It's all relative.
Citizen Conrad's Friends
December 23, 2003
By PAUL KRUGMAN
Yesterday's eye-opening New York Times story about the
inner circle of Conrad Black, the troubled chairman of
Hollinger International, described him as a "throwback
press baron." Indeed, his style recalls that of William
Randolph Hearst. But it's a mistake to think of Lord Black,
whatever his personal fate, as a throwback to a bygone era.
He probably represents the wave of the future.
These days, everything old is new again. Income is once
again concentrated in the hands of a tiny elite, and money
rules politics to an extent not seen since the Gilded Age.
The Iraq war bears an eerie resemblance to the
Spanish-American war. (There was never any evidence linking
Spain to the Maine's demise.) And Citizen Kane is back, in
the form of an incestuous media-political complex.
Conrad Black's empire includes The Daily Telegraph in
London, The Jerusalem Post and The Chicago Sun-Times. He
switched from Canadian to British citizenship - an action
that forced him to give up control of Canada's National
Post - when the Canadian government prevented him from
becoming a member of the House of Lords.
Now he's a lord in trouble. Hollinger, it turns out, has
paid hundreds of millions in fees to companies controlled
by Lord Black and to individual executives. Some of these
payments were secret and were unauthorized by the board.
Even if viewed purely as a corporate scandal, this is
pretty major stuff.
But the Black affair isn't just about bad corporate
governance. It goes without saying that Lord Black, like
Rupert Murdoch, has used his media empire to promote a
conservative political agenda. The Telegraph, in
particular, has a habit of "finding" documents of unproven
authenticity that just happen to support neoconservative
rationales for war. We're now learning that Lord Black also
used his control of Hollinger to reward friends, including
journalists, who share his political views.
Inevitably the list includes both Henry Kissinger and
Richard Perle, whom I hereby propose (stealing an idea from
Slate's Tim Noah) as the subject of a parlor game about
cronyism, along the lines of "Six Degrees of Kevin Bacon."
The former Pentagon official, who has close ties to Donald
Rumsfeld, has enthusiastically embraced the advantages of
being both a businessman and a policy insider. His
prestigious if part-time official position on the Defense
Policy Board provides him with credibility, and at least
the suggestion of both inside information and policy
influence. This has led to lucrative consulting deals, and
has attracted investments in his venture capital fund,
Last August, in a moment of supreme synergy, Mr. Perle,
wearing his defense-insider hat, co-wrote a Wall Street
Journal op-ed praising the Pentagon's controversial Boeing
tanker deal. He didn't disclose Boeing's $2.5 million
investment in Trireme.
Sure enough, Hollinger also invested $2.5 million in
Trireme, which is advised by Lord Black. In addition, Mr.
Perle was paid more than $300,000 a year and received $2
million in bonuses as head of a Hollinger subsidiary. It's
good to have friends.
The real surprise, though, is that two prominent
journalists, William Buckley and George Will, were also
regular paid advisors to Hollinger. Now, I thought there
were rules here. First, if you're a full-time journalist,
you shouldn't be in that kind of relationship. Second,
whoever you are, if you write a favorable article about
someone with whom you have a personal or financial
connection - like Mr. Perle's piece on the tanker deal or
Mr. Will's March column praising Lord Black's wisdom - you
disclose that connection. But I guess the old rules no
That, surely, is the moral of this story. Lord Black may
have destroyed himself by being a bit too brazen. But his
more powerful rival Rupert Murdoch just goes from strength
to strength, even though top positions in his media empire
have a tendency to go to his sons, and the News Corporation
has done far more than Hollinger to blur the line between
news and propaganda. And the empire keeps growing: last
week the Federal Communications Commission approved Mr.
Murdoch's acquisition of a controlling interest in DirecTV,
whose satellite television serves 11 million U.S. homes.
In other words, Lord Black may be about to fall, but the
nexus among news coverage, political influence and personal
gain seems likely to grow even stronger.