Richard Perle being investigated undisclosed bonuses

London Times
February 19, 2004
New inquiry examines Hollinger bonus plan
From Abigail Rayner in New York

RICHARD PERLE, the former US Assistant Defence Secretary and Hollinger International board member, is under investigation for allegedly failing to disclose bonuses worth about $3 million (£1.6 million) which he received for running an investment scheme, The Times has learnt.

Mr Perle, a vocal supporter of President Bush, was awarded the money as a reward for investing Hollinger shareholder funds in a series of separate businesses. Mr Perle also held a stake in some of those businesses. While the scheme put Hollinger International shareholders' money at risk, it was never disclosed to them.

Richard Breedon, who heads a Hollinger committee that is already investigating other undisclosed payments to group executives, is said to be now looking at circumstances surrounding Mr Perle's apparent undisclosed bonus.

Mr Perle was one of five Hollinger International directors who participated in the bonus scheme.

However, while Lord Black of Crossharbour, the publisher's founder; David Radler, deputy chairman and chief executive of Hollinger International; Dan Colson, chief operating officer of Hollinger International; and Peter Atkinson, Hollinger vice-president, all divulged their awards to shareholders, it appears that Mr Perle has so far failed to do so.

Failure to disclose such awards represents an apparent contravention of the US Securities and Exchange Commission's rules. Mr Perle, in common with any director of a public company, is required each year to disclose earnings above $60,000.

Although Mr Perle appears to have received the biggest bonuses through the scheme between 2000 and 2001, his takings were never disclosed in the company's proxy letters to shareholders.

Mr Perle is said to have helped to set up a bonus scheme where 22 per cent of all gains on investments made by Hollinger International went into a central pot that paid bonuses to himself, Lord Black and other company executives.

Shareholder money was funnelled through a company called Hollinger Digital Inc, where Mr Perle was co-chairman. The group was a unit of Hollinger International and was set up in 1996.

The existence of the bonus scheme, which is understood to be documented and has been confirmed by Hollinger insiders, has not been denied by Mr Perle.

When asked about the incentive scheme this week Mr Perle denied that he had received $5 million from the scheme but refused to deny that he had received $3 million, despite being given several opportunities to do so.

Hollinger International invested $2.5 million in Trireme Partners, a venture capital fund in which Mr Perle was a managing partner; $14 million in Cambridge Display Technology, a British-based technology group; and a further $3 million in Onset, where he serves on the board of directors. There were several other investments.

CASE HISTORY

Fresh allegations involving non-disclosure payments at Hollinger International come as lawyers representing Lord Black of Crossharbour continue their fight today to win the right to sell the media baron's controlling stake in Hollinger International, publisher of The Daily Telegraph, and The Sunday Telegraph, to the Barclay brothers.