Conrad Black: Let the vengeance begin

His release on bail and rising legal fortunes could help his defamation lawsuits against his accusers

M. Spencer Green/AP

It has been a good summer for Conrad Black. He won a key victory at the U.S. Supreme Court that could help overturn his fraud convictions and, this week, managed to secure his release on bail from a Florida prison. For Black’s accusers, though, the mood is likely less jubilant. With several defamation lawsuits already filed, Black has been promising vengeance on those who played a role in his downfall—and his moment of retribution appears to be drawing closer.

Black still has a way to go before he can claim complete vindication, but experts say those who dismissed his flurry of litigation as long as he languished in jail might want to think again. “If you’re convicted of a crime, that makes it very difficult to win any defamation lawsuits,” says Peter Henning, a professor at Wayne State University Law School and a former attorney with the U.S. Securities and Exchange Commission. “If Black can get his convictions reversed that puts him in a much better position.”

High on Black’s hit list are members of a special committee of Hollinger International that delivered a scathing report accusing him of running a “corporate kleptocracy” allowing him and his underlings to make off with some US$400 million. However, the gap between the allegations in the report written by Richard Breeden, a former chairman of the SEC, and reality (as determined by the U.S. legal system) continues to grow wider. While Black originally faced 13 charges that alleged a theft of US$60 million, he was only convicted of three counts of fraud totalling US$2.9 million—plus one obstruction of justice charge related to his removing of boxes from his Toronto office. “That alone demonstrates that there may not be a lot of truth in the allegations and the libels in the Breeden report,” says Earl Cherniak, a Toronto lawyer who is acting on behalf of Black in the libel suits filed in Ontario.

And if Black is ultimately acquitted of all charges, he adds, “then the fact that he’s been convicted of nothing certainly doesn’t hurt his libel case.” Breeden could not be reached for comment, according to a representative.

The defendants in the suit appeared before the Court of Appeal for Ontario this spring in an attempt to have the action moved out of Ontario, where only one of them lives (and where libel laws are more favourable to plaintiffs than in the United States). Cherniak, however, says the province was chosen because of Black’s close connection to the region and the overwhelming media interest in his case among Canadians. “Just read today’s newspapers and look at last night’s news programs,” he said, the day after Black’s bail was granted. The appeal court has yet to give its ruling on whether the suit can move forward.

Black may also be keen to resurrect an $11-million suit, also filed in Ontario, against British author Tom Bower, who wrote the book Conrad & Lady Black: Dancing on the Edge, which painted an unflattering picture of Black and his wife, Barbara Amiel. Black responded in a Daily Telegraph column: “Almost every factual assertion . . . in Tom Bower’s malicious novel about my wife and me is false (and many are defamatory), except for the quotation from my emails to him, predicting that he would write a libellous onslaught, and declining his repeated, fawning pleas for an interview.” Bower later wrote in the Sunday Times about his battles with Black, recapping the moment the businessman’s guilty verdict was delivered: “Finally, the man who thought that the truth could be concealed by lies had been exposed as a charlatan.”

Bower could not be reached and his agent did not return calls. Edward Greenspan, one of Black’s defence lawyers, declined to talk about the possibility that the suit and others could be restarted until Black was out of custody. However, Greenspan told a Toronto newspaper last year that Black was counting on the proceeds of such suits to help pay for his ballooning legal bills.

It is not clear whether the U.S. appeal court’s decision to grant bail means it is likely to deliver a favourable outcome for Black. But many experts think the fraud charges, at least, will be overturned in light of the Supreme Court’s decision to narrow the definition of “honest services” fraud used to convict Black. “Everything is going to hinge on this remaining count of obstruction of justice,” says Bennett Gershman, a professor at Pace Law School. “Would the jury have found him guilty of obstruction of justice if they didn’t have the honest-services counts also to consider? It may be that you can’t separate them.” He says that even if Black is unable to overturn the obstruction charge, he is unlikely to go back to jail having served more than two years already. “The government doesn’t have a strong hand here anymore. Black is in the driver’s seat now.”

As for his enemies: look out.

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