By Beryl Wajsman, Institute for Public Affairs of Montreal
Sunday, July 15, 2007�L'audace, encore l'audace et toujours l'audace~ Georges Danton
�"If you're going to take liberties and break the law with other people's money, there are going to be consequences." That, U.S. federal prosecutor Patrick Fitzgerald told reporters yesterday, was the message of the verdict in the Conrad Black trial. Those twenty words of Fitzgerald's are a lie. His words stand as yet another manifestation of the mania and manipulation with which the prosecution prejudiced the judicial wells in this persecution.
We got an earlier taste of it when the jury came back hung – a clear statement that the government had not proven its case beyond a reasonable doubt – yet Judge Amy St. Eve instructed it to go back into deliberations and "…not be afraid to change your opinions while staying true to your firmly held principles…" That was an oxymoronic instruction and one that sent a blatantly biased signal. Find the defendants guilty of something!
Amidst the cacophony of smug, sanctimonious condemnation of Black in the media that followed in such ungracious haste the announcement of the jury's decision, one matter was overlooked. He wasn't found guilty of any actual crimes! But critical thought has long since been replaced by a rush to demonization in our public discourse. We salivate over the prospect of labeling someone – anyone - an enemy of the people much as earlier cultures eagerly anticipated human sacrifices to the gods. Earlier cultures used flaming pyres. We use courts and commissions. We think of ourselves as cleansed, cloaked in the swagger of the false piety of self-righteous hypocrisy. ��
What "laws" was Conrad Black convicted of breaking? None! At least none that related to the central matters in the Hollinger dispute and the central charges in the government's case. Surprised? Don't be. The American criminal justice system is a strange hybrid of competing federal and state jurisdictions. Unlike Canada, where criminal law is governed by a federal statute called the Criminal Code applicable through all provinces, most crimes in the United States are governed by state statutes. For the federal government to intervene and prosecute in a criminal matter – as it did in this case – requires a violation of some federal law. And Washington has for over a century constructed convoluted legal bridgeheads into areas where it had no previous jurisdiction. One of these constructs was mail fraud.
Conrad Black was indicted on some 13 counts of fraud, racketeering, tax evasion and obstruction of justice. He was acquitted on nine. Those nine all related to the heart of the SEC complaint originally brought by investment banker Christopher Browne and that formed the basis of Fitzgerald's case. They included the receipt of monies from the famous non-compete agreements that the prosecution alleged should have gone to the company and not to Black and his co-defendants personally (including the big $50.1 million from CanWest); the use of company funds and jets for "private" purposes; alleged failure to file tax returns. Black was found innocent of all these charges.
Innocent of criminal fraud. Innocent of tax evasion. Innocent of racketeering. Indeed the amount Black is now liable for forfeiture is some $2 million which relate to two mail fraud convictions on two of the small non-competes on which there was no main fraud conviction. A far cry from the $90 million the prosecution had set up at the beginning of the trial. And some one-tenth of the cost of this case to the taxpaying public.
What he was found guilty of - after the judge's instruction to the jury to resume deliberations – were three counts of mail fraud and one count of obstruction of justice. Let's examine the latter first.
The obstruction of justice charge related to Black's removal of boxes of documents from his Toronto office that we all saw on that security camera film. Three ironies in this charge. The first is that by the prosecution's own admission it had all the documents in those boxes so how was justice obstructed? The second is that this event occurred in Toronto which is hardly in the jurisdiction of Cook County, Illinois, so how did it form part of an American bill of indictment? The third is that Conrad Black knew the locations of cameras in his own offices yet the tapes showed that he was not concerned nor did he try to dismantle them. Black's intelligence is something that friend and foe agree on. If he was taking out documents that would have obstructed justice would he have not at least had the cameras closed before he went in?
But it is the three convictions of mail fraud that are the laughable part of this verdict. Laughable if the "consequences" - to use Fitzgerald's word again – were not so draconian. Mail fraud is one of the federal legal constructs mentioned above that gives Washington jurisdiction in certain criminal cases. It was originally devised in the 1920's and revised in the 1930's as a means of implementing more effective racketeering prosecutions through federal indictments and federal prosecutors because state prosecutors were having a difficult time convicting many of violations of state law.
Mail fraud refers to any scheme in which the United States Postal System is used at any point in the commission of a criminal offence. It is used to provide an increased penalty to any main charge of criminal fraud – and allow for the intervention of federal prosecutors since Washington runs the postal service - particularly in those cases where the criminal act would have been only a violation of a state law. Today mail fraud is routinely thrown into almost every white-collar criminal prosecution because it brings in the big stick of the feds. Mail fraud covers everything from non-delivery or misrepresentation of mail-order merchandise to promotional cheques to work-at-home offers. Pretty mundane stuff right? What could it possibly have to do with Conrad Black? If your answer is nothing you're right!
The three counts of mail fraud that Black was found guilty of related to the expedition by mail of contracts and cheques related to non-compete payments that the prosecution had alleged were fraudulently obtained. They alleged it but there was no conviction on a main charge of fraud. In other words, Black was not convicted of any main fraud count on the very charges he was found guilty of in the mail fraud! How could it be illegal to use the U.S. Postal Service to send contracts and cheques resulting from legal transactions? That is something for the appeals court to decide. But one thing is clear from this jury. Black took no "liberties" with "other people's money" – to use Fitzgerald's words again – and could have broken no laws on mail fraud since the jury assigned no culpability on any main fraud charge nor on the racketeering charge.
Mail fraud is not the only example of the distortion of federal statutes in the United States. Perhaps the most notorious law – and one also used to attack prominent figures that were the objects of envy, hate or simple controversy – was the White-Slave Traffic Act of 1910. It is better known as the Mann Act, after James Robert Mann the Illinois – yes, Illinois again – congressman who authored it. The Act banned the interstate transport of females for "immoral purposes".
Interestingly enough the first person prosecuted under the act was Jack Johnson, the first black man to hold the world heavyweight boxing title. It was 1920 and Johnson was still hated by white racists in many parts of the United States for having held the crown from 1908-1915. There was political mileage to be gained for ambitious prosecutors in getting Johnson, a man who two Southern ministers suggested be lynched after he won the title. Johnson was also a flamboyant man who enjoyed the good life both in the U.S. and abroad. Johnson encouraged a woman, whom he later married, to leave a brothel and a life of prostitution and travel with him to another state. �Despite his obvious noble intentions the feds orchestrated a political prosecution and Johnson spent a year in prison.
The great architect Frank Lloyd Wright and his future wife Olga Hinzenburg were arrested for violating the act in 1926 even though they had a child together in 1925. The only reason they hadn't married was that Wright was waiting the required one-year state limit for his divorce from his first wife to become final. So while respecting a state statute, they had allegedly violated a federal one. The charges were later dropped. Canadian author Elizabeth Smart was arrested under the act in 1940 for crossing a state border with her lover British poet George Barker. Charlie Chaplin was prosecuted in 1944 on charges related to his involvement with actress Joan Barry. Chaplin was acquitted, but the trial permanently damaged his public image in the US and he left America for Europe in the early 1950s.
In an eerily reminiscent parallel to the mail fraud statutes – and the problems with hybrid legal jurisdictions - the United States Supreme Court upheld the Mann Act in the Hoke ruling of 1913 stating that though Congress could not regulate prostitution , as that was strictly the province of the states, it could regulate interstate travel for purposes of prostitution or "immorality". The precedents were interstate commerce regulations which fell under federal purview.
Were it not for Conrad Black's notoriety and the political mileage to be gained from his prosecution, this case – which at its base is a commercial dispute – would never have come to criminal trial. Hollinger is not Enron or WorldCom where executives created fictitious wealth and got tens of thousands of their own workers to buy stock which later evaporated destroying lives and wiping out pensions. Conrad Black created wealth. It is estimated that Christopher Browne's own investment banking firm of Tweedy, Browne profited by $400 million from the work of Conrad Black. Browne simply wanted control and saw the $65 million in non-compete payments – that had been vetted by two law firms in New York and Toronto, Hollinger's own audit committee and done with complete transparency – as a convenient retroactive weapon with which to get it.
No, this persecution was fuelled by naked greed – political as much as financial. Pat Fitzgerald, who will probably go on to be governor, quickly shed his Eliot Ness – "I'm not turning this into a media circus" -� fa�ade and took to the staged press briefings like a fish to water, complete with his young assistants standing behind him like centurion guards. He saw the political profit.
Conrad Black wasn't brought to trial for anything he did wrong. He was tried precisely for what he does right. In a time of mediocrity he strives for excellence. In a time of conformity he acts audaciously. In a time of intellectual sloth he demonstrates intellectual rigour. In a time peopled by the feckless and the fey he lives with the bold and brave. In a time of a race to the bottom of the lowest common denominator he reaches for the top. In a time of gray, Black stands out.
It takes courage to live such a life. And as Robert Kennedy said, "Courage is the cardinal human virtue." Is Black arrogant and egotistical? Maybe, so what. Kennedy was accused of being ruthless. It takes many kinds of leaders to move a world forward. And arrogance and ego are needed to lead. One thing's for sure. Conrad Black is not like the French revolutionary leader who interrupted his dinner party because he said he heard a mob outside and said he needs to see in which direction its heading because he is their leader. Black will overcome this latest test and lead at the head of the pack loyal to the words of another French revolutionary leader, Georges Danton, who said, "L'audace, encore l'audace et toujours l'audace".
You may not like Conrad Black for a dozen different reasons. It doesn't matter. His life and this trial are important to each and every one of us. For when the strongest among us cannot get justice then the weakest will be at the mercy of the same corrupted power. Law without Lord Acton's "equity of just consideration" can be many things and used for many purposes but it can never be justice. And without just consideration, law becomes nothing more than a two-edged sword of craft and oppression instead of a staff for the just and a shield for the innocent.
Oh, and as for Pat Fitzgerald, I'd recommend he read the words of a truly great man of the law, former Supreme Court Justice William O. Douglas who once wrote, "In a civilized society the means are all important. In the sweep of history a nation that accepts indiscriminate practices as normal has no claim to a position of moral leadership among the nations."