'Intelligent discontent is the mainspring of civilization.' -- Eugene V. Debs

Thursday, September 16, 2004

The Prince of Darkness vs. Lord Black 

A couple of weeks ago, Richard Breeden, former head of the SEC, published a scathing five-hundred-plus page report called The Hollinger Chronicles detailing, to quote the report, the "corporate kleptocracy" headed by Hollinger International’s ex-CEO and major shareholder, Lord Conrad Black. The report alleges that Black populated Hollinger's board with shills and lackeys who looked the other way as Black and friends plundered the company for $400 million.

Of particular interest to readers of this blog is the fact that Prince of Darkness and president of the Ahmed Chalabi fanclub, Richard Perle, was one of Black's shills. As Martin Kelly wrote in the Washington Dispatch:

Breeden blasts Perle for the lack of care he exhibited towards the interests of the wider shareholder democracy forming Hollinger International. Perle was not just a main board director; he was a member of the corporation’s executive committee. He should have been scrutinising the web of interlocking companies, the non-compete fees, the management fees and the asset sales and purchases that seem to have enabled Black and Radler get their hands on so much for so long. Either Perle wasn’t doing his job properly or he was looking the other way. Breeden proposes that the ultimate penalty be imposed on Perle for his consistent failure to perform. Black’s biographer Richard Siklos, writing in Hollinger’s former title The Sunday Telegraph of September 5, quotes Breeden thus --

"As a faithless fiduciary, Perle should be required to disgorge all compensation he received from the company".

Over the course of his involvement with the company, Perle was paid a total of 5 million dollars. If Perle is called upon to repay this sum, it will be very interesting to see who is backing him up.

I don't know about you, dear reader, but the above left me with an awful image of Richard Perle "disgorging".

The report alleges that Perle made a killing similarly to the way in which Black did, by syphoning Hollinger International's assets into personal ventures. Amusingly, Perle dipping his hand into the cookie jar annoyed Black because, you know, Black wasn't in on it: (from the Globe and Mail)

The Hollinger Digital investments show how Richard Perle, a long-time Hollinger International director and a friend of Lord Black's, was allowed to personally profit from his role at the company, the report alleges. Even Lord Black raised concerns about Mr. Perle's alleged attempts to divert Hollinger money to his own enterprise, according to the report. In an e-mail included in the report, Lord Black referred to Mr. Perle and another associate as trying to "smoke one past us" and added that they "should treat us as insiders with our hands cupped as the money flows down, and not as outsiders pouring in the money."

I really like that bit about treating Black's group as "insiders with [their] hands cupped as the money flows down" rather than the money pourers -- these guys really have to learn to stop using email to manage their kleptocracies. One hopes Black and his boys withdraw their cupped hands before Richard Perle disgorges -- or maybe not.

Interestingly, rather than demonstrating the crazy loyalty we're used to seeing from Perle towards Chalabi, Perle is already turning on Black: (from the Times)

Now, their relationship, which has come under scrutiny by federal regulators and investors, has decidedly changed.

In the face of federal investigations and a scathing internal report for Hollinger by Richard C. Breeden, a former chairman of the Securities and Exchange Commission, Mr. Perle has broken ranks and turned on Lord Black.

[ ... ]

From his vacation home in southern France late Friday, issuing the outlines of his legal defense for the first time, Mr. Perle said that he was misled.

"The special committee has concluded that Lord Black and other members of the Ravelston Management Group misled the directors of Hollinger, including me, concerning the scope of their compensation, the payment of noncompete payments and the related-party nature of several transactions," Mr. Perle said, referring to the holding company run by Lord Black that effectively controlled Hollinger. "As the report shows, critical information was either not revealed or obscured as matters were presented to the audit and executive committees and the full board of directors.

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