.
7. The latest report by the Chicago Sun-Times' Mary Wisniewski focuses upon the redirect examination. Her report has a sidebar which notes that Mr. Radler will be preceded by "KPMG auditor Robert Musur."
8. The Chicago Tribune has webbed Rudolph Bush's latest report on the trial, as it appeared in the print edition. Near its end, it mentions that Csr. Sussman demonstrated, with regard to that 1997 trip to London, that "Thompson paid his wife's airfare, stayed in a less expensive hotel and that the trip clearly revolved around business."
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The Tribune also has a feature piece, by Susan Chandler, about the changing duties of the members of boards of directors. Belying the old stereotype of the snoozy board, "[t]oday's board members are paying a lot more attention, corporate governance experts say, and are more aware of their own responsibilities as independent overseers than they were just a few years ago. They also are more worried about getting personally sued." It details the post-Enron sea change that has made the position of board member (especially member of an audit committee) more onerous, as hammered into place by the Sarbanes-Oxley Act. Also noted in the article is "the number of active CEOs on outside boards has plunged in recent decades.... Among CEOs who still serve on other company's boards, the average number of commitments has fallen from an average of 2.2 boards to 1.4, a 36 percent decrease."
After a hiatus that was even longer than the Wall Street Journal's Law Blog, David Frum has returned to the Conrad Black trial beat. He notes that the business media is slowly swinging around to Mark Steyn's perspective, and that the responsible straw was the cross-examination of James R. Thompson.
Fans of Tom Bower's book, Conrad & Lady Black - Dancing On The Edge, will like Douglas Bell's latest Toronto Life trial blog entry. Continuing on a theme that Mr. Bower himself used - Rupert Murdoch as a more able foil to Conrad Black - Mr. Bell praises Mr. Murdoch for his audacious bid for Dow, Jones.
Finally, in "Finlay ON Governance," a post that reveals the Hollinger Int'l board of directors to be somewhat of a rogue's gallery. The implosion of the audit committee's testimony isn't very surprising in this context.
1. From the Ontario edition of Business Edge, an opinion piece from a former employee of Conrad Black, through the Calgary Herald, which argues that Mr. Black, at the very least, acts like a guilty man. It's one of the few explicitly pro-comeuppance pieces published in the last few weeks.
2. Janet Whitman of the New York Post notes that there was one document that Richard Thompson did not skim - a Wells Notice, announcing a planned civil action against him by the Securities and Exchange Commission. "Thompson said he read the November 2005 notice - essentially a warning from securities regulators that they were considering a civil suit against him for signing off on the alleged fraud- 'word for word.'" Also included is the jurors' reaction to this admission.
3. From the Calgary Sun, an abridged version of the AP report, by Mike Robinson, on the cross-examination of Mr. Thompson. The New York Times also has a slightly different version of it.
4. Paul Waldie's latest, webbed by the Globe and Mail, describes a defense motion to have any statement made by David Radler on the stand consistent with his Aug. 18, 2005 testimony to a grand jury ruled inadmissible as evidence, on the grounds that "those statements are Mr. Radler's personal conclusions and do not offer any proof that the other men knew about the conspiracy." It also has excerpts from those statements Mr. Radler made back then.
5. From Rick Westhead of the Toronto Star, a report that begins by noting how long the trial will take, with advance warning that the defense is planning for a lengthy list of witnesses too. After recounting a question made in redirect and Mr. Thompson's answer to it, and noting that Mr. Thompson paid for his wife's airfare, the report ends with a mention of - a first in the trial - recross examination, by Eddie Greenspan. The recross was prompted by Eric Sussman's attempt, in redirect examination, to justify the 1997 trip to London and a Hollinger Int'l company dinner held there as a legitimate business expense. (It's almost a sure guess that the defense will copy, as much as is practicable, Csr. Sussman's series of questions once they have a chance to justify the Bora Bora trip and Barbara Black's 60th birthday party as legitimate too. As to whether Csr. Sussman will retool the defense's questioning strategy for the prosecution's cross-examination at that point, it's harder to say.)
6. An abridged report by Mary Vallis has been webbed by the Regina Leader-Post. It focuses upon Ron Safer's cross-examination of Mr. Thompson.
7. The latest report by the Chicago Sun-Times' Mary Wisniewski focuses upon the redirect examination. Her report has a sidebar which notes that Mr. Radler will be preceded by "KPMG auditor Robert Musur."
8. The Chicago Tribune has webbed Rudolph Bush's latest report on the trial, as it appeared in the print edition. Near its end, it mentions that Csr. Sussman demonstrated, with regard to that 1997 trip to London, that "Thompson paid his wife's airfare, stayed in a less expensive hotel and that the trip clearly revolved around business."
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The Tribune also has a feature piece, by Susan Chandler, about the changing duties of the members of boards of directors. Belying the old stereotype of the snoozy board, "[t]oday's board members are paying a lot more attention, corporate governance experts say, and are more aware of their own responsibilities as independent overseers than they were just a few years ago. They also are more worried about getting personally sued." It details the post-Enron sea change that has made the position of board member (especially member of an audit committee) more onerous, as hammered into place by the Sarbanes-Oxley Act. Also noted in the article is "the number of active CEOs on outside boards has plunged in recent decades.... Among CEOs who still serve on other company's boards, the average number of commitments has fallen from an average of 2.2 boards to 1.4, a 36 percent decrease."
After a hiatus that was even longer than the Wall Street Journal's Law Blog, David Frum has returned to the Conrad Black trial beat. He notes that the business media is slowly swinging around to Mark Steyn's perspective, and that the responsible straw was the cross-examination of James R. Thompson.
Fans of Tom Bower's book, Conrad & Lady Black - Dancing On The Edge, will like Douglas Bell's latest Toronto Life trial blog entry. Continuing on a theme that Mr. Bower himself used - Rupert Murdoch as a more able foil to Conrad Black - Mr. Bell praises Mr. Murdoch for his audacious bid for Dow, Jones.
Finally, in "Finlay ON Governance," a post that reveals the Hollinger Int'l board of directors to be somewhat of a rogue's gallery. The implosion of the audit committee's testimony isn't very surprising in this context.
Thursday, May 3, 2007
Thursday's Trial Action: Going To The Motions
BNN just had its regular trial interview with Paul Waldie, aired 2:35 PM ET, which he started off by reporting on the final testimony of Mr. Thompson. He faced more tough questions as to why he had signed but not had read the disclosure documents. The prosecution did ask questions under redirect examination, and Mr. Thompson stuck to the same story he stated under the initial direct examination. While under redirect, he flatly denied Eddie's Greenspan's suggestion that he had lied about never approving anything currently under suspicion. When asked by host Amanda Lang how he looked after he was through, Mr. Waldie answered that Mr. Thompson didn't walk off the stand looking very good - he looked like somewhat of a "rubber stamp" director despite his denials that he was one. He still is a respected politician, though, so it's not clear how the jury will weigh his testimony. All four cross-examinations of him took the same tack, even though each had different flavors. As far as David Radler's upcoming testimony is concerned, motions are already flying with regard to what Mr. Radler can say on the stand. His testimony might very well start Monday afternoon. Mr. Waldie's latest written report for the Globe and Mail is here.
The Reuters report is out, once again written by Andrew Stern. It starts off with a point made under redirect: Mr. Thompson, when still on the board, had not anticipated having to testify in a criminal court. The bulk of the report, though, was devoted to Ron Safer's cross examination, which focused upon Mr. Thompson's memory lapses. "Safer tried to show Thompson's memory was selective -- he could remember when prosecutors asked him specifics, but often could not recall events when questions were posed by the defense." Mr. Stern concurs with Mr. Waldie by noting that Mr. Thompson stuck to his guns, such as they were, all the way through.
Crain's Chicago Business has a summation of the cross-examination with an unusual item in it: one of the spectators during the grilling of former Gov. Thompson was none other than the adopted son of a former Illinois governor who got convicted thanks to Mr. Thompson's prosecutorial work. Anton Cermak Kerner had this to say: when "[a]sked if he took satisfaction from seeing Mr. Thompson grilled on the witness stand, Mr. Kerner said: 'No, not satisfaction — a sense of irony.'"
The Associated Press report, webbed by ABC7 Chicago, has a more straightforward take on today's testimony. It begins with, "Former Gov. James R. Thompson wrapped up three grueling days on the witness stand Thursday with an emotional denial that he approved millions of dollars in payments now at the heart of the racketeering and fraud case against media mogul Conrad Black." Later, it notes that Mr. Thompson explained his sketchy recall by saying "'[the event he was being cross-examined about took place] seven years ago'" while on the stand, but it also brings up the point that the defense hammered away at: his (in retrospect, an) admission that he had only skimmed the documents he was responsible for. It ends by mentioning that testimony is over for the week. [The same report, credited to Mike Robinson, has been webbed by 680 News.]
An updated AP report repeats Mr. Thompson's claim, found in the earlier one and brought up by Mr. Waldie, that Csr. Greenspan "'was saying to me that I had lied to this jury about not approving those payments,'... in response to a question from lead prosecutor Eric H. Sussman." It adds that Mr. Thompson was reached by telephone this afternoon, but declined to comment; the reason given by him was, the trial was still in progress. Forbes.com has webbed it, as has Canadian Business, which credits Mike Robinson for it.
Finally, Mary Vallis has written another report, webbed by Canada.com, which starts off with a note that Mr. Thompson was made by defense counsels to look like he got paid a lot for doing little: "Former Illinois governor James R. Thompson admitted Thursday he collected more than $18,000 US in a single day for attending meetings during which he 'skimmed' key documents that are now the basis of criminal fraud charges against Conrad Black and three former business associates.... [L]awyer Ron Safer walked the witness through a list of key meetings he participated in on Feb. 25, 2002, and pointed out that, despite his pay, Thompson appeared to have done very little work." Just below, it mentions a 17-page draft financial statement, presented to the audit committee members on February 25 2002, in which the non-compete payments were mentioned, previous to recounting Ron Safer's part of the cross-examination. Just before noting that David Radler is expected to testify on Monday, it ends with: "When Thompson was finally excused, he walked to the prosecutors’ table and shook their hands, giving them a thumbs-up."
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Mark Steyn's trial blog has three entries so far today: the most recent one contrasts the board-member fees received by former Gov. Thompson to the pay of the jurors who are expected not to "skim" through the testimony.
Also, Douglas Bell of Toronto Life's Conrad Black Trial Blog has highlighted a new entry in the Wall Street Journal law blog. We haven't seen one from them for a long time. (The entry itself is here.)
And finally, Steve Skurka's latest entry in "The Crime Sheet" begins with the assessment that the prosecution is flying blind with respect to their now-punctured case. About half-way down, he states flatly: "I will provide you with my objective and legally literate opinion about the Conrad Black trial. The defence is winning this trial. Mark that down. The prosecution is still struggling to develop a coherent theory of their case seven weeks into the trial. The prosecution case is the Titanic searching for an iceberg."
The Reuters report is out, once again written by Andrew Stern. It starts off with a point made under redirect: Mr. Thompson, when still on the board, had not anticipated having to testify in a criminal court. The bulk of the report, though, was devoted to Ron Safer's cross examination, which focused upon Mr. Thompson's memory lapses. "Safer tried to show Thompson's memory was selective -- he could remember when prosecutors asked him specifics, but often could not recall events when questions were posed by the defense." Mr. Stern concurs with Mr. Waldie by noting that Mr. Thompson stuck to his guns, such as they were, all the way through.
Crain's Chicago Business has a summation of the cross-examination with an unusual item in it: one of the spectators during the grilling of former Gov. Thompson was none other than the adopted son of a former Illinois governor who got convicted thanks to Mr. Thompson's prosecutorial work. Anton Cermak Kerner had this to say: when "[a]sked if he took satisfaction from seeing Mr. Thompson grilled on the witness stand, Mr. Kerner said: 'No, not satisfaction — a sense of irony.'"
The Associated Press report, webbed by ABC7 Chicago, has a more straightforward take on today's testimony. It begins with, "Former Gov. James R. Thompson wrapped up three grueling days on the witness stand Thursday with an emotional denial that he approved millions of dollars in payments now at the heart of the racketeering and fraud case against media mogul Conrad Black." Later, it notes that Mr. Thompson explained his sketchy recall by saying "'[the event he was being cross-examined about took place] seven years ago'" while on the stand, but it also brings up the point that the defense hammered away at: his (in retrospect, an) admission that he had only skimmed the documents he was responsible for. It ends by mentioning that testimony is over for the week. [The same report, credited to Mike Robinson, has been webbed by 680 News.]
An updated AP report repeats Mr. Thompson's claim, found in the earlier one and brought up by Mr. Waldie, that Csr. Greenspan "'was saying to me that I had lied to this jury about not approving those payments,'... in response to a question from lead prosecutor Eric H. Sussman." It adds that Mr. Thompson was reached by telephone this afternoon, but declined to comment; the reason given by him was, the trial was still in progress. Forbes.com has webbed it, as has Canadian Business, which credits Mike Robinson for it.
Finally, Mary Vallis has written another report, webbed by Canada.com, which starts off with a note that Mr. Thompson was made by defense counsels to look like he got paid a lot for doing little: "Former Illinois governor James R. Thompson admitted Thursday he collected more than $18,000 US in a single day for attending meetings during which he 'skimmed' key documents that are now the basis of criminal fraud charges against Conrad Black and three former business associates.... [L]awyer Ron Safer walked the witness through a list of key meetings he participated in on Feb. 25, 2002, and pointed out that, despite his pay, Thompson appeared to have done very little work." Just below, it mentions a 17-page draft financial statement, presented to the audit committee members on February 25 2002, in which the non-compete payments were mentioned, previous to recounting Ron Safer's part of the cross-examination. Just before noting that David Radler is expected to testify on Monday, it ends with: "When Thompson was finally excused, he walked to the prosecutors’ table and shook their hands, giving them a thumbs-up."
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Mark Steyn's trial blog has three entries so far today: the most recent one contrasts the board-member fees received by former Gov. Thompson to the pay of the jurors who are expected not to "skim" through the testimony.
Also, Douglas Bell of Toronto Life's Conrad Black Trial Blog has highlighted a new entry in the Wall Street Journal law blog. We haven't seen one from them for a long time. (The entry itself is here.)
And finally, Steve Skurka's latest entry in "The Crime Sheet" begins with the assessment that the prosecution is flying blind with respect to their now-punctured case. About half-way down, he states flatly: "I will provide you with my objective and legally literate opinion about the Conrad Black trial. The defence is winning this trial. Mark that down. The prosecution is still struggling to develop a coherent theory of their case seven weeks into the trial. The prosecution case is the Titanic searching for an iceberg."
Media Roundup: Careful Skimming
The overnight media reports on the Conrad Black trial were even more plentiful than yesterday's - unsurprisingly so, given yesterday's cross-examination:
1. The latest write-up by Rudolph Bush of the Chicago Tribune focuses upon the repeated admissions Gov. Thompson made, in which he said that he had only "skimmed" the relevant documentation disclosing the individual non-compete payments. It includes Mr. Thompson's self-justification for doing so: management should have specifically pointed the irregularities out to him, probably orally.
2. A mention from Chicago Public Radio's Diantha Parker, which also notes that Mr. Thompson will be back on the stand today.
3. The International Herald Tribune has webbed the Associated Press report covering Mr. Thompson's travails on the stand yesterday.
4. The New York Times has a report on the trial today; it characterizes the cross-examination of all four defense counsels, including Ron Safer's cross-examination so far, as portraying Mr. Thompson as "inept."
5. MSN Money has webbed the Financial Times' report, which starts by noting Eddie Greenspan's own characterization of Mr. Thompson's omissions as a "'remarkable coincidence'" and ends by quoting Csr. Greenspan's pivotal question, which Mr. Thompson flatly nayed, in full: "'I'm going to suggest that you read and approved the transactions and [when they came under scrutiny]…that all three of you conveniently forgot,' Mr Greenspan asserted." FT.com itself has webbed the report too.
6. From Monsters and Critics, the United Press summary of yesterday's admissions.
7. The Daily Herald's Anna Marie Kucek has a report which starts off with: "'Big Jim' Thompson was cut down to size by defense attorneys who suggested Wednesday that he knew more than he was willing to say about former Chief Executive Conrad Black allegedly pocketing money from the sale of Hollinger International Inc. assets." It relates that Mr. Thompson stuck with his story all the way through the cross-examinations, including his admission about only skimming the documents.
8. Theresa Tedesco's latest report, webbed by the National Post, begins by describing the audit committee as "substitute victims," or proxies for the alleged real ones. "But by the time the battery of defence lawyers finished with them, the committee members resembled three blind mice rubber-stamping every piece of paper put before them.... Under cross-examination, their responses sounded like excuses and finger pointing to avoid responsibility for the fact that their collective signatures are on every document approving the US$60-million prosecutors claim Lord Black and the others misappropriated from Hollinger's shareholders in the form of bonuses disguised as taxfree non-competes." The rest of the report contains a detailed recounting of the cross-examination, and ends with: "Hollinger 's shareholders aren't expected to get the chance to tell the jury what they think."
9. Patricia Best of the Globe and Mail notes in her blog column, "Nobody's Business," that Tom Bower was kicked out of the courtroom yesterday. (Theresa Tedesco herself noted it yesterday.)
10. The Globe's Paul Waldie's report includes a chilly response to one of Csr. Greenspan's questions: "'Skimming is a form of reading,' Mr. Thompson replied coldly."
11. Janet Whitman of the New York Post comes right out with it: "Conrad Black's lead lawyer [accused Mr. Thompson] and the two other ex-members of Hollinger International's audit committee of lying about their ignorance of the allegedly ill-gotten executive payouts at the heart of the fraud trial."
12. The Vancouver Sun has webbed Mary Vallis' latest, which reports that the "jury paid close attention to the former governor's testimony. One female juror turned her chair away from the gallery to directly face Thompson." It ends by quoting Mr. Thompson's justification for skimming: "Thompson testified he assumed he could trust the documents in question because they were prepared with the help of Hollinger's senior management, auditors and chief financial auditors, 'I assumed they were true and correct, and I skimmed them,' he said. 'Unless I had some reason to believe there was something incorrect in here, I would skim them.'"
13. Rick Westhead of the Toronto Star ends his report by noting that, though the defense may have won the day, they have a more difficult challenge ahead: justifying the delayed disclosure of the non-competes to shareholders through a 2002 SEC filing.
14. Michael Sneed's latest Chicago Sun-Times column mentions a request made by Conrad Black to the court's sketch artist, Verna Sadock.
15. Another Sun-Times columnist, Mark Brown, compares Eddie Greenspan to noted lawyer Dan K. Webb.
16. The Sun-Times also has a news report, written by Mary Wisniewski, which also uses the l-word with reference to Csr. Greenspan's suggestion. It ends with the observation that "Thompson occasionally seemed impatient, raising his voice."
17. Mr. Waldie's second report has also been webbed by the Globe. It passes along an estimate by Eric Sussman of how long the prosecution will continue: "We may take the full week of June 4th,'" and has another estimate of the trial's conclusion: July at the earliest. Near the end, it notes that Csr. Sussman will have an "a chance to ask Mr. Thompson to clarify some of his testimony" in redirect examination [this afternoon. The report has been updated to include some of the questioning that Csr. Safer has used this morning. One example from it: after noting that Mr. Thompson is an experieced lawyer, Csr. Safer asked, "'You understand the importance in a criminal trial who said what?...You don't recall who said what?'"]
18. Market-Day.net has a paraphrase of the United Press report, with a summation of the Chicago Tribune's coverage.
1. The latest write-up by Rudolph Bush of the Chicago Tribune focuses upon the repeated admissions Gov. Thompson made, in which he said that he had only "skimmed" the relevant documentation disclosing the individual non-compete payments. It includes Mr. Thompson's self-justification for doing so: management should have specifically pointed the irregularities out to him, probably orally.
2. A mention from Chicago Public Radio's Diantha Parker, which also notes that Mr. Thompson will be back on the stand today.
3. The International Herald Tribune has webbed the Associated Press report covering Mr. Thompson's travails on the stand yesterday.
4. The New York Times has a report on the trial today; it characterizes the cross-examination of all four defense counsels, including Ron Safer's cross-examination so far, as portraying Mr. Thompson as "inept."
5. MSN Money has webbed the Financial Times' report, which starts by noting Eddie Greenspan's own characterization of Mr. Thompson's omissions as a "'remarkable coincidence'" and ends by quoting Csr. Greenspan's pivotal question, which Mr. Thompson flatly nayed, in full: "'I'm going to suggest that you read and approved the transactions and [when they came under scrutiny]…that all three of you conveniently forgot,' Mr Greenspan asserted." FT.com itself has webbed the report too.
6. From Monsters and Critics, the United Press summary of yesterday's admissions.
7. The Daily Herald's Anna Marie Kucek has a report which starts off with: "'Big Jim' Thompson was cut down to size by defense attorneys who suggested Wednesday that he knew more than he was willing to say about former Chief Executive Conrad Black allegedly pocketing money from the sale of Hollinger International Inc. assets." It relates that Mr. Thompson stuck with his story all the way through the cross-examinations, including his admission about only skimming the documents.
8. Theresa Tedesco's latest report, webbed by the National Post, begins by describing the audit committee as "substitute victims," or proxies for the alleged real ones. "But by the time the battery of defence lawyers finished with them, the committee members resembled three blind mice rubber-stamping every piece of paper put before them.... Under cross-examination, their responses sounded like excuses and finger pointing to avoid responsibility for the fact that their collective signatures are on every document approving the US$60-million prosecutors claim Lord Black and the others misappropriated from Hollinger's shareholders in the form of bonuses disguised as taxfree non-competes." The rest of the report contains a detailed recounting of the cross-examination, and ends with: "Hollinger 's shareholders aren't expected to get the chance to tell the jury what they think."
9. Patricia Best of the Globe and Mail notes in her blog column, "Nobody's Business," that Tom Bower was kicked out of the courtroom yesterday. (Theresa Tedesco herself noted it yesterday.)
10. The Globe's Paul Waldie's report includes a chilly response to one of Csr. Greenspan's questions: "'Skimming is a form of reading,' Mr. Thompson replied coldly."
11. Janet Whitman of the New York Post comes right out with it: "Conrad Black's lead lawyer [accused Mr. Thompson] and the two other ex-members of Hollinger International's audit committee of lying about their ignorance of the allegedly ill-gotten executive payouts at the heart of the fraud trial."
12. The Vancouver Sun has webbed Mary Vallis' latest, which reports that the "jury paid close attention to the former governor's testimony. One female juror turned her chair away from the gallery to directly face Thompson." It ends by quoting Mr. Thompson's justification for skimming: "Thompson testified he assumed he could trust the documents in question because they were prepared with the help of Hollinger's senior management, auditors and chief financial auditors, 'I assumed they were true and correct, and I skimmed them,' he said. 'Unless I had some reason to believe there was something incorrect in here, I would skim them.'"
13. Rick Westhead of the Toronto Star ends his report by noting that, though the defense may have won the day, they have a more difficult challenge ahead: justifying the delayed disclosure of the non-competes to shareholders through a 2002 SEC filing.
14. Michael Sneed's latest Chicago Sun-Times column mentions a request made by Conrad Black to the court's sketch artist, Verna Sadock.
15. Another Sun-Times columnist, Mark Brown, compares Eddie Greenspan to noted lawyer Dan K. Webb.
16. The Sun-Times also has a news report, written by Mary Wisniewski, which also uses the l-word with reference to Csr. Greenspan's suggestion. It ends with the observation that "Thompson occasionally seemed impatient, raising his voice."
17. Mr. Waldie's second report has also been webbed by the Globe. It passes along an estimate by Eric Sussman of how long the prosecution will continue: "We may take the full week of June 4th,'" and has another estimate of the trial's conclusion: July at the earliest. Near the end, it notes that Csr. Sussman will have an "a chance to ask Mr. Thompson to clarify some of his testimony" in redirect examination [this afternoon. The report has been updated to include some of the questioning that Csr. Safer has used this morning. One example from it: after noting that Mr. Thompson is an experieced lawyer, Csr. Safer asked, "'You understand the importance in a criminal trial who said what?...You don't recall who said what?'"]
18. Market-Day.net has a paraphrase of the United Press report, with a summation of the Chicago Tribune's coverage.
Wednesday, May 2, 2007
Governated
Paul Waldie was interviewed on BNN, and reported that James Thompson didn't do all that well when cross-examined by Eddie Greenspan. He had testified, under direct examination, that he was never told about the individual non-compete agreements and he had not approved a one. He also testified that he had only skimmed the disclosure documents that included them, which did have language that explained the non-competes. Csr. Greenspan walked all over these stipulations. He even asked if Mr. Thompson "went to school to learn how to read documents," and did suggest that Mr. Thompson should have read them. Csr. Greenspan, before he was done with Mr. Thompson, noted that all three audit committee members had said the same things, and had missed the same things.
Near the end of the interview, Mr. Waldie passed along the expectation that David Radler will take the stand at the beginning of next week. The prosecution, though, has a lot more case left: they have yet to deal with the purchase of the New York apartment, the alleged tax fraud, and the 13 boxes that form the basis of the obstruction-of-justice charge. The prosecution has estimated that they will rest about one month later. He finished by noting that the prosecutorial team is diffuse with respect to strategy. [His latest Globe and Mail write-up has additional details.]
The Chicago Tribune has more details on this morning's cross-examination too. Mr. Thompson did admit, "'I should have read them word for word. I didn't,' [to] Edward Greenspan today, his second day of testimony in Chicago federal court." Mr. Thompson's stipulation that he had only skimmed the relevant documents, made under cross-examination yesterday, was pounced on by Csr. Greenspan: "'Hollinger didn't pay you $60,000 to skim documents?' Greenspan asked, referring to his director salary. 'They never asked you, 'Please skim this?'"
Later, Csr. Greenspan suggested that Mr. Thompson did in fact read the documents, which he had "'conveniently forgot'" when the audit committee was criticized for their approvals. This question got the answer, "That is false.'" Bloomberg's report, written by Andrew Harris and Bob Van Voris, contains similar details, but introduces those details with this sentence: "Thompson's statement undercuts his earlier assertion that he wasn't told about fees Black got from companies buying Hollinger properties."
The Daily Herald of Illinois has a report of its own, written by Anna Marie Kucek. Regarding the stipulation, it relates that Mr. Thompson "said during his testimony that he at least skimmed everything that came before the panel and 'obviously' missed some things, but he still believes he acted in the best interest of the company." It ends with an extract in which Mr. Thompson affirmed that he was not a rubber stamp for Mr. Black.
Associated Press' report has been webbed by ABC7 Chicago. It describes the cross-examination that Mr. Thompson went through this morning as "three merciless hours on the witness stand," as Csr. Greenspan, and Patrick Tuite, tore into him. Regarding the latter counsel, Csr. Tuite went so far as to explicitly mention to Mr. Thompson that they were old acquaintances, when outside the courthouse, before starting his cross-examination. He then used a patronizing approach to his questioning, asking once if Mr. Thompson would have preferred relevant parts of the documents be printed in "'bigger letters'" or in "'neon'" lettering. "Tuite reminded Thompson that he testified Tuesday that part of the job of the board of directors was to be careful of the company's interests." Mr. Thompson then reaffirmed that "'I exercised care in all of my duties as a Hollinger director for all of the years I was a director'" when asked if skimming constituted "care." [An AP summary has also been webbed.]
Andrew Stern's report, webbed by Reuters, does go easier on Mr. Thompson. It mentions that the documents being questioned about "often ran to 100 single-spaced pages," but immediately after that, it quotes Csr. Greenspan asking if Mr. Thompson could go to either Mr. Black or Mr. Radler for an explanation, to which the latter did assent.
MSNBC.com has webbed the FT report on this morning's testimony, written by Stephanie Kirchgaessner, which starts off by noting that "Conrad Black is beginning to look more upbeat." It quotes David Gourevitch, who noted that the stumbling block for the prosecution now is: why would the individual non-compete payments be disclosed at all, a point also made by Steve Skurka. "'There are certain crimes that are not self-evidently improper, which in certain circumstances are legal and certain circumstances are not. And those cases turn on evidence of intent and characterisation of what the transaction is about,' Mr Gourevitch says." It mentions later that the prosecution has made some headway, though, especially in casting doubt upon the defense's claim that Mr. Radler and Mr. Black were co-chiefs of different geographical parts of the business.
The most recent reports also have details of the cross-examination by Ron Safer, Mark Kipnis' defense counsel. Csr. Safer zeroed in on the audit committee's approval of the management fees sent to Ravelston. A report by Mary Vallis, webbed by Canada.com, discloses that "Thompson admitted he never asked for documentation supporting the fees that were being charged by Ravelston." The updated Bloomberg report puts dollar and time figure to the fees: "Safer reviewed with Thompson the more than $288 million in management fees and compensation paid by Hollinger to Black's privately-held Ravelston Corp. between 1997 and 2003." When asked by Csr. Safer if he had "'voted for every single dollar'" simply on David Radler's say-so, Mr. Thompson answered "'Yes.'"
Finally, as a re-cap, CBS2Chicago has an original report, by CBS2 correspondent Mike Parker, which primarily covers Csr. Greenspan's aggressive cross-examination. A video clip is embedded in the story page.
-----------
Those who don't like Mark Steyn's coverage may find a kindred spirit in Toronto Life's Douglas Bell, who labels a recent entry in Mr. Steyn's blog "sophistry." The entry in question is two previous to tonight's one, in which Mr. Steyn suggests a blind test with another 11 documents to see if the three audit committee members would miss the same items again.
Roger Martin, also with the Toronto Life Conrad Black trial blog, points out a more serious implication of the three audit committee members' blame-the-CEO defense: what kind of protection for shareholders can be expected if this defense is credible, unless the CEO is not "wily and greedy" in which case their presence is largely superfluous?
The "Black Board" is heating up, with posts from Mary Vallis, which reports that Csr. Safer introduced himself to Mr. Thompson by saying "'Unlike Mr. Tuite, you and I are not old friends,'” and Theresa Tedesco, which discloses that Tom Bower got ejected from the cortroom today.
And finally, Steve Skurka, in "The Crime Sheet," concurs with Roger Martin's assessment after unfurling James Thompson's panolpy of board memberships and corporate-governance CV. He also predicts another exciting, if gruelling, day tomorrow.
Near the end of the interview, Mr. Waldie passed along the expectation that David Radler will take the stand at the beginning of next week. The prosecution, though, has a lot more case left: they have yet to deal with the purchase of the New York apartment, the alleged tax fraud, and the 13 boxes that form the basis of the obstruction-of-justice charge. The prosecution has estimated that they will rest about one month later. He finished by noting that the prosecutorial team is diffuse with respect to strategy. [His latest Globe and Mail write-up has additional details.]
The Chicago Tribune has more details on this morning's cross-examination too. Mr. Thompson did admit, "'I should have read them word for word. I didn't,' [to] Edward Greenspan today, his second day of testimony in Chicago federal court." Mr. Thompson's stipulation that he had only skimmed the relevant documents, made under cross-examination yesterday, was pounced on by Csr. Greenspan: "'Hollinger didn't pay you $60,000 to skim documents?' Greenspan asked, referring to his director salary. 'They never asked you, 'Please skim this?'"
Later, Csr. Greenspan suggested that Mr. Thompson did in fact read the documents, which he had "'conveniently forgot'" when the audit committee was criticized for their approvals. This question got the answer, "That is false.'" Bloomberg's report, written by Andrew Harris and Bob Van Voris, contains similar details, but introduces those details with this sentence: "Thompson's statement undercuts his earlier assertion that he wasn't told about fees Black got from companies buying Hollinger properties."
The Daily Herald of Illinois has a report of its own, written by Anna Marie Kucek. Regarding the stipulation, it relates that Mr. Thompson "said during his testimony that he at least skimmed everything that came before the panel and 'obviously' missed some things, but he still believes he acted in the best interest of the company." It ends with an extract in which Mr. Thompson affirmed that he was not a rubber stamp for Mr. Black.
Associated Press' report has been webbed by ABC7 Chicago. It describes the cross-examination that Mr. Thompson went through this morning as "three merciless hours on the witness stand," as Csr. Greenspan, and Patrick Tuite, tore into him. Regarding the latter counsel, Csr. Tuite went so far as to explicitly mention to Mr. Thompson that they were old acquaintances, when outside the courthouse, before starting his cross-examination. He then used a patronizing approach to his questioning, asking once if Mr. Thompson would have preferred relevant parts of the documents be printed in "'bigger letters'" or in "'neon'" lettering. "Tuite reminded Thompson that he testified Tuesday that part of the job of the board of directors was to be careful of the company's interests." Mr. Thompson then reaffirmed that "'I exercised care in all of my duties as a Hollinger director for all of the years I was a director'" when asked if skimming constituted "care." [An AP summary has also been webbed.]
Andrew Stern's report, webbed by Reuters, does go easier on Mr. Thompson. It mentions that the documents being questioned about "often ran to 100 single-spaced pages," but immediately after that, it quotes Csr. Greenspan asking if Mr. Thompson could go to either Mr. Black or Mr. Radler for an explanation, to which the latter did assent.
MSNBC.com has webbed the FT report on this morning's testimony, written by Stephanie Kirchgaessner, which starts off by noting that "Conrad Black is beginning to look more upbeat." It quotes David Gourevitch, who noted that the stumbling block for the prosecution now is: why would the individual non-compete payments be disclosed at all, a point also made by Steve Skurka. "'There are certain crimes that are not self-evidently improper, which in certain circumstances are legal and certain circumstances are not. And those cases turn on evidence of intent and characterisation of what the transaction is about,' Mr Gourevitch says." It mentions later that the prosecution has made some headway, though, especially in casting doubt upon the defense's claim that Mr. Radler and Mr. Black were co-chiefs of different geographical parts of the business.
The most recent reports also have details of the cross-examination by Ron Safer, Mark Kipnis' defense counsel. Csr. Safer zeroed in on the audit committee's approval of the management fees sent to Ravelston. A report by Mary Vallis, webbed by Canada.com, discloses that "Thompson admitted he never asked for documentation supporting the fees that were being charged by Ravelston." The updated Bloomberg report puts dollar and time figure to the fees: "Safer reviewed with Thompson the more than $288 million in management fees and compensation paid by Hollinger to Black's privately-held Ravelston Corp. between 1997 and 2003." When asked by Csr. Safer if he had "'voted for every single dollar'" simply on David Radler's say-so, Mr. Thompson answered "'Yes.'"
Finally, as a re-cap, CBS2Chicago has an original report, by CBS2 correspondent Mike Parker, which primarily covers Csr. Greenspan's aggressive cross-examination. A video clip is embedded in the story page.
-----------
Those who don't like Mark Steyn's coverage may find a kindred spirit in Toronto Life's Douglas Bell, who labels a recent entry in Mr. Steyn's blog "sophistry." The entry in question is two previous to tonight's one, in which Mr. Steyn suggests a blind test with another 11 documents to see if the three audit committee members would miss the same items again.
Roger Martin, also with the Toronto Life Conrad Black trial blog, points out a more serious implication of the three audit committee members' blame-the-CEO defense: what kind of protection for shareholders can be expected if this defense is credible, unless the CEO is not "wily and greedy" in which case their presence is largely superfluous?
The "Black Board" is heating up, with posts from Mary Vallis, which reports that Csr. Safer introduced himself to Mr. Thompson by saying "'Unlike Mr. Tuite, you and I are not old friends,'” and Theresa Tedesco, which discloses that Tom Bower got ejected from the cortroom today.
And finally, Steve Skurka, in "The Crime Sheet," concurs with Roger Martin's assessment after unfurling James Thompson's panolpy of board memberships and corporate-governance CV. He also predicts another exciting, if gruelling, day tomorrow.
Media Roundup: Memory Lapses
The reports on the Conrad Black trial are beginning to proliferate again, as "Big Jim" Thompson is challenged by "Fast Eddie" Greenspan:
1. From Rudolph Bush and David Greising of the Chicago Tribune, a lengthy write-up which reports that Csr. Greenspan suggested that Mr. Thompson himself availed of the facilities offered by Hollinger International. Two perks enjoyed by Mr. Thompson are mentioned which, Csr. Grenspan intimated, were comparable in cost to Barbara Black's birthday party and the Bora Bora Vacation. It notes that Mr. Thompson testified under direct examination that none of the suspicious transactions were approved by the audit committee, and that "Thompson at times came across as obstinate on cross-examination." A slightly briefer version of the same report is webbed here.
2. The San Jose Mercury News has webbed an AP report by Mike Robinson, which discloses that Mr. Thompson testified under cross-examination to staying at Claridge's of London for three days, at Hollinger Int'l's expense, before recounting his testimony made under direct examination.
3. From Law.com, a report that focuses on Mr. Thompson's direct testimony. It discloses that he testified that he depended upon Mark Kipnis to inform him and the rest of the audit committee about each transaction.
4. A New York Times webbing of a Bloomberg report also recounts testimony made under direct examination. It relates that Mr. Thompson answered "No" when asked about all of the non-compete payments made in 1998 and 1999 to entities other than Hollinger Int'l.
5. From the Globe and Mail's "Bar Talk," a note that Csr. Greenspan has shouldered the role of the bad-boy attorney.
6. Also from the Globe, a Christie Blatchford column which begins by noting that "an important prosecution witness was yesterday confronted with an example of his own hand in the corporate cookie jar." Its theme is, the corporate-governance movement doesn't appear that practical-minded when a real would-be hero of the movement shows the everyday casualness, if not laxity, that Mr. Thompson did when audit-committe chair. "In several bizarre exchanges with Mr. Sussman, Mr. Thompson would say flatly, 'I don't recall anything,' and then spend minutes being asked a series of specific questions about whatever meeting or memo he didn't remember in the first place. Unsurprisingly, his answer was usually, 'I don't recall.'" Ms. Blatchford opined that Mr. Thompson's testimony so far, including what was said under cross-examination, has neither helped nor hurt Conrad Black's defense.
7. The Daily Herald of Illinois reports on both the direct and the cross-examination.
8. Rick Westhead of the Toronto Star reports that Mr. Thompson's testimony, that Mr. Black and David Radler worked closely together, "may prove crippling to Black's defence." The article also contains excerpts from the Breeden Report, while noting that it was ruled inadmissible as evidence. An excerpt from it has been webbed by Free Market News.
9. Another report in the Globe, this one by Paul Waldie, focuses upon the testimony made under direct examination.
10. Mary Wisniewski of the Chicago Sun-Times has a report entitled "Thompson: What fees?" From it: "Thompson did approve $26.4 million in non-compete payments to Black, Radler and others in 2000 in relation to the sale of Hollinger's Canadian papers. Thompson said that when the issue first came up, he told Radler that he had never heard of executives being paid personally to sign agreements not to compete with the buyer. Thompson asked for industry precedent.... Radler never gave Thompson the 'comparables' he sought. Instead, the committee was told that the Canadian payments were much smaller as a percentage of the sale than non-competes paid in U.S. Hollinger sales."
11. Also from the Sun-Times: a column by Mark Brown that takes Mr. Thompson to task for his laxity while on the board of Hollinger Int'l: "[I]n the process, Thompson let a lot of people down." The body of the column elaborates on this complaint.
12. The Montreal Gazette has a report by Mary Vallis on Mr. Thompson's testimony so far.
13. The New York Post's Janet Whitman has written a report on the testimony of Marie-Josée Kravis, which includes an admission by her, while being cross-examined by Benito Romano, that it "would have been embarrassing and harmful to [her] business career" to have been fingered as negligent by regulators or litigators for the approval the individual non-compete payments.
14. From "Financial Director," a quick summary.
15. CBC News has webbed a report, focusing on the testimony given under direct, that's credited to the Canadian Press.
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Conrad Black is mentioned as a mainstreamer with regard to the supposed Clark coup attempt of 1934 in a Boston Globe column by Alex Beam, entitled "The dark history of Sterling Clark."
Also, from the Toronto Life Conrad Black trial blog, Douglas Bell noted last night that "Thompson’s cross-examination promises to be a real donnybrook." (No argument with that observation.) Mark Steyn relates that he, along with Christie Blatchford, is rather enjoying the donnybrook so far: "The Canadian contingent on the press benches is rather proud of our thuggish QC: After decades of my-name-is-Joe-and-I-am-a-peacekeeping-wimp maple boosterism, it’s rather heartening to watch Greenspan do to a Chicago courtroom what Rumsfeld did to European Union confabs." Everyone, it seems, has a taste for grandee-bashing.
Even Americans, according to this followup post. It also has a brief description of Mr. Thompson wilting on the stand, and it ends with a depiction of Eric Sussman as nervous when the boss, Patrick Fitzgerald, was around.
1. From Rudolph Bush and David Greising of the Chicago Tribune, a lengthy write-up which reports that Csr. Greenspan suggested that Mr. Thompson himself availed of the facilities offered by Hollinger International. Two perks enjoyed by Mr. Thompson are mentioned which, Csr. Grenspan intimated, were comparable in cost to Barbara Black's birthday party and the Bora Bora Vacation. It notes that Mr. Thompson testified under direct examination that none of the suspicious transactions were approved by the audit committee, and that "Thompson at times came across as obstinate on cross-examination." A slightly briefer version of the same report is webbed here.
2. The San Jose Mercury News has webbed an AP report by Mike Robinson, which discloses that Mr. Thompson testified under cross-examination to staying at Claridge's of London for three days, at Hollinger Int'l's expense, before recounting his testimony made under direct examination.
3. From Law.com, a report that focuses on Mr. Thompson's direct testimony. It discloses that he testified that he depended upon Mark Kipnis to inform him and the rest of the audit committee about each transaction.
4. A New York Times webbing of a Bloomberg report also recounts testimony made under direct examination. It relates that Mr. Thompson answered "No" when asked about all of the non-compete payments made in 1998 and 1999 to entities other than Hollinger Int'l.
5. From the Globe and Mail's "Bar Talk," a note that Csr. Greenspan has shouldered the role of the bad-boy attorney.
6. Also from the Globe, a Christie Blatchford column which begins by noting that "an important prosecution witness was yesterday confronted with an example of his own hand in the corporate cookie jar." Its theme is, the corporate-governance movement doesn't appear that practical-minded when a real would-be hero of the movement shows the everyday casualness, if not laxity, that Mr. Thompson did when audit-committe chair. "In several bizarre exchanges with Mr. Sussman, Mr. Thompson would say flatly, 'I don't recall anything,' and then spend minutes being asked a series of specific questions about whatever meeting or memo he didn't remember in the first place. Unsurprisingly, his answer was usually, 'I don't recall.'" Ms. Blatchford opined that Mr. Thompson's testimony so far, including what was said under cross-examination, has neither helped nor hurt Conrad Black's defense.
7. The Daily Herald of Illinois reports on both the direct and the cross-examination.
8. Rick Westhead of the Toronto Star reports that Mr. Thompson's testimony, that Mr. Black and David Radler worked closely together, "may prove crippling to Black's defence." The article also contains excerpts from the Breeden Report, while noting that it was ruled inadmissible as evidence. An excerpt from it has been webbed by Free Market News.
9. Another report in the Globe, this one by Paul Waldie, focuses upon the testimony made under direct examination.
10. Mary Wisniewski of the Chicago Sun-Times has a report entitled "Thompson: What fees?" From it: "Thompson did approve $26.4 million in non-compete payments to Black, Radler and others in 2000 in relation to the sale of Hollinger's Canadian papers. Thompson said that when the issue first came up, he told Radler that he had never heard of executives being paid personally to sign agreements not to compete with the buyer. Thompson asked for industry precedent.... Radler never gave Thompson the 'comparables' he sought. Instead, the committee was told that the Canadian payments were much smaller as a percentage of the sale than non-competes paid in U.S. Hollinger sales."
11. Also from the Sun-Times: a column by Mark Brown that takes Mr. Thompson to task for his laxity while on the board of Hollinger Int'l: "[I]n the process, Thompson let a lot of people down." The body of the column elaborates on this complaint.
12. The Montreal Gazette has a report by Mary Vallis on Mr. Thompson's testimony so far.
13. The New York Post's Janet Whitman has written a report on the testimony of Marie-Josée Kravis, which includes an admission by her, while being cross-examined by Benito Romano, that it "would have been embarrassing and harmful to [her] business career" to have been fingered as negligent by regulators or litigators for the approval the individual non-compete payments.
14. From "Financial Director," a quick summary.
15. CBC News has webbed a report, focusing on the testimony given under direct, that's credited to the Canadian Press.
----------
Conrad Black is mentioned as a mainstreamer with regard to the supposed Clark coup attempt of 1934 in a Boston Globe column by Alex Beam, entitled "The dark history of Sterling Clark."
Also, from the Toronto Life Conrad Black trial blog, Douglas Bell noted last night that "Thompson’s cross-examination promises to be a real donnybrook." (No argument with that observation.) Mark Steyn relates that he, along with Christie Blatchford, is rather enjoying the donnybrook so far: "The Canadian contingent on the press benches is rather proud of our thuggish QC: After decades of my-name-is-Joe-and-I-am-a-peacekeeping-wimp maple boosterism, it’s rather heartening to watch Greenspan do to a Chicago courtroom what Rumsfeld did to European Union confabs." Everyone, it seems, has a taste for grandee-bashing.
Even Americans, according to this followup post. It also has a brief description of Mr. Thompson wilting on the stand, and it ends with a depiction of Eric Sussman as nervous when the boss, Patrick Fitzgerald, was around.
Tuesday, May 1, 2007
The Verdict: Audit Commentary
After a long hiatus, The Verdict has aired another segment on the Conrad Black trial. The two guests of the host, Paula Todd, were on to discuss the testimony of all three audit committee members, including former Governor James R. Thompson. Perhaps trial coveraged is scheduled by using the crowededness of the spectator's chairs as a metric, because it was mentioned on the show that the spectators' area was filling up. The last two weeks were, according to Hugh Totten, rather dry.
He was one of the guests; Steve Skurka was the other. Csr. Totten started the commentary off by noting that Mr. Thompson is quite a famous personage in Illinois for his crime-busting crusades when a prosecuting attorney, but the younger members of the jury won't remember that, so his past as a crime-fighter may have little influence on his present credibility as a witness. The younger jurors would be likely to remember his service on the 9/11 Commission only.
When asked by Ms. Todd if the testimony of Marie-Josée Kravis hurt Mr. Black's chances, Csr. Skurka replied that Mrs. Kravis' testimony had been a "disaster" for the prosecution. The best line for the defense, he added after a prompting from Ms. Todd, is to claim that the Audit Committee saw the disclosures but are covering up because they're embarrassed or fearful of litigative action directed against them.
Then, an analogy of a jewel theft while the security guard was asleep was introduced by Ms. Todd and accepted by Csr. Totten, who also noted that the witnesses' testimony that Conrad Black was not asleep at the switch was credible. Csr. Skurka, though, noted that disclosure and hiring sharp-eyed professionals is inconsistent with the MO of fraudsters; they conceal. He also noted that the other two had fallen into the assumption that Conrad Black had a case to prove in the trial; the entire defense team doesn't have to, because the burden of proof is on the prosecutors.
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.
He was one of the guests; Steve Skurka was the other. Csr. Totten started the commentary off by noting that Mr. Thompson is quite a famous personage in Illinois for his crime-busting crusades when a prosecuting attorney, but the younger members of the jury won't remember that, so his past as a crime-fighter may have little influence on his present credibility as a witness. The younger jurors would be likely to remember his service on the 9/11 Commission only.
When asked by Ms. Todd if the testimony of Marie-Josée Kravis hurt Mr. Black's chances, Csr. Skurka replied that Mrs. Kravis' testimony had been a "disaster" for the prosecution. The best line for the defense, he added after a prompting from Ms. Todd, is to claim that the Audit Committee saw the disclosures but are covering up because they're embarrassed or fearful of litigative action directed against them.
Then, an analogy of a jewel theft while the security guard was asleep was introduced by Ms. Todd and accepted by Csr. Totten, who also noted that the witnesses' testimony that Conrad Black was not asleep at the switch was credible. Csr. Skurka, though, noted that disclosure and hiring sharp-eyed professionals is inconsistent with the MO of fraudsters; they conceal. He also noted that the other two had fallen into the assumption that Conrad Black had a case to prove in the trial; the entire defense team doesn't have to, because the burden of proof is on the prosecutors.
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.
Tuesday Three-Peat
The Chicago Tribune's Rudoloph Bush, along with David Griesing, have reported that James R. Thompson has taken the stand. He testified, under direct examination, that he was unaware of any geographical division in running Hollinger International, and that Conrad Black and David Radler "seemed to have complete knowledge of Hollinger's inner workings: 'They ran the business as a duo as far as I could tell,... they seemed to be aware of what the other person was doing in the company'" Mr. Thompson also testified that he was "never made aware" of the $2 million non-compete fee that came with the American Trucker transaction, and that Hollinger Int'l should have gotten all of the non-compete fee for the sale of 45 newspaper properties to Community Newspaper Holdings, Inc., instead of part of it going to a "'related party.'"
The Associated Press has a report out, written by Mike Robinson and webbed by the Belleville News-Democrat. It relates that Mr. Thompson testified that all of the non-compete payments, including the ones attached to the sale to CanWest, should have gone to Hollinger Int'l. He also testified that he and the other directors found out about the $2 million non-compete payment going to Hollinger Inc. "'[m]uch later,...' Pressed by Sussman to be more specific, Thompson said it was only after the board of directors rebelled against Black's management and launched an outside investigation of the company." Regarding the $12 million non-compete payment, he testified that "the audit committee should have been told," and that "he was never told about" that payment also, nor about the one attached to the sale to Horizon. The report also says the Mr. Thompson "seemed relaxed and affable" as he took the stand. (It's also been webbed by ABC7 Chicago; WQAD.com has a summary of it.)
The Scotsman has webbed Reuters' report, written by Andrew Stern. It starts off by noting that Mr. Thompson's testimony, that Conrad Black and David Radler were a close team, is aimed at striking the heart of the defense's theory - the only party responsible for any illegal activities in Hollinger Int'l was Mr. Radler. Mr. Thompson also testified that he never saw any change in Mr. Black's and Mr. Radler's business relationship during the entire time he was a member of Hollinger Int'l's board.
The United Press also has a brief report on Mr. Thompson's testimony today, as webbed by EarthTimes.org. It ends with this excerpt from his testimony: "'They didn't advise us,' Thompson said in court. 'They ran the business as a duo, as far as I can see.'"
A report by Mary Vallis, webbed by Canada.com, has details on the cross-examination with a recap of the direct laced in. After noting that Mr. Thompson testified to largely the same information that the other two members of the audit committee did, the report discloses some admissions he made while being cross-examined by Eddie Greenspan. He stipulated that he had only "'skimmed'" the documents he had signed, a point anticipated in the direct examination of him by Eric Sussman: "'If anything was amiss, in any of them, I would have assumed they would point it out,' Thompson said." It also notes that, after Mr. Thompson has said that the audit committee was a "'pretty democratic'" one when explaining that he wasn't exactly a take-charge guy while there, Csr Greespan responded, "Even in a democracy, someone has to be governor.'"
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Mark Steyn, in his latest blog post, characterized former Gov. Thompson as a "hugely impressive witness," and one who isn't a walking archetype of wealth and glamour. Nevertheless, Mr. Steyn is convinced that the Wells notice that all three audit committee members were served with in late 2005 will constructively impugn Mr. Thompson's testimony.
The Associated Press has a report out, written by Mike Robinson and webbed by the Belleville News-Democrat. It relates that Mr. Thompson testified that all of the non-compete payments, including the ones attached to the sale to CanWest, should have gone to Hollinger Int'l. He also testified that he and the other directors found out about the $2 million non-compete payment going to Hollinger Inc. "'[m]uch later,...' Pressed by Sussman to be more specific, Thompson said it was only after the board of directors rebelled against Black's management and launched an outside investigation of the company." Regarding the $12 million non-compete payment, he testified that "the audit committee should have been told," and that "he was never told about" that payment also, nor about the one attached to the sale to Horizon. The report also says the Mr. Thompson "seemed relaxed and affable" as he took the stand. (It's also been webbed by ABC7 Chicago; WQAD.com has a summary of it.)
The Scotsman has webbed Reuters' report, written by Andrew Stern. It starts off by noting that Mr. Thompson's testimony, that Conrad Black and David Radler were a close team, is aimed at striking the heart of the defense's theory - the only party responsible for any illegal activities in Hollinger Int'l was Mr. Radler. Mr. Thompson also testified that he never saw any change in Mr. Black's and Mr. Radler's business relationship during the entire time he was a member of Hollinger Int'l's board.
The United Press also has a brief report on Mr. Thompson's testimony today, as webbed by EarthTimes.org. It ends with this excerpt from his testimony: "'They didn't advise us,' Thompson said in court. 'They ran the business as a duo, as far as I can see.'"
A report by Mary Vallis, webbed by Canada.com, has details on the cross-examination with a recap of the direct laced in. After noting that Mr. Thompson testified to largely the same information that the other two members of the audit committee did, the report discloses some admissions he made while being cross-examined by Eddie Greenspan. He stipulated that he had only "'skimmed'" the documents he had signed, a point anticipated in the direct examination of him by Eric Sussman: "'If anything was amiss, in any of them, I would have assumed they would point it out,' Thompson said." It also notes that, after Mr. Thompson has said that the audit committee was a "'pretty democratic'" one when explaining that he wasn't exactly a take-charge guy while there, Csr Greespan responded, "Even in a democracy, someone has to be governor.'"
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Mark Steyn, in his latest blog post, characterized former Gov. Thompson as a "hugely impressive witness," and one who isn't a walking archetype of wealth and glamour. Nevertheless, Mr. Steyn is convinced that the Wells notice that all three audit committee members were served with in late 2005 will constructively impugn Mr. Thompson's testimony.
Media Roundup: Did He Bring Her Down?
As you may expect, the overnight webbed media reports on the Conrad Black trial concentrated on the fiery exchange between Eddie Greenspan and Marie-Josée Kravis:
1. From the Chicago Tribune, Rudolph Bush reports that Mrs. Kravis "underwent nearly seven hours of often blistering cross-examination." It also mentions the relatively quieter cross-examination of Ron Safer, Mark Kipnis' counsel.
2. Conrad Black biographer Richard Siklos, in the New York Times, reports on Mrs. Kravis' memory lapses, but also notes that she testified, "questions were not asked because some transactions brought before the committee were presented as noncompetition agreements rather than as related-party transactions, which might have drawn closer scrutiny." His report also covers the direct- and cross-examination relating to the Bora Bora vacation and Mrs. Black's 60th birthday party. With repect to the former, Mrs. Kravis stipulated that Hollinger Int'l had no formal policy regarding the use of any corporate jets, but "'it was the law'" that the company followed, a statement which Mr. Greenspan looked puzzled at. It also notes that Mrs. Kravis was one of the co-hosts of a 2003 book launch party for Mr. Black, at a time when a cloud was growing over his head in NYC society. The same article has been entered into NYT's "Deal Book" blog.
3. From Chicago Public Radio, a brief note that former Gov. Thompson is expected to testify today.
4. From MSNBC.com, an FT report on yesterday's cross-examination, which starts off with Mrs. Kravis' admission that she missed 11 disclosures of the individual non-compete payments. Richard Burt's similar omissions are tied in with Mrs Kravis', and the following point is made: "While the government has said the payments were not, as Lord Black and others have insisted, paid to the individuals at the behest of third-party buyers, the fact that Mrs Kravis and other directors repeatedly missed disclosures of the payments in drafts of financial statements and in annual reports has complicated its case."
5. The Sydney Morning Herald has a lengthy report on yesterday's testimony and drama.
6. The events of yesterday have reached the notice of the Grand Cayman Island's Caymanian Compass.
7. From the Ottawa Citizen, a report that focuses upon the "fireworks" between Mrs. Kravis and Csr. Greenspan in yesterdays' cross-examination. It notes that "Mr. Greenspan began questioning Ms. Kravis so quickly she didn't have time to finish answering his questions. The pair's voices rose until the judge intervened." An expanded version of the same report has been webbed by the National Post, which includes, amongst other added details, Csr. Greenspan making the point that the 1998 sale of American Trucker was also a related-party transaction. Both versions have a quip from Eddie Greenspan near the end: "Isn't it true that if Conrad had not signed the non-compete agreement, Asper could have been burnt to a crisp by the Sun, correct?" Both also note that "Ms. Kravis did not appear to find the metaphor amusing."
8. Paul Waldie of the Globe and Mail has a report that begins with: "Toronto lawyer Edward Greenspan has always had a reputation for aggressive cross-examinations and yesterday he put his rough style to work on Marie-Josée Kravis." In addition to the part of the questioning that led to the admonishments of him from Judge St. Eve, it also mentions that "Mr. Greenspan grew testy on several occasions when Ms. Kravis tried to challenge him." The report also notes the prosecution's argument that the defendants had lied to the board, which had caused the omissions of throroughness by the audit committee members.
9. The Toronto Star's Rick Westhead's write-up starts with a report on Csr. Greenspan's cross-examination and, near the end of it, fills in some detail about the prosecution's claim that the defendants lied to the committee: "Kravis...told the court that in every case where non-compete payments had been made, the audit committee had been told that buyers of Hollinger's newspapers had demanded them." At its end, the report notes that Eric Sussman supplied detail of the prosecution obstruction-of-justice charge, which relates to the removal of those 13 boxes from Hollinger Inc's head office. "Sussman said former Hollinger Inc. board member Donald Vale has told the government he initially allowed the removal of the boxes because he believed their contents had already been recorded and copied."
10. AccountancyAge.com has a brief write-up on Mrs. Kravis' entire testimony so far.
11. Another report by the Globe's Mr. Waldie has a profile on James R. Thompson, the third and final member of Hollinger Int'l's audit committee, who is slated to testify today. At the end of it, he also mentions a non-disclosure scandal involving the current CEO of Sun-Times Media Group, the new name for Hollinger Int'l.
[Eight] paragraphs have been added to the bottom of the same report, with details on the cross-examination of Mrs. Kravis by Benito Romano, defense counsel for Peter Atkinson. He accused her of changing her view of events so as to escape from an SEC investigation. "Mr. Romano pointed out what he said were inconsistencies between what Ms. Kravis told investigators in early 2005, before the SEC probe, and what she has said during the trial."
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Mark Steyn explains Eddie Greenspan's bringing up of the American Trucker transaction in his latest trial blog entry: "'But you never told the jury that it was your husband’s company Primedia that bought American Trucker?'" After this question was objected to by Julie Ruder on the grounds of relevance, "'Relevance?' said Greenspan in disbelief. Mrs Kravis has been sold as the Impartial Arbiter of Related-Party Transactions but her husband Henry’s deal with the company his wife’s a director of – a $76 million related-party transaction – is not relevant?" At this point, Mr. Steyn contented himself with a note that the American justice system seems a little out of balance when compared with the U.K's.
1. From the Chicago Tribune, Rudolph Bush reports that Mrs. Kravis "underwent nearly seven hours of often blistering cross-examination." It also mentions the relatively quieter cross-examination of Ron Safer, Mark Kipnis' counsel.
2. Conrad Black biographer Richard Siklos, in the New York Times, reports on Mrs. Kravis' memory lapses, but also notes that she testified, "questions were not asked because some transactions brought before the committee were presented as noncompetition agreements rather than as related-party transactions, which might have drawn closer scrutiny." His report also covers the direct- and cross-examination relating to the Bora Bora vacation and Mrs. Black's 60th birthday party. With repect to the former, Mrs. Kravis stipulated that Hollinger Int'l had no formal policy regarding the use of any corporate jets, but "'it was the law'" that the company followed, a statement which Mr. Greenspan looked puzzled at. It also notes that Mrs. Kravis was one of the co-hosts of a 2003 book launch party for Mr. Black, at a time when a cloud was growing over his head in NYC society. The same article has been entered into NYT's "Deal Book" blog.
3. From Chicago Public Radio, a brief note that former Gov. Thompson is expected to testify today.
4. From MSNBC.com, an FT report on yesterday's cross-examination, which starts off with Mrs. Kravis' admission that she missed 11 disclosures of the individual non-compete payments. Richard Burt's similar omissions are tied in with Mrs Kravis', and the following point is made: "While the government has said the payments were not, as Lord Black and others have insisted, paid to the individuals at the behest of third-party buyers, the fact that Mrs Kravis and other directors repeatedly missed disclosures of the payments in drafts of financial statements and in annual reports has complicated its case."
5. The Sydney Morning Herald has a lengthy report on yesterday's testimony and drama.
6. The events of yesterday have reached the notice of the Grand Cayman Island's Caymanian Compass.
7. From the Ottawa Citizen, a report that focuses upon the "fireworks" between Mrs. Kravis and Csr. Greenspan in yesterdays' cross-examination. It notes that "Mr. Greenspan began questioning Ms. Kravis so quickly she didn't have time to finish answering his questions. The pair's voices rose until the judge intervened." An expanded version of the same report has been webbed by the National Post, which includes, amongst other added details, Csr. Greenspan making the point that the 1998 sale of American Trucker was also a related-party transaction. Both versions have a quip from Eddie Greenspan near the end: "Isn't it true that if Conrad had not signed the non-compete agreement, Asper could have been burnt to a crisp by the Sun, correct?" Both also note that "Ms. Kravis did not appear to find the metaphor amusing."
8. Paul Waldie of the Globe and Mail has a report that begins with: "Toronto lawyer Edward Greenspan has always had a reputation for aggressive cross-examinations and yesterday he put his rough style to work on Marie-Josée Kravis." In addition to the part of the questioning that led to the admonishments of him from Judge St. Eve, it also mentions that "Mr. Greenspan grew testy on several occasions when Ms. Kravis tried to challenge him." The report also notes the prosecution's argument that the defendants had lied to the board, which had caused the omissions of throroughness by the audit committee members.
9. The Toronto Star's Rick Westhead's write-up starts with a report on Csr. Greenspan's cross-examination and, near the end of it, fills in some detail about the prosecution's claim that the defendants lied to the committee: "Kravis...told the court that in every case where non-compete payments had been made, the audit committee had been told that buyers of Hollinger's newspapers had demanded them." At its end, the report notes that Eric Sussman supplied detail of the prosecution obstruction-of-justice charge, which relates to the removal of those 13 boxes from Hollinger Inc's head office. "Sussman said former Hollinger Inc. board member Donald Vale has told the government he initially allowed the removal of the boxes because he believed their contents had already been recorded and copied."
10. AccountancyAge.com has a brief write-up on Mrs. Kravis' entire testimony so far.
11. Another report by the Globe's Mr. Waldie has a profile on James R. Thompson, the third and final member of Hollinger Int'l's audit committee, who is slated to testify today. At the end of it, he also mentions a non-disclosure scandal involving the current CEO of Sun-Times Media Group, the new name for Hollinger Int'l.
[Eight] paragraphs have been added to the bottom of the same report, with details on the cross-examination of Mrs. Kravis by Benito Romano, defense counsel for Peter Atkinson. He accused her of changing her view of events so as to escape from an SEC investigation. "Mr. Romano pointed out what he said were inconsistencies between what Ms. Kravis told investigators in early 2005, before the SEC probe, and what she has said during the trial."
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Mark Steyn explains Eddie Greenspan's bringing up of the American Trucker transaction in his latest trial blog entry: "'But you never told the jury that it was your husband’s company Primedia that bought American Trucker?'" After this question was objected to by Julie Ruder on the grounds of relevance, "'Relevance?' said Greenspan in disbelief. Mrs Kravis has been sold as the Impartial Arbiter of Related-Party Transactions but her husband Henry’s deal with the company his wife’s a director of – a $76 million related-party transaction – is not relevant?" At this point, Mr. Steyn contented himself with a note that the American justice system seems a little out of balance when compared with the U.K's.
Monday, April 30, 2007
Monday's testimony
Paul Waldie of the Globe and Mail has a report out on the cross-examination of Marie-Josée Kravis. It notes that Edward Greenspan tried taking Mrs. Kravitz to task, after the report relates the more detailed cross-examination of Patrick Tuite. As prompted by the latter's cross, "Ms. Kravis said that she did not notice a paragraph in an annual mailing to shareholders in 2002 that outlined several non-competition payments paid to Lord Black and other executives."
An updated version of the same report has more details on Csr. Greenspan's forthright cross-examination: "'We just can't rely on your memory for anything,' Mr. Greenspan said after asking Ms. Kravis about a document that she could not remember seeing." The updated report ends with Judge St. Eve chiding Csr. Greenspan for arguing with the witness, after intervening at a point when "Mr. Greenspan and Ms. Kravis were nearly shouting at each other."
On a BNN interview, aired at 1:55 PM ET, Mr. Waldie reported that Mrs. Kravis faced some "really aggressive questioning" from Csr. Greenspan. He showed her, by his count, eleven documents in which the individual non-compete payments were disclosed. Judge St. Eve admonished Csr. Greenspan twice for arguing with the witness. He's almost finished, as of the end of the morning, but more cross-examination of Mrs. Kravis is coming this afternoon. It's almost certain that David Radler will not be on the stand this week. Former Gov. Thompson will probably be on the stand for the rest of the week, as he was the chair of the Hollinger International audit committee. After him, a relatively unimportant witness is scheduled, and then Mr. Radler will appear.
A report from Bloomberg is out, written by Andrew Harris and Bob Van Voris. It discloses that the Hollinger Int'l "audit committee kept watch over company finances for four years without any financial experts," according to Mrs. Kravis' testimony under cross-examination. The report does note that "Kravis said the board members were financially literate while not having any specific accounting or financial management expertise" - even though having an expert on the board with "financial experience [was] required by its governing charter." The first expert fitting this criterion was Gordon Paris. [An updated version reports that Mrs. Kravis testified, with regard to the documents shown her, that the individual non-competes "'were only partly disclosed in most of those cases.''']
WQAD.com has webbed a brief Associated Press report, which describes the spat between Csr. Greenspan and Mrs. Kravis as "a testy courtroom duel." A version with some background added has been webbed by 680 News.
The report from Reuters has been webbed too; it starts off with a description of Csr. Greenspan "repeatedly [shouting] down" Mrs. Kravis and ends with him saying to her, after being rebuked by Judge St. Eve for doing so, "'I won't [argue] if you won't." It concludes by passing along Mr. Greenspan's point, made in his cross-examination of her, that her fiduciary duty as a board and audit-committee member made it reasonable to expect her to read those eleven documents he had shown her in court during his cross, whether or not the individual non-compete payments were brought up to the committee orally by Mr. Black.
An updated version ends with a question by Csr. Greenspan which makes the point that Mr. Asper requesting the individual non-compete agreement was reasonable: "Asper wrote of his concerns that Black would buy the Toronto Sun and related newspapers in cities across Canada.... Kravis responded that she did not understand the [associated] question."
AP also has a "Summary Box" with one paragraph covering today's cross-examination of Mrs. Kravis and the next noting that the cross-examination will continue tomorrow.
And finally, the Telegraph has a report out on today's trial action, which starts with Patrick Tuite's cross-examaination of Mrs. Kravis and briefly recounts Csr. Greenspan's fireworks-ridden questioning. It specifies that she "acknowledged to the jury in Lord Black's fraud trial yesterday that she did not completely read a key company document.'
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Yes, Mark Steyn has jumped right on the sparring match between Csr. Greenspan and Mrs. Kravis. He makes an interesting note near the end of his latest trial-blog post about the prosecution team's apparent lack of class consciousness.
An updated version of the same report has more details on Csr. Greenspan's forthright cross-examination: "'We just can't rely on your memory for anything,' Mr. Greenspan said after asking Ms. Kravis about a document that she could not remember seeing." The updated report ends with Judge St. Eve chiding Csr. Greenspan for arguing with the witness, after intervening at a point when "Mr. Greenspan and Ms. Kravis were nearly shouting at each other."
On a BNN interview, aired at 1:55 PM ET, Mr. Waldie reported that Mrs. Kravis faced some "really aggressive questioning" from Csr. Greenspan. He showed her, by his count, eleven documents in which the individual non-compete payments were disclosed. Judge St. Eve admonished Csr. Greenspan twice for arguing with the witness. He's almost finished, as of the end of the morning, but more cross-examination of Mrs. Kravis is coming this afternoon. It's almost certain that David Radler will not be on the stand this week. Former Gov. Thompson will probably be on the stand for the rest of the week, as he was the chair of the Hollinger International audit committee. After him, a relatively unimportant witness is scheduled, and then Mr. Radler will appear.
A report from Bloomberg is out, written by Andrew Harris and Bob Van Voris. It discloses that the Hollinger Int'l "audit committee kept watch over company finances for four years without any financial experts," according to Mrs. Kravis' testimony under cross-examination. The report does note that "Kravis said the board members were financially literate while not having any specific accounting or financial management expertise" - even though having an expert on the board with "financial experience [was] required by its governing charter." The first expert fitting this criterion was Gordon Paris. [An updated version reports that Mrs. Kravis testified, with regard to the documents shown her, that the individual non-competes "'were only partly disclosed in most of those cases.''']
WQAD.com has webbed a brief Associated Press report, which describes the spat between Csr. Greenspan and Mrs. Kravis as "a testy courtroom duel." A version with some background added has been webbed by 680 News.
The report from Reuters has been webbed too; it starts off with a description of Csr. Greenspan "repeatedly [shouting] down" Mrs. Kravis and ends with him saying to her, after being rebuked by Judge St. Eve for doing so, "'I won't [argue] if you won't." It concludes by passing along Mr. Greenspan's point, made in his cross-examination of her, that her fiduciary duty as a board and audit-committee member made it reasonable to expect her to read those eleven documents he had shown her in court during his cross, whether or not the individual non-compete payments were brought up to the committee orally by Mr. Black.
An updated version ends with a question by Csr. Greenspan which makes the point that Mr. Asper requesting the individual non-compete agreement was reasonable: "Asper wrote of his concerns that Black would buy the Toronto Sun and related newspapers in cities across Canada.... Kravis responded that she did not understand the [associated] question."
AP also has a "Summary Box" with one paragraph covering today's cross-examination of Mrs. Kravis and the next noting that the cross-examination will continue tomorrow.
And finally, the Telegraph has a report out on today's trial action, which starts with Patrick Tuite's cross-examaination of Mrs. Kravis and briefly recounts Csr. Greenspan's fireworks-ridden questioning. It specifies that she "acknowledged to the jury in Lord Black's fraud trial yesterday that she did not completely read a key company document.'
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Yes, Mark Steyn has jumped right on the sparring match between Csr. Greenspan and Mrs. Kravis. He makes an interesting note near the end of his latest trial-blog post about the prosecution team's apparent lack of class consciousness.
Media Roundup: Preparing For The Rest Of The Audit Committee
There were two stories on the Conrad Black trial webbed overnight by media Websites, both anticipating today's testimony:
1. From the Hamilton Spectator, a write-up that begins by noting: "Prosecutors face a pivotal week in the fraud trial of Conrad Black, as they try to persuade jurors that he misled a number of high- profile directors." A longer version of the same report has been webbed by the Toronto Sun.
2. From Canoe CNews, an anticipatory note about the appearance of the biggest-name witness so far, former Illinois governor James R. Thompson. He's slated to appear once the cross-examination of Marie-Josée Kravis is over.
1. From the Hamilton Spectator, a write-up that begins by noting: "Prosecutors face a pivotal week in the fraud trial of Conrad Black, as they try to persuade jurors that he misled a number of high- profile directors." A longer version of the same report has been webbed by the Toronto Sun.
2. From Canoe CNews, an anticipatory note about the appearance of the biggest-name witness so far, former Illinois governor James R. Thompson. He's slated to appear once the cross-examination of Marie-Josée Kravis is over.
Sunday, April 29, 2007
Review of “Rampaging Bulls: Outfox Promoters At Their Own Game On Any Penny Stock Market”
Rampaging Bulls: Outfox promoters at their own game on any penny stock market is an oddity, which can only be chalked up to the Albertan roots of its author, Alexander Tadich. It’s a well-branded book, full of gut-level advice on the obstacles any penny-stock trader will face; its goal, expressed clearly and reinforced repeatedly, is to help the penny-stock speculator avoid losses and make major profits. When described this way, the book’s contents sound like part of a standard category. What makes it idiosyncratic is the author revealing a definite moralist streak, expressed in words that could have come out of Newsweek in its tub-thumping moments.
Until a penny-stock analysis plan is revealed near the end, the book takes the form of a fictional narrative, whose details centre around a fictional promotion of a company called “B.H. Beane International” with a fictional product under development. Since the author’s thesis is that promotional strength counts for far more than company fundamentals in the penny-stock market, the narrative centers around the machinations of the fictional promoter of that company, Bob Holstein. Holstein is an archetypical “Rampaging Bull,” a master promoter whose character flaws make for a lousy manager, and a person who is too untrustworthy to be a friend. In addition to the main narrative, individual chapters are devoted to short stories illustrating other kinds of companies that trade on penny-stock exchanges and to “Mother’s Tongues Lashings,” full of advice on how to acquire the personal skills to be a successful penny-stock trader. The underlying companies of these stocks, to pass along a point, typically have neither revenues nor earnings, except for bank interest on cash in hand.
Mr. Tadich has seven categories for penny-stock companies: “Waiting for Godot,” covering penny stocks that hardly trade (and when they do, they trade in pennies per share) because they have nothing that a promoter, or speculator, would be interested in; “Criminal Incompetents,” for penny stocks that are promoted by garden-variety con men; the atypical “Minor Achievement,” for penny stocks of companies that are thriving small businesses with big dreams but not much growth potential; “The Good Try,” which is a company that does not become established as a money-maker but makes most of the right moves to becoming a growth company with real earnings; “Rampaging Bull’s Company,” which has serious potential to be a major promotion but little hope of becoming a thriving company; “Successful Entrepreneur,” a penny-stock company that does make the transition to one with revenues and earnings; and, the author’s Holy Grail, the “Warriorpreneur,” who has the ability to turn a promising penny stock into a major growth company.
The central lesson in this book, rubbed in frequently, is that the trader who doesn’t know what (s)he doesn’t know is hapless, and concomitantly easily suckered. The relevant needed knowledge is found in a psychological profile of the promoter, who occupies a gray area between a booster and a con man. Mr. Tadich fingers the promoter gone wrong as a “malignant narcissist,” as defined by the symptoms for Narcissistic Personality Disorder. Knowing how malignant narcissists tick is the major stumbling block between penny-stock-speculator haplessness and speculator competence. Only when this crucial entry barrier has been overcome can the relevant data be interpreted properly.
Mr. Tadich’s own psychological profile of the malignant narcissist in business has five facets: “Fearful and Greedy,” resulting in a person who can tap into others’ fear and greed; “Angry Rage,” which keeps subordinates fearful; “Vain and Critical,” with the notable exception of any self-criticism; “Courageous and Blunt,” as well as psychologically perceptive; a “Deepest Need” conflict between the need to be feared and the need to be loved. These character flaws add up to a character who, no matter how hard (s)he tries, can never rise above short-term opportunism. (In this context, “short term” means downright impulsive.)
Mr. Tadich knows full well that this personality pattern is far from being confined to out-of-the-way speculative companies. On pp. 85-6, he supplies a checklist of corporate symptoms that emerge when a Rampaging Bull heads up a senior company:
- top executive salaries that are 100-500 times that of the average worker in that company;
- “deep plush carpets in executive offices;”
- low-level employees battling for even minimum salary increases;
- if unionized, bad labor relations prompted by managerial arrogance;
- suspiciously high turnover of innovative employees;
- a control structure that forces innovators into servants’ quarters;
- product lines quietly rusting away;
- “strange diversifications that contradict the company’s philosophy;”
- a corporate culture of fear and not of excitement;
- overly formalized communication between managerial ranks;
- “irrational decisions and strange changes in company direction;”
- “recruitment of overly ambitious and/or violence-prone managers;”
- a public-relations policy of ingratiation. followed by either taking for granted or outright abuse for a group that is in the fold;
- a cultish practice of systemic mendaciousness to outsiders;
- “virulent anti-union attitudes;”
- “over emphasis on secrecy and security;”
- a gulf profound between management and staff.
If you’re interested, the snippet from this book that most closely matches Hollinger International, as described by the Special Committee report, is from the end of the section on “Minor Achievement” companies, provided that “earnings” are substituted for “revenues.” To wit, from p. 71:
“You should not invest in a public company whose revenues are steady, small, and only cover salaries for top managers. The share price will not increase soon. This company exists for the sole purpose of providing an easy living for its managers. If you look closely, you’ll be amazed at how common these companies are.”
As a trivia note, global warming intrudes in the B.H. Beane story, on pp. 155-7. Not bad for a book first published in 1992.
----------
There are two Websites that show a deep understanding of Narcissistic Peronality Disorder, and are both well worth going through carefully:
1. An outsider's view of the disorder by Joanna Ashmun, which contains the insight that NPD sufferes act like normal six-year-olds;
2. An insider's view by Sam Vaknin, Ph.D., which contains the crucial concept of the "false self," one that has to be continually reinforced by further intake of "narcissistic supply," to which the NPD sufferer is beholden.
Until a penny-stock analysis plan is revealed near the end, the book takes the form of a fictional narrative, whose details centre around a fictional promotion of a company called “B.H. Beane International” with a fictional product under development. Since the author’s thesis is that promotional strength counts for far more than company fundamentals in the penny-stock market, the narrative centers around the machinations of the fictional promoter of that company, Bob Holstein. Holstein is an archetypical “Rampaging Bull,” a master promoter whose character flaws make for a lousy manager, and a person who is too untrustworthy to be a friend. In addition to the main narrative, individual chapters are devoted to short stories illustrating other kinds of companies that trade on penny-stock exchanges and to “Mother’s Tongues Lashings,” full of advice on how to acquire the personal skills to be a successful penny-stock trader. The underlying companies of these stocks, to pass along a point, typically have neither revenues nor earnings, except for bank interest on cash in hand.
Mr. Tadich has seven categories for penny-stock companies: “Waiting for Godot,” covering penny stocks that hardly trade (and when they do, they trade in pennies per share) because they have nothing that a promoter, or speculator, would be interested in; “Criminal Incompetents,” for penny stocks that are promoted by garden-variety con men; the atypical “Minor Achievement,” for penny stocks of companies that are thriving small businesses with big dreams but not much growth potential; “The Good Try,” which is a company that does not become established as a money-maker but makes most of the right moves to becoming a growth company with real earnings; “Rampaging Bull’s Company,” which has serious potential to be a major promotion but little hope of becoming a thriving company; “Successful Entrepreneur,” a penny-stock company that does make the transition to one with revenues and earnings; and, the author’s Holy Grail, the “Warriorpreneur,” who has the ability to turn a promising penny stock into a major growth company.
The central lesson in this book, rubbed in frequently, is that the trader who doesn’t know what (s)he doesn’t know is hapless, and concomitantly easily suckered. The relevant needed knowledge is found in a psychological profile of the promoter, who occupies a gray area between a booster and a con man. Mr. Tadich fingers the promoter gone wrong as a “malignant narcissist,” as defined by the symptoms for Narcissistic Personality Disorder. Knowing how malignant narcissists tick is the major stumbling block between penny-stock-speculator haplessness and speculator competence. Only when this crucial entry barrier has been overcome can the relevant data be interpreted properly.
Mr. Tadich’s own psychological profile of the malignant narcissist in business has five facets: “Fearful and Greedy,” resulting in a person who can tap into others’ fear and greed; “Angry Rage,” which keeps subordinates fearful; “Vain and Critical,” with the notable exception of any self-criticism; “Courageous and Blunt,” as well as psychologically perceptive; a “Deepest Need” conflict between the need to be feared and the need to be loved. These character flaws add up to a character who, no matter how hard (s)he tries, can never rise above short-term opportunism. (In this context, “short term” means downright impulsive.)
Mr. Tadich knows full well that this personality pattern is far from being confined to out-of-the-way speculative companies. On pp. 85-6, he supplies a checklist of corporate symptoms that emerge when a Rampaging Bull heads up a senior company:
- top executive salaries that are 100-500 times that of the average worker in that company;
- “deep plush carpets in executive offices;”
- low-level employees battling for even minimum salary increases;
- if unionized, bad labor relations prompted by managerial arrogance;
- suspiciously high turnover of innovative employees;
- a control structure that forces innovators into servants’ quarters;
- product lines quietly rusting away;
- “strange diversifications that contradict the company’s philosophy;”
- a corporate culture of fear and not of excitement;
- overly formalized communication between managerial ranks;
- “irrational decisions and strange changes in company direction;”
- “recruitment of overly ambitious and/or violence-prone managers;”
- a public-relations policy of ingratiation. followed by either taking for granted or outright abuse for a group that is in the fold;
- a cultish practice of systemic mendaciousness to outsiders;
- “virulent anti-union attitudes;”
- “over emphasis on secrecy and security;”
- a gulf profound between management and staff.
If you’re interested, the snippet from this book that most closely matches Hollinger International, as described by the Special Committee report, is from the end of the section on “Minor Achievement” companies, provided that “earnings” are substituted for “revenues.” To wit, from p. 71:
“You should not invest in a public company whose revenues are steady, small, and only cover salaries for top managers. The share price will not increase soon. This company exists for the sole purpose of providing an easy living for its managers. If you look closely, you’ll be amazed at how common these companies are.”
As a trivia note, global warming intrudes in the B.H. Beane story, on pp. 155-7. Not bad for a book first published in 1992.
----------
There are two Websites that show a deep understanding of Narcissistic Peronality Disorder, and are both well worth going through carefully:
1. An outsider's view of the disorder by Joanna Ashmun, which contains the insight that NPD sufferes act like normal six-year-olds;
2. An insider's view by Sam Vaknin, Ph.D., which contains the crucial concept of the "false self," one that has to be continually reinforced by further intake of "narcissistic supply," to which the NPD sufferer is beholden.
Media Roundup: Sunday Dearth
The only report that's been webbed overnight on the Conrad Black trial is from the Irish Independent, entitled "Many grey areas in the trial of Black, the colourful tycoon." It's only available to registered users.
Another report has been webbed today, which spells out what the prosecution has to do this week to keep the case alive. It's by Romina Maurino, and has been webbed by Canada.com. Its theme is that, in order to successfully press the case, the prosecutors have to show intent. Ostensibly, the prosecutorial team has picked it up, now that the audit committee is testifying, but they still face a real stumbling block: how can they prove that those three knowledgable individuals were dupes? As Steve Skurka puts it, "'These aren’t the [Flintstones], these are fairly sophisticated, astute people'”. Another authority quoted in this piece, James Morton, points out near the end that the scenario unfolding "'really does seem to be taking a Shakespearean atmosphere: You have the great man surrounded by courtiers [that had enjoyed his largesse during good times] who, now that he’s in trouble, are abandoning him.'" The first seven paragraphs of this report have been webbed by LawFuel.com.
Another report has been webbed today, which spells out what the prosecution has to do this week to keep the case alive. It's by Romina Maurino, and has been webbed by Canada.com. Its theme is that, in order to successfully press the case, the prosecutors have to show intent. Ostensibly, the prosecutorial team has picked it up, now that the audit committee is testifying, but they still face a real stumbling block: how can they prove that those three knowledgable individuals were dupes? As Steve Skurka puts it, "'These aren’t the [Flintstones], these are fairly sophisticated, astute people'”. Another authority quoted in this piece, James Morton, points out near the end that the scenario unfolding "'really does seem to be taking a Shakespearean atmosphere: You have the great man surrounded by courtiers [that had enjoyed his largesse during good times] who, now that he’s in trouble, are abandoning him.'" The first seven paragraphs of this report have been webbed by LawFuel.com.
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