Conrad and Lady Black: Dancing on the Edge. Tom Bower
the government for refusing to offer adequate help, he simply gave Argus’s shares in Massey-Ferguson to the employees’ pension companies and announced that he was walking away. Such acts would be characteristic of a career notable for dramatic entries and exits. Just before leaving the chairman’s office, Black removed from the wall a painting showing a gun carriage moving through a battle-scarred street in Arras, France, past a Massey dealer in 1918. Conrad Black appreciated trophies.
Canada was shocked by Black’s conduct. He was no longer a whizz kid but another Bay Street cowboy abandoning his responsibilities to thousands of families and the nation. In the media, Parliament and even among members of the Toronto Club, he was criticised as a profiteer without a social conscience, exploiting legal loopholes and manipulating companies’ assets for his personal profit. ‘I gave them no comfort at all,’ was all Black would say in his contradictory accounts of his negotiations with the government about the future of Massey-Ferguson.6 Arousing suspicions did not trouble Black, but he was intolerant of the consequences. In the Toronto Sun, Peter Worthington, the editor, accused ‘Conrad Tricky’ for incurring Massey-Ferguson’s horrendous debts. The criticism stung Black. His vilifiers deserved punishment for not recognising his glory. The Toronto Sun received a writ for defamation – the first of dozens which he would issue over the next twenty-five years – and a carefully crafted letter written in his unique style: ‘For the record (not that the Sun is a newspaper of record to anyone who does not suffer from severe lip-strain after half a minute of silent reading), the Sun’s theory that we should mortgage all the assets … to bail Massey out of a mess that none of us had any hand in creating, is too asinine to merit further reply’.
Reading his published letter in the Toronto Sun and contemplating the legal battle pleased Black. He had uttered, he imagined, the last word on the subject, and his critics were forever silenced. He could not imagine that his would-be peers – the Bronfmans, Westons and Thomsons – were embarrassed by his retreat at the expense of his employees and his refusal to rebuild the business. Observers noted that Victor Rice, Black’s successor at Massey, was fighting to save the company: he would succeed in increasing the share price from $1 in 1980 to $78 in 1999. They carefully considered Rice’s judgement of Black – ‘His perception of what he was doing and reality were two different things’ – and concluded that Black was ‘a flash-in-the-pan’.7 Conrad Black resented any disparagement. Others, he believed, were always to blame for his misfortunes. Spoilt as a child, he protected himself by accusing his critics of jealousy. ‘All those pent-up forces of envy and disbelief,’ he sneered, ‘finally showed their true colours.’8 To bolster his sense of his own infallibility and innocence he damned his critics for resenting his ‘unbroken string of successes’. Verbal flourishes, he believed, would cover his escape. ‘The only charge that anyone can level against us,’ he would say, ‘is one of insufficient generosity to ourselves.’9 Attracting envy to himself, he reasoned, confirmed his success.
Conrad Black was thirty-six-years old. His morality was as rigidly fixed as his ambition. He wanted wealth and influence. Preoccupied with manipulating his debts, his developing plan appeared to critics to transfer Argus’s real wealth from the public shareholders into Ravelston, the private company which he controlled. In his self-proclaimed ‘campaign of manoeuvre’ he initiated a bewildering succession of loans, dividends and special payments, shifting the ownership of companies and debts between Argus and Ravelston. In the process, Ravelston got richer while the price of Argus shares fell.10 ‘This policy,’ he would boast, ‘led over that time to what was probably the greatest compression of corporate dealing in Canadian history.’11 Outsiders, confused and suspicious, sold their Argus shares. As the price of the shares fell, Black used the cash which Argus earned from selling its assets to finance his own purchase of the company’s shares, so increasing his personal stake in the company.12 Pushing up prices and selling at the peak, the Bay Street cowboys were infamous for ‘pumping and dumping’ shares. Black did the opposite. As one of his managers quipped, ‘Conrad went to the dentist and ordered him to drill. When the dentist said that he could see no cavities, Conrad told him, “Drill anyway. I feel lucky today …”.’13 Peter Newman, Black’s first biographer, credited him with ‘taking rabbits out of apparently empty hats’.14 Others saw a magician waving an empty hat, treating employees as ‘toy soldiers’ and, for his own self-enrichment, ignoring the interests of minority shareholders. ‘We originally created wealth out of thin air,’ he boasted, ‘but in a way that was perfectly licit.’15 Legality had assumed special meaning for Black. The repercussions were immediate.
The public debate about his conduct fed Black’s ambition to buy more newspapers and to become a broker of influence. His targets were publications whose owners, he asserted, were alcoholics and incompetents who had either succumbed to damaging strikes or had failed to fund the necessary investment in new plants and buildings. Included in his wish-list for purchase were Toronto’s Globe and Mail, the Ottawa Journal, and the Montreal Star. Repeatedly, the vendors rejected his offers and preferred to deal with Roy Thomson.16 Frustrated and needing money, Black lurched in the opposite direction and agreed to sell Sterling Newspapers for $14 million. But after scrutinising the figures, the prospective purchaser withdrew, pronouncing his dissatisfaction with the accounts.17 Black’s consolation was a conference organised by the Economist Intelligence Unit in Toronto. ‘Massey-Ferguson’s former chairman has agreed to sponsor the conference,’ Andrew Knight, the Economist’s editor, told Peter Jay, the recently-retired British ambassador to Washington. ‘Can you arrange for Henry Kissinger to make a keynote speech?’ Jay succeeded, and was talking to Kissinger in the conference hall’s ante-room before his appearance. Black seized his chance. As Jay began to escort Kissinger onto the platform, he was powerfully pushed from behind. Reeling to the side, he noticed Conrad Black striding up to Kissinger. ‘This way,’ smiled Black, engineering his introduction to a relationship which would bless his career. Before he returned to Washington, Kissinger had been seduced by Black’s profound knowledge and charm. Making use of this new relationship depended upon Black increasing his wealth.
With the option of buying more newspapers closed to him, Black identified mining as a certain profit-maker, and resolved to expand Argus’s investments in that field. Argus owned Labrador, an iron-ore extractor. For tax reasons, Labrador could benefit by involvement in oil exploration. After careful research, Black targeted Norcen Energy Resources, an undervalued oil and gas explorer. In December 1979 he had bought 10 per cent of the company’s shares from an investment group. The following day he telephoned Ed Bovey, the company’s chairman, to discuss his investment. Black would insist that, with Bovey’s agreement, he raised his stake to 40 per cent by February 1980.18 The investment was financed by bank loans, but essentially, in a complicated, tax-efficient procedure, Black used Norcen’s own money to finance his purchase. Next, using Norcen as his vehicle, he searched for another mining company in the United States. His motives were partly financial, but they were also social. Ever since he had visited London in 1953 and Palm Beach in the 1960s, and had left Montreal in disgust with Quebec’s separatist politics, Black had been dissatisfied with Canada. The country, in his opinion, was a narrow-minded backwater, and its politics were boring. America, by contrast, was exciting. For a social adventurer, Palm Beach was a natural stage on which to launch his presence in America.
In 1980 Conrad Black took his first step towards joining America’s rich set. He bought an unimposing colonial house at 150 Canterbury Lane, on the north end of Palm Beach island. The comfortable 8,700-square-foot