'Everything belonged to the Blacks' at Hollinger: report

WASHINGTON (AFP) - A dinner party for Conrad Black's wife at La Grenouille in New York: 42,870 dollars. "Summer drinks": 24,950 dollars. Opera tickets: 2,785 dollars. Refurbishing Black's Rolls Royce: 90,000 dollars.

Most of these expenses were charged to Hollinger credit cards as part of a rampant abuse of corporate perks by Black and his associates, according to a report prepared for a US court and regulators and made public Tuesday.

"Black's expense practices evidence his attitude that there was no need to distinguish between what belonged to the company and what belonged to the Blacks," said the report prepared by a committee headed by Richard Breeden, a former SEC chairman.

"In Hollinger's world, everything belonged to the Blacks."

The report said Black gave his wife, journalist Barbara Amiel Black, "a 'no show' corporate post that paid her over 1.1 million dollars but did not require her to do anything," the report noted.

Hollinger was also charged for food, cell phones, perfume, and other routine living expenses, including tips by Amiel Black while on shopping trips.

Some expenses were listed as "handbags for Mrs. BB (2,463 dollars), jogging attire for Mrs. BB (140 dollars), exercise equipment (2,083 dollars), T. Anthony Ltd. Leather Briefcase (2,057 dollars).

The dinner party for Black's wife included 80 guests at 212 dollars a plate, including Beluga caviar, lobster ceviche, and 69 bottles of wine.

In an ironic note, the Breeden report pointed out that "at least Black's choice of venue for his wife's birthday was less expensive than Dennis Kozlowski's party for his wife on Sardinia" a reference to a one million dollar party thrown by the former Tyco chief executive who is accusing of looting that company.

More significantly, the report noted that the Blacks obtained a New York apartment from Hollinger's for 2.5 million dollars below its value due to "rigged appreciation" in a swap arranged with the company.

The report also noted various schemes to help Black and his allies avoid taxes in the US and Canada by creating offshore shell companies associated with his personal company Ravelston.

"Not satisfied with receiving 20 to 40 million dollars a year in excessive management fees, Black and the Ravelston insiders then directed significant portions of those fees to Moffat Management and Black-Amiel Management, which were empty shell companies registered in Barbados," the report said.

"Even though these entities did nothing to earn fees, and did not have either employees or real operations, paying management fees to them on the pretense that they performed services allowed the recipients the prospect of transforming a portion of the enormous management fees that would otherwise most likely have been taxable in Canada (where the payments were received), or possibly the US (where services were largely performed), into dividends received in Barbados (where nothing occurred).